In conversation with
Tom Thomson

FDI Spotlight: For the benefit of the readers of Newsweek, what would you identify to be the DNA of Pacific Cross?

Mr. Tom T.: We started our business here in Thailand in the 1980’s as Blue Cross Insurance. In 1996 we sold our business to Bupa Insurance to exit the market and entered again in 2001 with a joint venture called NamSing. We friendly parted our ways as NamSing’s focus was more on asset and property insurance and we strongly identify with health insurance. Then followed a joint venture called LMG Pacific, which ended in December last year. This gave us time to determine our approach in setting up business activities here independently. Valuable time as our head quarters is in Hong Kong. We are also present in the Philippines, Cambodia, Vietnam and Indonesia. We were finally able to obtain a single health insurance license, which brought us back to the core of our original activities when we started in Hong Kong as Blue Cross, where today it still operates under this name.

Changing your name to pacific cross really shows further opportunities and potential of this region as an integrated whole. You have been present in this region for a number of years. How do you see the lay of the land, comparing Thailand’s insurance in terms of market development and the level of intellectual products in comparison of the rest of the region?

Mr. Tom T.: I would describe Thailand as an immature insurance market as many companies in this market are still learning. We’ve been involved in health insurance exclusively, since 1970’s. Therefore we as a company are quite confident in the products that we involve ourselves with. We don’t get into other lines of business, as the health insurance is our speciality. We have progressively developed our plans to suit the markets that we see here. Comparing the Indonesian, Philippine and Thailand markets, they are all quite similar. The Hong Kong market is more mature, because these products have been around there for some time now. Here in Thailand, Some of the areas stimulating the health insurance sales relate back to the hospital network. They could see an opportunity; Dr. Dusit/Prasit (?) who set up the Bangkok chain was forward thinking and saw an opportunity for Thailand, a nation nestled in the heart of the CLMV region, providing good services and other hospitals jumped on the bandwagon seeing similar opportunities, spinning off into the Thai health insurance market. The Thai health insurance market is estimated to attract approximately 15% of the population that can actually afford it.

Unfortunately or fortunately, a lot of health insurance is sold by life companies. They sell a life insurance policy with a health insurance rider (?) and sell it as a life insurance. We differentiate ourselves by providing guaranteed renewable health/ medical insurance for a lifetime.

One of the key things that I’ve been speaking to Dr. Pichet (former governor of Bangkok), who runs Navamindrad University, a medical training college university, as well as Mike Plaxton from FWD is that there’s been a shift towards TH people popularising certain conditions and that being the health scare of the time covering themselves for one specific condition or disease. Do you cater to this market as well?

Mr. Tom T.: No we do not cover specific critical or trauma type of plans. We have seen some targeting from hospital advertising to stimulate the people to get such a cover, however we choose to offer a complete package creating awareness with our clients by showing the necessity of an overall cover, as no one knows exactly what type of disease or trauma one might be confronted with.

What are some developments or trends that you perceive in the health insurance market here in Thailand?

Mr. Tom T.: The growth of the Thai health insurance market is very promising. The size of the health insurance market here is estimated to have the size of the motor vehicle insurance market in ten to twelve years, which currently counts for 84% to 85% og the premiums sold in the non-life insurance area.

As the middle class is increasing, we can really see people are starting to see the necessity of health insurance. Currently people are more interested in insuring their children rather themselves in order to care for their family. People are also acknowledging the downside of not having insurance whether it will be health or life insurance, which is to have to sell their valuable assets to cover the costs.

Going on to a more broader investment climate perspective, with the birth of the ASEAN Economic Community, do you see Thailand as the preferential investment destination for a business man or woman to set up here?

Mr. Tom T.: I see Thailand as a perfect hub for investors to come to. Of course there are some challenges. We sadly lack linguistic skills; particularly foreigners here have to use English to communicate. Experience has shown that when you start peeling away the layers, down at the bottom, there is a very poor command of English. Training is essential, but certainly not impossible as people are eager to learn. A challenge might also be the long commute employees have between the office and their homes. Looking at land ownership laws particularly, I somewhat doubt that these are convenient. Though I understand the reasons for these laws to be in place, it would help to have 50 to 100 year leases for long-term fruitful investment. This would certainly stimulate the foreign direct investment climate here in Thailand. With the central location, easy access of the country and great infrastructure to build upon however, I see Thailand as a true connectivity hub with great potential to invest and opportunities for moving into the neighbouring countries from here.

You positively stated Thailand to be the hub of the region but realistically so mentioned the challenges in logistics and finding skilled human capital. How have you overcome these challenges yourself?

Mr. Tom T.: We overcome logistic issues by creating flexible starting hours at the office. As long as they are making their hours, our employees can start 30 minutes later. But I believe the human capital and knowledge based insurance industry is to blame on the past leaders in the insurance industry showing reluctance to share ideas in fear of the competition. I believe sharing knowledge builds a stronger business and a stronger business builds loyalty with employees as well. Of course there are other ways to build loyalty, but sharing knowledge is essential. We as individuals will not be around forever and we all have to share in building this business to be sustainable one in the future. We are looking for people who are committed to that future. I am happy to say that we are lucky to have had ten-year and five-year rewards handed out to 23 of our employees earlier this year.

In order to be a successful businessman in this region, a true understanding of the people here is needed. What would your advice be to the international investment community on the values and cultural practices that they should take into consideration in order to set up a sustainable and successful business here in Thailand?

Mr. Tom T.: I thoroughly enjoy living in Thailand after several years in other parts of Asia. It is considerably different, the way of doing business here. My advice is to listen to your people and be prepared to share your ideas. Accept their feedback on your ideas as to how a particular approach should be made as it allows you to perhaps rethink your approach in going forward. Cultural differences are obvious, but we have to remember that we’re dealing with people. No matter where they come from, everyone has their own needs, desires and deman ds. It’s a matter of just understanding of what they all are. We come from countries with welfare systems and here there is no such thing. It is the fast and the furious that seem to get through.