Why MGA is exploring new frontiers in broking
John George, chairman of MGA Insurance Brokers talks Insurance Business Online through the reasoning behind their expansion into South East Asia, beginning with their Cambodian office.
Video transcript below:
Reporter: MGA Insurance Brokers opened their first office in Cambodia’s Phnom Penh on the 1st of January, becoming only the second foreign broker in the capital. We caught up with Chairman, John George to hear more about why and to garner some advice for brokerages considering a similar move.
John George, Chairman, MGA Insurance Brokers
John George: MGA this year has its 40th birthday and it was through that period of time, there’s been a steady growth from humble beginnings in Adelaide to growth throughout South Australia, then Australia where as a national player we now have 28 branches and the next step for us we felt and have felt for some years now is to put a footprint into Asia.
Reporter: George believes that as a first of many foreign businesses it would take a leap of faith into South East Asia because of the relatively low cost base.
John George: And just from our observations in Asia and Cambodia in particular, there is a tremendous amount of businesses now moving into Cambodia, into the economic zones, manufacturing businesses, basically because of the wage conditions there, salary conditions and we are going to see that’s going to, I believe that’s going to increase as the standards of the living of the western world have grown, people are demanding more, they are being paid more, so I think we will see gravitation of quite a bit of manufacturing industry into that zone. But places like Myanmar are basically next door to Cambodia I think, that’s will be also the next big area of expansion for businesses.
Reporter: George has two key pieces of advice for anyone looking to set up abroad. Make sure there is a personal connection and stay on top of local legislation.
John George: The first thing is if you are going to get bed with somebody over there, make sure that you know them and that they are your good friends. I think that’s the first thing, the personal connection with those people are extremely important, because otherwise as many businesses have found that have got involved in the Eastern countries, their capital tends to evaporate. So that’s the number one thing and the number two thing is be very familiar or familiarise yourself with the local rules and regulations, the local government laws and because whether you like it nor or whether you agree with those or not, just because you do it in a certain way in Australia, you are on their turf and you’ve got to learn that you’ve got to run things along the lines that they require.