IRC Read & Delete: Wise Words from Taiwan's 'Father of Trade Credit Insurance

We would not be much without our friends in the ICBA. Jack, Lily, Jessica and Catherine of Alexander Leed, Taipei joined the Alliance just before IRC applied for membership, and are we glad they did!

One of the most active bilateral relationships in all of the International Credit Brokers Alliance (ICBA) is between Taiwan and the U.S. Meet our partners at Alexander Leed.

R&D: This month, we are pleased to introduce our ICBA partner for Taiwan and Vietnam, Mr. Jack Sun, and his colleagues at Alexander Leed (AL) in Taipei. Jack is Founder, Owner and CEO of Alexander Leed and can fittingly be called the “Father of Trade Credit Insurance in Taiwan.” Thank you for joining us, Jack. Please tell our readers the story of your beginning in this industry. Is it true that you had to begin an industry in order to begin a company?

Jack: I first stepped into general insurance brokerage from a background in export trading and electronic manufacturing. Thirty-five years ago, when the broker’s role was not known to the public in Taiwan, I began as a trainee in a subsidiary of an international broker. In those days, Exim Bank (Exim Bank Taiwan) was the only one that could provide credit risk cover for exporters on a direct basis. The substantial growth of Taiwan’s export sector, especially in the electronics industry where open account credit terms were required by the buyers, attracted my eyes to the potential opportunity for trade credit risk insurance. However, there was no such insurance market in Taiwan. Following the successful arrangement of a policy issued by a North American insurer in 1997, Lily Huang was asked to cultivate opportunities by educating our prospective customers with series of two-page write-ups. She canvassed the electronic industries first and followed up by sales calls. Six months later, a second policy was secured from Lloyds of London. Driven by the emerging opportunity, insurers finally made all arrangements necessary for local policy issuance to enable broker to better perform its role to service the client. We were in a good position when that finally happened.

R&D: So from that beginning, what were the key developments over the years that led to your present pre-eminence in the industry?

Jack: Pioneering the credit insurance service in Taiwan enabled Alexander Leed (ICBA Taiwan) to gain a wide range of expertise required to tailor the cover to suit different types of models in trade. We soon had an in-depth understanding of our clients’ need and developed success stories on some very large credit limits. We always offered proactive service and a problem-solving attitude to our customers, as well as continuous customer education. Successful sales activity and good performance on the accounts of a growing customer base, allowed us to grow and build up as the most professional trade credit insurance service provider in Taiwan. We still hold that position today.

R&D: Your team has the reputation of working together as tightly as fingers in a fist, and for years the AL team has been comprised almost entirely of dynamic women brokers. Women in leadership positions are still uncommon on the broker side of our industry globally. Tell us about Lily Huang, Jessica Liu, Catherine Wu and the rest of your colleagues.

Jack: Generally speaking, women in my experience have shown the patience and problem-solving tenacity needed to succeed in this industry. They can be effective responding to the wide range of personalities that we run into on the client side, and still capable of handling the many details involved in guiding clients to proper policy maintenance. In Taiwan, it is a common phenomenon in the insurance industry to see a higher proportion of women involved compared to some other countries. Lily Huang and I were joined by Jessica Liu a couple of months or so after we began in 2001. Since then, our firm has grown to 11 persons. Lily and Jessica not only led our efforts on business development in the earlier stage, but they also were responsible for the hands-on service we offered to clients. After a decade of rapid growth, Catherine Wu was recruited to be a dedicated sales person, and we added additional people to the service side as well. More recently, a collection service resource has been established to help prospective clients.

R&D: You are the largest broker for the two-country region you serve. What is different about the Alexander Leed approach?

Jack: Alexander Leed is one of the best brokerage houses for credit insurance, and we differentiate ourselves with excellent service and in-depth expertise related to A/R risk management—expertise that is not only limited to credit insurance. Our approach is to function as a member of our clients’ A/R team and to assist them with all of their A/R related issues. We even help them outsource specific solutions where the need is indicated and the result is helpful to our clients.

R&D: …and what cities do you operate from?

Jack: AL is based in Taipei, Taiwan, with a representative stationed in HoChiMinh city, Vietnam.

R&D: You became a member of the ICBA just before we joined in 2004, and for your first meeting, you were the only member from outside Western Europe. How did you happen to join the Alliance?

Jack: Unlike general property and casualty insurance which is well known to the public of countries in Asia, trade credit insurance was quite a new insurance product when AL decided to make it a core expertise. The strategy was effective, and soon our Taiwan headquartered multinational clients were asking about similar service from us for their operations domiciled overseas. We found the International Credit Brokers Alliance on the Internet then asked them about the possibility of developing local overseas contacts for Taiwanese insureds. Lily went to London to make a formal presentation to an ICBA plenary session in 2003. We were admitted as the member for Taiwan initially, and when we presented an application during the South African plenary session in 2011, we were also recognized as ICBA member for Vietnam.

R&D: And good for IRC that you were when we arrived in 2004. One of the very strongest bilateral relationships within the entire ICBA group over the years has been that between your team and our West Coast team. Now Alexander Leed is ICBA Taiwan for assistance with Trade Credit Insurance placements, but your company is also active in other areas of property and casualty insurance in Taiwan and Vietnam. How does that work? Can you talk about how your team works within the larger company framework?

Jack: Thank you for mentioning the relationship we have developed with Jeff Jankowiak, Pearl Kamdar, Lindsey Seibert and Austin Leo in your California offices. We enjoy working with that team very much. As for our other efforts in Taiwan, AL has developed expertise in various areas of insurance that we deliver with any one of three internal teams: general insurance (property, casualty, marine cargo); employee benefits; trade credit insurance. Trade credit related revenue is just over 50% of our total. One of the merits of our set-up is the synergy that the different lines of business provide to one another. Many of our clients eventually come to see us as a one-stop solution, because our service is similarly good in all three areas.

R&D: What does the near-term market look like for Trade Credit Insurance, both in Taiwan and the Asia-Pacific region overall? How do you characterize the opportunity?

Jack: Given the current world economic situation and continuing downward trend of Taiwan exports, the growth of commercial trade credit insurance in Taiwan may be affected as well. While this is not good news for the private insurance sector, Exim Bank (Taiwan) is well positioned to support sales to emerging markets in the region alongside the government’s stated mission to support the “southbound” marketing strategy of the country. Underwriting has already become more conservative in fact. For the near term, we foresee that lower approval ratios may be expected. However, this may represent better opportunity for brokers with innovation and good brokering skills to find solutions to meet the credit limit requirements.

R&D: Thank you so much for joining us today, Jack. We will see you in San Francisco in a few months at the October plenary session of ICBA.