2023 is a complex and volatile year for China's life insurance industry, which has not only experienced the highlight of strong growth in new premiums after the recovery of consumption, but also faced challenges brought about by strict regulatory policies such as the reduction of scheduled interest rates for life insurance products and the "integration of newspapers and banks" in all channels. On the asset side, whether it is the trend of long-term low interest rates or the volatility of the equity market, it is more difficult to allocate insurance funds.
However, in the face of rapids and rapids, the pressure of transformation, there is no shortage of people in the industry who buck the trend and break the situation, as the vanguard of the bank-postal life insurance, in recent years, China Post Insurance has accelerated the market-oriented reform, and a series of important measures such as capital increase, channel transformation, asset management "fall", and digital layout have been implemented one after another. Benefiting from the new momentum unleashed by transformation and reform, in 2023, China Post Insurance has made breakthroughs in new business value, optimization of debt costs, and multi-channel construction.
From the perspective of reform effect, the value creation ability of China Post Insurance has been significantly improved, and the endogenous growth potential has been continuously released. So, what has China Post Insurance's reform and innovation done right, and what are the lessons to be learned?
The transformation is beginning to show results
Value creation exceeds expectations
In 2023, the bancassurance channel, which has returned to the main stage of life insurance, has undergone in-depth adjustments. On the one hand, in order to regulate the healthy development of the bancassurance channel, the regulator has promoted the strict implementation of the new regulations on the integration of newspapers and banks, which has also broken the inertia of the bancassurance channel relying on competition with high fees, and the ecological pattern is facing reshaping.
Under the transformation and adjustment, how can the postal and banking insurance companies, which have accumulated a lot of experience in the bancassurance channel, face the challenges and respond to the situation?
What kind of answer sheet has been handed in in the stressful year of 2023, which has attracted the attention of the market. "A Smart Insurance" noted that China Post Insurance, with the medium- and long-term development vision of striving to be a first-class insurance company, has made breakthroughs in business development in many aspects in 2023.
According to the 2024 work conference held by China Post Insurance, as of the end of 2023, the total assets of China Post Insurance will be 482 billion yuan, an increase of 8% from the beginning of the year, ranking eighth in the industry, and the operating income and premium income in 2023 will exceed 100 billion yuan for the first time. In addition, the business structure of China Post Insurance has been significantly optimized, and a new pattern has been built from a single delivery to a term delivery, and from short-term delivery to risk protection and long-term savings.
If the continuous optimization of the business structure is the "seed" sown by China Post Insurance for high-quality development, then the rapid growth of business value against the trend is the fruitful fruit of its harvest. According to the relevant person in charge of China Post Insurance, the value of new business of China Post Insurance will increase by 16% year-on-year in 2023 to 8.27 billion yuan, maintaining the fifth place in the industry.
In 2023, the company's new debt cost ratio will be 3.91%, a year-on-year decrease of 18 bps to less than 4%, and the future surplus of the policy will be 20.5 billion yuan, with a marginal balance of 40 billion yuan, an increase of 11.7 billion yuan from the beginning of the previous year, fully reflecting the momentum of endogenous growth in the operation and development of China Post Insurance.
Adjusting structure, increasing value, and reducing costs, it is obvious that in 2023, China Post Insurance as a whole will hand over a report card of steady progress and multi-dimensional breakthroughs, which also indirectly shows that the market-oriented reform of China Post Insurance has begun to show results, and has bred new momentum for its high-quality development.
"New achievements have been made in high-quality development, new breakthroughs have been made in market-oriented reforms, and core competitiveness has reached a new level. At the 2024 work conference, Liu Aili, Secretary of the Party Leadership Group and Chairman of China Post Group Co., Ltd., commented on the business achievements of China Post Insurance in the past year.
Channel remodeling, multi-point breakthrough
Exploring the "New Paradigm" of Bancassurance
Compared with the better results of China Post Insurance in value creation, perhaps the market is more concerned about what China Post Insurance has done right in terms of landing practice, and what can be used for reference by the industry? From the perspective of channel management, it has to be mentioned that China Post Insurance has strongly promoted the channel strategy of "one main and multiple auxiliaries" with China Post Insurance as the main body and "one main and multiple auxiliaries" in the past two years.
From the analysis of each one, it is needless to say that the postal bank has always been the main channel of China Post Insurance. In line with the development law of "making the longboard longer", China Post Insurance chooses to cultivate intensively and meticulously in the postal and banking channels. Specifically, on the one hand, the company has comprehensively strengthened the empowerment of the main channel, based on specialization, and focused on building "three teams" of full-time lecturers, part-time lecturers and insurance planners. According to reports, at present, there are 504 full-time lecturers, 2,450 part-time lecturers, and 2,927 insurance planners. For example, the construction of the scenario-based service platform "Health Station" has been started and 74 have been put into use.
In terms of operating results, in 2023, the scale and value of China Post Insurance's main channel business of postal and banking will hit a record high, with new policy premiums of 38.9 billion yuan, a year-on-year increase of 24%, of which the premiums of whole life insurance paid for five years or more account for 87%, an increase of 13 percentage points year-on-year.
Indeed, the current bancassurance channel is entering a new stage of development, and the era of relying solely on fees and price competition has passed, and the bancassurance channel urgently needs to contribute value on the basis of pulling scale. In addition, after the implementation of the new regulations on the integration of newspapers and banks, banks and insurance will also move towards deep integration. This requires insurance companies to strengthen internal reforms, improve the professionalism of bancassurance channel sales and the value of product supply, and China Post Insurance has seen this and gradually explored a "new bancassurance" model suitable for itself.
In addition to intensively cultivating the main postal and banking channels, as mentioned above, China Post Insurance is also trying to open up the "second growth curve" and create a new channel growth pole, that is, through the development of bancassurance outreach, group insurance, intermediaries, etc., to make external channels break the situation at multiple points.
Such a strategic layout has proved to be quite forward-looking. According to the data, in 2023, China Post Insurance's bancassurance outreach, group insurance, and intermediary channels will achieve a total of 5.4 billion yuan in new single premiums, and new channels will account for more than 10% of new single premiums in one year. Among them, the number of national banks cooperated with bancassurance has expanded to 4, with new premiums reaching 3.75 billion yuan, group insurance premiums have exceeded 1 billion yuan, a year-on-year increase of 84%, and the reform of the group insurance business department has achieved profitability two years ahead of schedule, 15 intermediary channel cooperation has achieved a premium of 560 million yuan, and new individual insurance has entered the stage of market-oriented verification.
To this end, the company will launch the health care business in 2023, build an "insurance + service" ecology, sign a strategic cooperation agreement with General Health and General Health Care to promote the breakthrough of the health care business, and successfully launched the "YOU Health" service sub-brand. These explorations and practices not only indicate that China Post Insurance will accelerate its entry into the field of health services, but also an important measure for it to develop an "insurance + service" empowerment system and leverage the deep transformation of its business.
For example, the multi-channel business strategy of "one main and multiple auxiliaries" reflects the idea of elongating the board and making up for the shortcomings, while the layout of health care reflects its overall view and vision of practicing the national strategy and catering to the market demand.
Forging a strong digital engine
Comprehensively empower business governance
In recent years, major insurance companies have also actively used cutting-edge technologies such as big data and artificial intelligence to deeply integrate with all aspects of the insurance business, in order to reduce costs, increase efficiency and improve user experience.
Under the general trend of actively promoting digital transformation by industry players, China Post Insurance has also taken the initiative to enter the first echelon of digital innovation.
2022 is the first year of science and technology for China Post Insurance's "new generation" digital construction, at that time, the company put forward the strategic vision of "customer-centric, data-driven, and comprehensive digitalization of enterprise operation and management", and clarified the development goal of "entering the advanced ranks of the industry within two years", comprehensively launched enterprise-level digital transformation, and accelerated the creation of a "new generation" digital platform.
It is not difficult to observe the idea of the digital transformation of China Post Insurance, and it is not difficult to find that its strengthening of the construction of the digital platform is in line with the guidance of regulatory policies. In January 2022, the former China Banking and Insurance Regulatory Commission issued the "Guiding Opinions on the Digital Transformation of the Banking and Insurance Industry", pointing out that it is necessary to improve data governance and application capabilities from four aspects: improving the data governance system, enhancing data management capabilities, improving data application capabilities, and strengthening data quality control;
From the perspective of the progress and effectiveness of digital transformation, over the past year, China Post Insurance has built six platforms of channels, marketing, customers, operations, management and technology in accordance with the goal blueprint of "online service process, automated business processing, intelligent application scenarios, and centralized professional operation", and comprehensively improved its digital capabilities.
Overall, the digital transformation of China Post Insurance has reached the first phase of the goal. It has achieved full coverage of customer touchpoints, data-based business operations, and integration of business and financial data, and strengthened the application of cutting-edge digital technology and data. In addition, its digital capabilities have also been recognized by the market, and it won the honor of "Best Big Data Intelligent Risk Control Application Award at the 5th China Insurance Technology Innovation Cooperation Conference".
For example, in 2023, China Post Insurance and Postal Savings Bank will carry out a digital and intelligent transformation marketing campaign, taking the opportunity of empowering the "online + offline" ecological scenario of insurance by digital and intelligent means, to create a new "three-pronged" service model of full life cycle guarantee support, full-process customer journey optimization, and all-round matrix coverage marketing.
Based on the effective implementation of a series of technological applications, the integration of the main channels of China Post Insurance and Postal Savings Bank has become more in-depth and efficient, and the insight into customer needs and service capabilities have been significantly improved, which has ultimately boosted the development of futures delivery business and reflected the empowering effect of digital means on the quality and value of insurance business.
Of course, digital transformation cannot be achieved overnight, it is a long-term, continuous investment process. Based on this understanding, China Post Insurance said that on the one hand, it will drive business development with digitalization and promote comprehensive reform of operation and governance with digital transformation, and on the other hand, it will improve management efficiency with digitalization and promote the digitalization of the whole process of enterprise management. At the same time, we will accelerate the construction of independent R&D teams and independent and controllable capabilities, and create an efficient integrated system of R&D operation and maintenance.
Deepen reform and innovation
Anchor the strategic blueprint of a first-class insurance company
The high-quality development of insurance companies is inseparable from a deep grasp of the internal and external environment. Today's world is facing great changes, the social, political and economic situation is more complex than before, and the uncertain variables have increased significantly, but the more unpredictable the form, the more insurance companies are required to strengthen their strategic focus and explore new opportunities with the attitude of taking the initiative to break the situation.
Based on this, China Post Insurance has put forward the medium and long-term development vision of "building a first-class insurance company", and used it as an anchor to enhance its core competitiveness. Recently, at the company's 2024 work conference, Liu Aili emphasized that he hopes that China Post Insurance will be more determined to build a first-class insurance company's strategic self-confidence and strategic consciousness, and strive to create a new situation of high-quality development.
After the initial "seven basic requirements" for building a first-class insurance company in 2022, in early 2023, China Post Insurance officially clarified the "seven standards" and "six comprehensive" strategic paths, and after practice and exploration, China Post Insurance further put forward the "five leads" of party building, innovation, professionalism, science and technology, and culture in mid-2023, and comprehensively launched to build the "most trustworthy first-class insurance company".
Han Guangyue, Secretary of the Party Committee and Chairman of China Post Insurance, pointed out at the 2024 work conference that the strategic deployment of "seven standards" and "six comprehensives" is the general outline of building a first-class insurance company, which must be consistently integrated into all aspects of development, construction and management. The "Five Leads" are the key starting points on the road to becoming a first-class insurance company, and they must be consistent at present and for a long time to come.
Indeed, from the perspective of the "five leads" proposed by China Post Insurance, it can be said that both hard power and soft power are taken into account. The "five major leaders" are: focusing on the leadership of party building and continuously consolidating the political guarantee for high-quality development, focusing on innovation and leading and continuously optimizing the system and mechanism, focusing on professional leadership and comprehensively improving marketization and professional capabilities, focusing on science and technology leadership and continuously enhancing the maximum momentum of development, and focusing on cultural leadership and concentrating on building core soft power.
So, after anchoring the medium and long-term strategic vision, how will China Post Insurance take advantage of the momentum and transform into a tough nut in 2024?
In view of the current development stage of China Post Insurance, Han Guangyue said frankly that the current China Post Insurance has fully entered a critical new stage of accelerating the construction of a first-class insurance company, and it is necessary to coordinate and optimize the combination of five aspects: "establishing the current and long-term benefits, emphasizing operation and strong management, forging long boards and making up for shortcomings, strengthening headquarters and excellent provincial points, preventing risks and seeking development", and strive to improve the scientific, forward-looking and comprehensive nature of the work. In 2024, we will strengthen the "five major leads", optimize the five combinations, and strive to achieve effective qualitative improvement and reasonable quantitative growth.
Obviously, as a leading insurance company in the banking and postal system, China Post Insurance is taking the opportunity of building a "first-class insurance company" to embark on the road of high-quality development. Among them, improving the ability of value creation, promoting market-oriented reform, creating a channel pattern of "one main and multiple auxiliaries", laying out the health care ecology and deepening the digital transformation are important starting points for China Post Insurance to make breakthroughs and achieve steady and long-term development.