Kiwi making his mark

Mark Wilson believes we have not yet got our superannuation policy right. Photo / Supplied

Like most executives at the peak of their powers, Mark Wilson oozes passion for his industry from every pore.

"It's complex, it's dynamic, it's exciting, it's sophisticated, and it's really intellectually stimulating," he gushes from what I can only assume is his swanky office in one of Hong Kong's landmark buildings.

I'm in Auckland at the end of a copper phone line, so I can't see his face, but I'm pretty sure his eyes are sparkling as he speaks. His speech, which bears only faint traces of his Kiwi roots, has noticeably quickened and it's clear he is relishing the chance to explain his enthusiasm for his chosen career - in insurance.

"Most people think insurance," he acknowledges with a markedly different inflection. "But it's a really interesting industry."

I don't think he is protesting too much. You could in fact argue that insurance has been a little too interesting lately - and Wilson would be tempted to agree.

He is, after all, the head of American International Assurance Company (AIA Group), which is the Asian arm of infamous American insurance giant AIG - the company some blame for plunging the entire world into an epic financial crisis.

Wilson took over as president and chief executive of AIA earlier this year, following the retirement of 71-year-old Edmund Tse. He joined AIA in 2006 - well before its New York-based parent revealed massive losses which have since resulted in the US Government pumping an extraordinary US$182 billion ($276 billion) into the company.

When it was subsequently revealed that some AIG staff would still receive multimillion-dollar bonuses despite the debacle, public frustration turned into fury and unleashed a backlash against corporate excess that could yet have far-reaching implications for executives all over the world.

In this month's Vanity Fair, journalist Michael Lewis provides a superb insight into what went on behind the scenes at AIG that nearly brought the global financial system to its knees.

But for Wilson, the controversy has had a silver lining of sorts. To help pay back American taxpayers, AIG has begun selling off some of its most lucrative assets, and has indicated AIA is likely to be among them.

Possibly as soon as early next year, AIA is expected to loosen its ties with AIG, most likely by listing on the Hong Kong stock exchange. News that advisers have already been appointed has been greeted with glee in markets starved of much genuine good news of late, and there has already been speculation the float could raise up to US$10 billion ($15.4 billion).

AIA is believed to have around US$60 billion in assets and has previously told potential investors it has consistently posted operating profits of at least US$2 billion a year. It employs more than 20,000 people, has more than a quarter of a million exclusive agents, and more than 20 million customers.

That's a very big responsibility for a 42-year-old from Rotorua.

It was probably inevitable that Wilson would end up in insurance. His grandfather spent more than 20 years in the industry and his father carried on the tradition for another 40 years or so.

Like many children who follow in their parents' footsteps, however, he didn't initially plan it that way.

Wilson has happy memories of growing up in Sulphur City. When he was about 13, his family bought a farm in Horohoro, just outside Rotorua, where his parents continue to live. His brother and sister also still live in the Bay of Plenty.

He attended Rotorua Boys High School - now famous for its golfing academy which has produced young stars such as Danny Lee - and went on to Waikato University, where he completed a Bachelor of Management Studies.

He believes his humble roots have helped him succeed in Asia.

"When you are born in a place like Rotorua, or New Zealand, it gives you grounded values," he muses. "Some nations when they travel have a lot of arrogance, but New Zealanders don't have that arrogance or that 'we're going to teach the world what to do' attitude ... That helps, particularly in Asia. It goes down well."

Wilson has high praise for Waikato University's business school, and New Zealand's education system in general, which he describes as "first class". He is aware that is not a universal view, but insists Waikato is a "wonderful university".

"I've come across people internationally who have the same degree ... It's really world class and can hold its head up against any of the global universities, without the same pretentiousness of some."

He notes that former Telecom head Theresa Gattung also attended Waikato and did the same degree.

A Rotorua girl herself, Gattung is a few years older than Wilson. The pair did not know each other during their school or university years, but their paths crossed when Wilson decided to do some work experience at National Mutual as part of his studies. At the time Gattung was a senior marketing executive with the company, and was his sponsor.

When National Mutual subsequently offered him a job he initially declined, wanting to break away from family tradition. "But in the end it was too good to refuse and I went there."

He and Gattung remain good friends and she recently joined the board of AIA in Australia. In yet another coincidence, it turned out that their families owned holiday baches a stone's throw apart at Waihi.

According to Gattung, Wilson is a keen fisherman who can still be relied on for a fresh feast. Career-wise, it was apparent that he was going to be a big fish himself, and that New Zealand was always going to be too small a pond, she says.

Gattung was effectively his boss at National Mutual and stuck up for him on several occasions.

"It was quite a conservative situation where you had certain grades and he was just way beyond the level he was graded at. At that point, anyway, he was the most outstanding raw talent I'd ever seen."

She describes him as "the complete package - very smart and determined, and with very good people skills".

She admits she's surprised he stayed in the industry. "In New Zealand, you tend to move industries, but he loved it and it was in his blood, I guess. I could see that straight away and I promoted him along as fast as I could."

Wilson spent 10 years at National Mutual, now known as Axa. He's aware that's unusual for someone in their first serious job, and particularly for someone who had not yet done his OE.

But he thinks it's a shame young people feel the need to job-hop so frequently at the beginning of their careers, often just to get a pay rise.

He nearly left National Mutual after his first three years, but a colleague convinced him to be patient. Eventually he did many different jobs within the company and worked on secondment in several countries. When National Mutual was bought by Axa "it was like a different company", he says, which also helped prevent him from getting stale.

"Sometimes people take too short a view, just for a couple of dollars ... if you move just for money it could be to your long-term detriment. Loyalty is a value that's often under-rated but I see it as fundamentally important to business, and it goes along with integrity. I've got to say I've always been loyal to wherever I've worked."

When he was 31, a colleague who was about to retire convinced him the future was in Asia, and Wilson let it be known he'd like an overseas posting. Axa moved him and his Italian wife to Hong Kong, shortly after the territory was handed back to China.

He immediately felt at home in a society that appeared to share many of his values: loyalty, hard work, enterprise, and a holistic view of life.

"I love the cultural experience. I love the richness and diversity of it. There's a lot of old, sophisticated cultures in Asia and as long as you go in with the view that you can learn something, it's the most wonderful place that just challenges you intellectually."

Like most expats who work in Asia, Wilson is also evangelistic about the region's potential as an economic and political force. While the world is clearly waking up to China's transformation, he believes many Kiwis still don't understand how much the rest of the region is changing as well.

While the West stumbles, the East is continuing to grow - not just India but Vietnam and Thailand and Korea and many other Asian countries, he notes.

Hong Kong itself is already bouncing back from recession with a mini property boom.

"I think a lot of Kiwis still haven't realised the magnitude of it and they still see it in terms of tourism to New Zealand, but fundamentally Asia will possibly continue to be our fastest-growing export partner ... We're now so inextricably linked as a country with Asia. It's just so fundamental to future development and we have made a lot of gains, but we need to make a lot more, and quickly."

Wilson was headhunted by AIA, and for the past two years has helped oversee some subtle and not-so-subtle changes at the company.

One of the changes has been trying to make it a more vigorous and youthful place to work by encouraging more emphasis on health and fitness. Wilson sets an example by going to the gym six days a week.

"Even if it's 11pm when I get home from work, I'll still go to the gym, which is near my home. I believe there's no substitute for being healthy."

A major rebranding is also well under way. In six of its 15 markets, including New Zealand, the company has been known as AIG, but this is gradually being changed to AIA, which has much wider recognition across Asia.

Its Hong Kong headquarters, which used to be known as the AIG Tower, has been renamed AIA Central.

In fact, AIG was founded in China back in 1919 when American businessman Cornelius Vander Starr established an insurance agency there. It only shifted to New York in 1949 when the communist revolution reached Shanghai.

Coincidentally, 1919 was the year that Sir Edmund Hillary was born, and in a nice bit of symmetry, the company's recently updated logo features Mt Everest.

"People in Asia see it as a symbol of stability - having the mountains behind you depicts strength and longevity and there is a connotation of everlasting or Continued from page 14

perpetuity, and all those sort of things."

Naturally, Wilson is keen to promote that image as strongly as possible. AIA is more conservative than most of its peers, he says.

"We have a lot of guaranteed assets; a lot of guaranteed products. The majority of our assets are in government paper and investment-grade corporate paper. We had quite a low exposure to equities and we haven't had issues related to CDOs."

In Asia, he notes, people think of their money in three buckets: the gambling bucket, the savings bucket, and the "well I'll try a few things" bucket. "We sell quite a wide range of products but I guess what has differentiated us is our investment portfolio - it is highly conservative."

He insists AIG has made good progress since September 16 last year, when it was plunged into a liquidity crisis following the downgrade of its credit rating.

After news of its troubles broke, queues formed outside its Singapore office. But in the end the company as a whole lost less than 1 per cent of its customers and only 15 of its top 331 staff, he says.

The headhunter who initially approached Wilson about the job phoned him not long after the global economic crisis hit the headlines to apologise for luring him away from Axa. He told her he didn't regret it for a second, as it was during times of crisis that a chief executive could actually add the most value to a company.

"In tough times people look for strong leadership. It's over that time I think that the AIA team really came together ... I've learned a lot personally and professionally and it's been a wonderful time in my career. It's not the answer most people would expect."

Wilson is fond of quoting The Art of War author Sun Tzu, and Sun's belief that old strategies don't necessarily win new wars particularly resonates with him. In fact, it is one of the mantras of the business - that you cannot afford to be complacent or arrogant, he says.

"I think AIG gets unfairly targeted in a lot of ways and I think they've made enormous improvements in the company and I think they're doing the right things. I think the partnership with the Fed and in other parts in the US system is critical. Everyone wants the same thing - everyone wants to pay back the US taxpayer. We want to, so that we can be an independent company that continues to be strong, and they have given us a roadmap for that. The way forward for AIA has been announced and it is a win for the company and a win for AIG. It is the right solution."

It is unlikely that Wilson will ever return to New Zealand to work, but he's still a passionate Kiwi and keeps in close touch with issues here. He reads the Herald every day online and claims never to have missed an All Blacks match.

He believes the National Government has got off to "an excellent start" and is particularly impressed at the way it has worked with the Maori Party. However he believes there are still tough times ahead economically. "This global downturn is going to be rocky. You're going to see ups and downs and I think in New Zealand you're still going to see uncertainty for some period of time."

Not surprisingly perhaps, he is also concerned that New Zealand is "massively under-insured", and strongly believes we have not yet got our superannuation policy right. He would personally like to see a privately run compulsory super scheme, which could also be used to invest in infrastructure.

"The biggest looming issue is still superannuation, and it's time it got out of the political realm. New Zealand needs to do what every other advanced country in the world has done and make some sort of compulsory super scheme."

Meanwhile, his advice to other young Kiwis looking to spread their wings is to properly plan their flight.

"I do think Kiwis travel well, but if you're doing that you've got to do it not just thinking of an OE. I'd say keep an open mind to New Zealand's place in the world and the impact of Asia."

In Asia, however, it pays to leave the "she'll be right" approach at home, he suggests. "It doesn't really work. It's about the detail; it's about the numbers; it's about understanding what's going on."

Wilson's only criteria when looking for senior staff is that they must be smart and driven. Smart doesn't necessarily mean highly qualified - it might mean highly experienced, or able to motivate others.

"The way I look at it, whether you are born in New York or Rotorua or Te Awamutu, I think everyone starts with talent, and it's really what you want to do with it. Culture doesn't matter to me; gender doesn't matter to me; race doesn't matter to me. But they must be smart and driven. And they have got to have a vision."

His only other advice is to be open to other cultures - and to be prepared to listen and learn. "Some of these cultures have been around for thousands of years. It can't be all wrong."

Wilson's vision for AIA is very specific. But he insists he doesn't have a long term plan for himself, other than ensuring he leaves a proud legacy at the company which he will measure in several ways.

"Obviously the shareholders have to do well financially, the customers have got to get what they pay for, and we have got to live on our promises, but fundamentally the legacy is about the people you leave behind in the business. I think people are responsible for their own careers, but I think I've had an influence on a lot of those people and whether they are Asian or Kiwis doesn't matter. People are people all over the world and that's what I get the buzz out of."

Ultimately, he also gets a buzz out of the belief that he is making a positive difference to entire populations, and not just a company.

"I don't get stressed, but there is a burden for the company when we look after twenty-something million people. That's [equivalent to] the population of Australia. They're entrusting us with their retirement, or their life, or their medical insurance, or whatever it is. We take that seriously."