MetLife, the largest life insurer in the US, has operations in 11 Asian markets, offering life, accident and health insurance, retirement and savings products. The firm’s product development in Hong Kong is headed by Hamilton Yuen. He rejoined MetLife in 2014, having started at the insurer in 2000 as an actuary based in New York.
AsianInvestor: Can you outline your team and the role they play in fund selection?
Hamilton Yuen: I have 10 people in product development and we are responsible for all the product development and pricing, including investment-linked assurance scheme (Ilas) products in Hong Kong. Fund approval is performed by a centralised team in the US.
Locally we run quant analysis on funds we would like to onboard, looking at Sharpe ratio and other metrics. Our CIO interviews fund managers. Once quant analysis and interviews with managers are completed, we propose the funds and make a case to our US office.
We have approximately 70 funds on our Ilas platform. We want to maximise fund selection and prefer to work with a smaller number of fund firms, so fund flows stay with a few firms for relationship management.
We do listen to our distributors, but we won’t onboard funds just because they are selling like hotcakes. Distributors will tell you what fund is hot, but we also need to make sure the fund is sustainable. We need to balance the two.
How often do you review your fund platform?
We have just reviewed it. We want a more streamlined platform with two to three fund choices in each category.
One thing to bear in mind is that as an insurer we do not make fund recommendations. We want to make sure that the choices are there, but at the same time that clients are not overwhelmed with too many choices.
How long does an unfavourable fund stay on your shelf?
We review performance regularly as our US office provides us with performance and other relevant fund data. But if the structure of the platform and the line-up of funds are carefully developed, you won’t be revamping funds too often.
But there are some situations where we may consider removing a fund, such as closure of a fund or consistently poor performance. Latin American markets currently are not favoured, but we have kept the fund available despite this so that clients have a choice when the tide turns.
How many Ilas products do you have in Asia?
We have two and are developing a third. We have a regular savings product for the mass market and a single-premium product for more affluent clients. Both share almost the same funds platform.
Our third product will allow clients to invest, accumulate and enjoy liquidity, i.e. they can redeem the fund investment without back-end load, upon meeting certain medical conditions.
Are most Ilas platforms similar at insurers?
Most insurers will have the usual suspects, but there are some variations. For example, under the same major asset class different companies may pick different sub-classes, such as growth, value etcetera. At the end of the day we should provide fund choices and differentiate ourselves based on service and features of the insurance element of Ilas.