Dialogue with Li Jing: The pattern is already very clear, now to do subtraction

Economic Observer reporter Jiang Xin On October 19, Taiyuan's "Ten Thousand Households Health Insurance" was officially launched, which is an inclusive medical insurance jointly underwritten by Zhonghui Mutual and PICC Life Insurance Taiyuan Zhongzhi. On the 18th, Li Jing, chairman of Zhonghui Mutual, and three colleagues rushed to Taiyuan.

This inclusive medical insurance is different from other "huimin insurance" projects, in addition to the supplementary protection function of medical insurance, it also focuses on the protection of the elderly with chronic diseases, and the innovative way reflects the public welfare inclusive attribute of mutual insurance. With the launch of the conference, the preparations for half a year have finally come to an end. Li Jing also has a new plan to expand the public welfare inclusive insurance project to other cities.

In 2015, shortly after the former CiRC issued the Trial Measures for the Supervision of Mutual Insurance Organizations, Li Jing led the preparatory team to submit the application materials. On June 22, 2016, Zhonghui Mutual Insurance Society was approved for establishment, and since its official opening on February 14, 2017, Zhonghui Mutual has gone through nearly 5 years.

As the helmsman of the first mutual insurance society in China, Li Jing's exploration path has also gone for nearly five years. She once recalled the company's development in the past few years: Zhonghui went through detours with each other, but "blew out the wild sand and began to gold".

One afternoon in October 2021, as Beijing entered the crisp autumn weather, a reporter from the Economic Observer and Li Jing had a conversation in the courtyard where Zhonghui was located on the edge of the second ring road.

Affectionate and gentle is Li Jing's initial impression of reporters, and after the interview, the delicacy, tenacity and strong learning ability of female managers are impressive. When it comes to mutual insurance, Li Jing talks about the history of vertical development and the development of the global market in a horizontal way.

Five years of mutual road, adhering to the market positioning of "filling in the shortcomings and filling in the blanks", the benefits of the people and the exploration of each other, Li Jing recognizes the label of "pioneer".

But the road is not easy to walk.

Bonding with each other

The countryside is the same well, the in and out of the friendship, the watchful eye, the disease support, the ancient red and white happy event "get together"... This may be the first germ of mutual insurance.

Mutual insurance is a new force in Chinese insurance, but it has a long history, ahead of joint-stock insurance, and has always occupied an important position in the global insurance market with its unique advantages in risk protection and organizational operation. Through thousands of years, the vitality of mutual insurance is still strong, and it is an international mainstream insurance form.

Li Jing's first job was connected to it. In 1992, after graduating from the Law Department of Peking University, Li Jing was assigned to the China Shipowners Mutual Insurance Association managed by COSCO Group, responsible for underwriting and claims related to shipowner liability. In 1993, Li Jing was sent to Ping An, China. If the Shipowners Mutual Insurance Association, which is engaged in marine insurance business, is Li Jing's enlightenment to insurance, the work at Ping An in China has pushed the door for her to enter the insurance industry.

From marine insurance to property insurance, from professional fields such as underwriting reinsurance claims to attempts at liability insurance, and from life insurance to health insurance, Li Jing has almost experienced the whole process of the insurance industry. In her own view, starting from the work of marine insurance, she has a deeper understanding of the development history of the insurance industry, and after basically understanding all the various categories of insurance, it is easier to see the underlying and internal basic logic of insurance development.

The change occurred in 2014. At that time, the former Circus issued the Interim Measures for the Administration of Mutual Insurance Organizations (Draft for Solicitation of Comments), soliciting opinions from the public on mutual insurance organizations, and Li Jingmeng moved on new ideas.

Li Jing's team began the road of learning and research. She has translated and studied all the insurance laws of the United States, Japan, Germany, etc., and carefully studied the cases of the creation and transformation of foreign mutual insurance organizations. According to her recollection, on New Year's Day 2015, Li Jing found a manuscript of the 1901 (Meiji 34) Japanese Insurance Law in the Peking University Library, which contained complete legal provisions and regulatory rules on mutual insurance, which gave her a lot of ideas.

In January 2015, shortly after the former CIRC issued the Trial Measures for the Supervision of Mutual Insurance Organizations, Li Jing led the preparatory team to submit the application materials to the former CIRC for the first time. On June 22, 2016, three mutual insurance societies were approved for establishment, namely Zhonghui Mutual, Huiyou Construction Engineering and Xinmei Mutual, and on February 14, 2017, Zhonghui Mutual was officially opened, becoming the first national mutual insurance organization in China.

According to official data from the International Federation of MutualLy Cooperative Insurance Organizations (ICMIF), in 2017, more than 5,100 mutual insurance organizations around the world jointly generated $1.3 trillion in premium income, accounting for about 1/4 of the global insurance market, with total assets of $8.9 trillion, 1.16 million practitioners, and 922 million service members.

Five years on each other's roads

The road to entrepreneurship is not a horse, and li Jing's road of mutual insurance is the same.

As a mature organizational form in the world, the cultural concept, business logic and operation mechanism of mutual insurance are self-contained, but they are limited by the late start of the development of mutual insurance in China, and the era environment, social and cultural environment, and technical environment are very different from those in Europe and the United States, there is no precedent to follow in terms of corporate governance, operating capital raising, business model, etc., the regulatory system is gradually improving, coupled with the vision pattern, limited ability and experience, domestic mutual insurance has not yet been fully developed. "From mutual insurance associations to commercial insurance, and now back to the form of mutual insurance, what areas are not covered by commercial insurance, but are suitable for mutual protection?" What are the new possibilities for mutual insurance? Li Jing has always thought like this.

In the process of domestic insurance history development, mutual insurance is still in the initial stage of development, but the commercial insurance market is already in the stage of full competition, and several mutual insurance companies are facing a fierce competitive environment with high homogeneity in the industry, and it is difficult to find a suitable development path. "The development of mutual insurance must find its own soil, as a latecomer can not compete with the existing large insurance companies, it is not easy to make their own characteristics."

In the interview, Li Jing recognized the label of "pioneer". It is true that in the face of the expectation of supervision to "fill in the shortcomings and fill in the gaps", as well as the positioning of "small and refined, specialized and beautiful", it is not easy to get out of a characteristic road.

One of the most significant features of the difference between mutual insurance and other commercial insurance is the consistency of the identity of the insured and the insured, that is, the user can become a member of his organization after purchasing insurance, and the members can "co-build, co-govern and share", which can effectively reduce transaction costs and solve the problem of information asymmetry between the insurer and the insured through democratic management, shared risk and shared benefits.

In Li Jing's view, in the traditional commercial insurance, the insurer and the insured can be figuratively compared to the "negotiation table", the interests of both parties are inconsistent, and the two parties in the mutual insurance relationship have the same interests, which can be compared to the "round table of communication", the insured is the "shareholder" of the organization after applying for insurance, if the claim is settled, the insurance liability is paid, if the claim is not settled, the benefit sharing can be enjoyed, and has the concept of "mutual assistance and risk sharing". It helps to effectively reduce the phenomenon of insurance adverse selection and moral hazard, and better protect the rights and interests of members.

While there is a unique flexibility in organizational form, it is not easy to find a differentiating path in the white-hot competition of the insurance market. So far, Li Jing and her team have anchored their own direction - health insurance, as a pioneer, in the blue ocean of health insurance market to find the special opportunity to belong to mutual insurance.

Speaking of this, Li Jing can't help but "spit bitter water", a project is not easy to do - specific fields, specific groups of people, but in the fully competitive market, the blank spots left are hard bones; stronger risk control capabilities are needed, sufficient market education is needed, and low-cost and effective ways to reach and operate them.

Li Jing once recalled the company's development in the past few years: Zhonghui has taken detours with each other, but "blowing out the wild sand begins to gold".

During the four-year period, Li Jing's firm direction has not changed, "We began to enter the field of kidney insurance at the end of 2016, began to work as a truck driver group in August 2017, and only really blossomed this year"; and the new partners are more like-minded. For example, after 2018, Zhonghui has successively introduced several new investors to each other, and has also had more in-depth cooperation in the field of health insurance.

Deep health insurance

Observe the mature experience of the international mutual insurance market, such as BUPA in the United Kingdom, Caesars Medical in the United States, MGEN in France; or vertical specific groups, veterans, doctors, farmers and other organizations, which can be described as a long-established, "big special big", established in recent years, highly vertical "starting small". Perhaps, this determines two distinct paths of mutual insurance. Looking back at the development process of China's mutual insurance, or is walking on the road of "small and beautiful" and deeply cultivating specific segments, especially in the context of the national strategy of "Healthy China", its own unique advantages will make a difference in health insurance and other aspects.

Along this development vein, Li Jing also anchored the field of health insurance. As Li Jing said, the organizational form of mutual insurance has excellent application scenarios in the field of health insurance. In her view, health insurance is a typical field of information asymmetry, involving the insured, hospitals, medical and health management systems and other aspects, risk control requirements are extremely high, and difficult, the focus of its risk control is process management, and the insurance company in this chain of the customer's insurance, medical information, etc. lack of necessary real understanding, resulting in information asymmetry between the insurer and the insured. Insurance companies are often the party who pays the insurance premium after the fact, and do not participate in risk control throughout the process, which causes the insurance company to be in a weak position, so that the operational risk of health insurance is mainly controlled by medical institutions and insured. Zhonghui Mutual brings medical institutions and insured persons into the mechanism of "co-construction, co-governance and sharing", and effectively reduces business risks through process control, as well as supervision mechanisms and incentive mechanisms.

As an insurance organization with a mutual aid nature, it often focuses on a specific group, which has a clearer understanding and evaluation of its own risks, which can well overcome the problem of information asymmetry and better prevent adverse selection. Members understand each other, and their interests are related, there is a strong moral atmosphere, and the possibility of moral hazard is relatively low, so as to avoid risks such as insurance fraud. This is also the basis for the mutual efforts of the public to "specific areas" and "specific groups of people".

In order to be more professional in this field, Li Jing also learned about the medical field through the Wudaokou of Tsinghua University and the Johns Hopkins Hospital Management Program of Tsinghua University.

Do the present

The data shows that from 2007 to 2017, global mutual insurance achieved a growth of 29.8%, far higher than the growth rate of the global insurance market; the share of mutual insurance in the European insurance market rose from 24.3% to 32.7% in the decade; and the market share in North America rose from 28.8% to 38.3%. From the perspective of insurance types, especially in more developed areas such as Europe and the United States, the higher the proportion of mutual health insurance, occupying a major position.

Referring to the development of the international market, the development of mutual insurance seems to have unlimited imagination space. But in the same way, mutual insurance faces many difficulties, how to stimulate the insurance demand of potential members, how to operate and promote, how to continuously reduce transaction costs, including innovation and adaptation of existing regulations, which are all huge challenges. From the perspective of the top-level structure, the regulatory authorities have issued documents, but there are no detailed rules, and their corporate governance structure, solvency management, etc. are not significantly different from other forms of insurance; in particular, the lack of capital raising and supplementary methods with mutual insurance characteristics need to be solved in the gradual development.

These have not affected Li Jing's direction, and the "Healthy China" strategy and the good development prospects of mutual insurance with inclusive attributes in the context of common prosperity have strengthened Li Jing's pace.

"For us, the most important thing is to do a good job in front of us, so that the mutual model is well recognized, and more members participate and form self-dissemination." As far as we are concerned, the model is already very clear, and now it is to do subtraction, to do deep and thorough work in our selected fields; it is easy to design an insurance product for a specific group, but it is not easy to stick to it as a business model, which not only requires the professional operation of its own team, but also needs to maintain close and long-term cooperation with partners to form an integrated operation capability of the whole chain," Li Jing said.

"Mutual makes me love insurance more", Li Jing said, "things are not afraid of difficulties, things are not hidden", since we have chosen the road of mutuality, we must return to our original intentions, do it in a down-to-earth manner, and firmly walk out of the "specific group", "specific region" and "special protection model".