Australian insurance companies wanting to do business in Asia must understand the difficulties in growing rapidly in the region, according to former QBE CEO Asia-Pacific Mike Goodwin.

Speaking at the Australasian Institute of Chartered Loss Adjusters’ Asian Claims Conference in Bangkok on Friday, he warned that Australian companies have to learn how to compete for business “and recognise that Australia is not the only player in the game”.

“The more you understand about Asia the more you don’t know,” said Dr Goodwin, who has spent the past 10 years in Asia travelling extensively in the region.

“While it’s important for businesses from developed countries to build Asian operations, they have to understand it’s not one country – it’s 60 countries covering a vast area, and each one is completely different from all the others.”

He says Asia’s population will grow by another billion by 2050, “increasing each year by the population of Australia”.

While economic growth is obvious, most Asians still can’t afford insurance. As populations become more urbanised – China and India are the major examples – motor insurance is the largest product in most markets.

“Markets in other countries, like Vietnam for example, are growing, but actual market penetration remains low,” Dr Goodwin said.

He says regulators in the region base their rules more around banking and life insurance than general insurance, brokers are growing market share despite the growth of the internet, and relationships, trust and respect remain essential factors in developing business.

“It takes three to five years to develop business relationships, but non-Asian companies fail to understand the importance of this,” Dr Goodwin said. “Companies turn over their managers every few years, which means their replacements have to start all over again.

“Companies which understand this and leave key managers in place for long periods do fantastically well.”

He says companies must also respect cultures “between countries and within countries”, and embrace the differences.

“Listen and learn,” he said. “Look for a local ‘buddy’ from within the culture who can help you learn and to communicate.”

He says Australia’s education system does not do enough to encourage the learning of Asian languages. “We are culturally inept,” he said. “It’s time Australians did what their Asian counterparts do and learn other languages and about other cultures.

“We have to understand that things take longer to happen in Asia. Success doesn’t happen overnight. It takes many years.

“Things aren’t the same, and we should embrace the ambiguity.”

Dr Goodwin stepped down as QBE’s CEO Asia-Pacific in July last year. He remains as a non-executive director of a number of QBE subsidiaries in Asia.

insuranceNEWS.com.au was the media partner for last week’s two-day Asian Claims Conference, which attracted loss adjusters from across Asia as well as Australia and New Zealand.