Guo Xiaotao: Deepen digital operation, do a good job in five major articles on finance, and serve the construction of a financial power with high-quality development

On October 30, 2023, General Secretary Xi Jinping presided over the Central Financial Work Conference, which proposed for the first time to "accelerate the construction of a financial power", elevate financial work to a higher strategic level, and point out the direction and strengthen confidence in the road of financial development with Chinese characteristics. At the seminar on promoting high-quality financial development for major leading cadres at the provincial and ministerial levels held on January 16, 2024, General Secretary Xi Jinping's important speech further clarified the core elements of building a financial power and pointed out the practical path of building a financial power. Finance has always been the blood of the national economy, an important part of the country's core competitiveness, and has a bearing on the overall situation of Chinese-style modernization. To do a good job in financial work, we must adhere to and strengthen the party's overall leadership, do a good job in science and technology finance, green finance, inclusive finance, pension finance, and digital finance, and comprehensively support the high-quality development of the real economy.

Since its establishment in 1988, Ping An has always followed the national strategic direction, practiced the original aspiration of "Finance for the People", adhered to the technology-driven two-wheel development strategy of "integrated finance + medical health", leveraged its accumulated resources and advantages in the fields of finance and insurance, medical and health, and science and technology, fully supported the real economy, actively fulfilled its social responsibilities, and provided customers with "warm" financial services. At the same time, the company has strengthened risk management, adhered to the bottom line of compliance, maintained financial security, and unswervingly followed the path of high-quality development with Chinese characteristics, creating long-term, stable and sustainable value for customers, employees, shareholders and society, and supporting the construction of a financial power.

Guo Xiaotao, Co-CEO and Deputy General Manager of Ping An Insurance (Group) Company of China Co., Ltd

Ping An's digital exploration

Digital finance is one of the five major articles of finance, which is inseparable from the digital economy and even the construction of digital China. General Secretary Xi Jinping has profoundly pointed out that digital technology is being fully integrated into all fields and processes of human economic, political, cultural, social and ecological civilization construction with new ideas, new formats and new models, bringing extensive and profound impact on human production and life. The 20th National Congress of the Communist Party of China also made major arrangements to accelerate the construction of a cyber power and a digital China. The construction of digital China has increasingly become an important engine and strong support for promoting Chinese-style modernization through informatization.

In Ping An's view, digitalization is a basic project to promote the progress of human society and improve productivity in the 21st century, and a revolutionary progress for human beings to improve their understanding and ability by leaps and bounds. Digitalization has disruptive computing capabilities, disruptive cognitive methods, and can accumulate disruptive data foundations. Looking back at Ping An's development history, we have always attached great importance to digital capacity building. As early as 1988, Ping An put forward the idea of digital insurance operations. In 1994, Ping An took the lead in building the first insurance policy system in China, and introduced a wide range of scientific and technological talents from home and abroad. In 1997, Ping An began to implement paperless and information-based office, and the following year realized the most basic regional data management of property insurance. In 2002, the construction of the world's largest Zhangjiang support center began in the same period, focusing thousands of customer services. After two stages, informatization and automation, Ping An's digital transformation has gradually deepened and is rapidly moving towards comprehensive digitalization, which is gradually becoming the "ballast stone" and "leading goose" of Ping An's sustainable development.

As one of the first financial enterprises in China to attach importance to digital research and carry out digital transformation, Ping An has entered the stage of digital 3.0 multi-dimensional cognition, continuously strengthening its core competitiveness and promoting the transformation and upgrading of itself and the industry through three levels: digital operation, digital management and digital operation.

Digital operation, that is, by optimizing complex business service processes, improving efficiency, reducing costs, and optimizing services, such as disintermediation and de-manual through machines, AI and manual assistance; digital management, that is, using scientific and technological means to improve the level of sales management for multiple users and multiple scenarios, prevent business risks, optimize business efficiency, and realize risk identification, collection, underwriting and other judgments in management, processing 150 million transaction data per day, and more than 90% of them can achieve accurate prediction; Through digital operation, the group has saved more than 20 billion yuan in costs, and the comprehensive production capacity will increase by more than 160% in the next few years, and the efficiency improvement results brought by artificial intelligence are very significant.

With high-quality financial services, Ping An has made every effort to do a good job in five major articles

Ping An's business layout and development philosophy closely follow the national strategic direction, and through years of innovation and business practice, it has made certain progress and results.

1. Science and technology finance: polish its own strength and support the science and technology innovation industry

Science and technology are the nation, and science and technology are strong, and the country is strong. Since the 18th National Congress of the Communist Party of China, the importance and necessity of building a "strong country in science and technology" and realizing "self-reliance and self-reliance" in science and technology have become increasingly prominent. Ping An insists on working hard to strengthen its scientific and technological strength, and supports the development of science and technology enterprises with diversified financial products and services.

Scientific and technological innovation has always been the core driving force for safe development. Ping An attaches great importance to the research and development of core technologies, continuously increases investment in science and technology, and forges hard core strength for long-term development. As of the end of September 2023, Ping An has a first-class scientific and technological talent team of more than 3,200 scientists and more than 50,000 patent applications, ranking among the top international financial institutions. Ping An's world-leading basic technologies cover six major areas, including image technology and intelligent voice, and are widely used in multiple comprehensive financial scenarios such as auto insurance loss assessment, bank risk control, and telephone customer service, as well as many medical and health scenarios such as image screening, disease prediction, and intelligent diagnosis, making important contributions to the Group's continuous improvement of core competitiveness.

In terms of financial support for the development of science and technology enterprises, Ping An has relied on its comprehensive financial advantages to effectively support the development of major technological breakthroughs and strategic emerging industries. Ping An Property & Casualty focuses on the development of new productivity and the construction of a modern industrial system, escorting the growth of specialized and special new industries such as chips, aerospace, and artificial intelligence, and at the same time innovatively launching intellectual property insurance, R&D expense loss insurance, cyber security insurance, etc., to support the steady operation of technology enterprises. Ping An Asset Management has invested more than 40 billion yuan in the new generation of infrastructure, semiconductors, new energy vehicles and other industries in the form of debt investment plans. Through the introduction of "commercial bank + investment bank + investment" and other models, Ping An Bank focuses on strengthening its support for advanced manufacturing industry and cultivating science and technology enterprises, so as to provide enterprises with full life cycle financial services. As of the end of September 2023, the balance of Ping An Bank's manufacturing loans was 229.2 billion yuan, an increase of 7.3% from the beginning of the year, 4.4 percentage points higher than the average loan growth rate, and the credit balance of specialized, special and new customers increased by 98.4% from the beginning of the year.

2. Green Finance: Fulfill social responsibilities and adhere to sustainable development

Since the national "dual carbon" strategy was proposed, Ping An has actively integrated ESG concepts into the company's operations and business development, increased support for the green economy, and continued to promote the development of green insurance, credit, investment and other businesses.

Ping An Property & Casualty organically integrates "insurance mechanism + ecological maintenance" and creates the country's first urban mangrove carbon sink index insurance, injecting "financial innovation" support into ecological protection. Based on the actual situation and characteristics of mangrove protection in Shenzhen, the method of "remote sensing + field sampling + quadrat survey" is innovatively used to determine the carbon sink, and the "intangible carbon sink" is "tangible" with scientific pricing, so as to fully protect the ecological benefits and economic value of mangrove carbon sinks.

Ping An Bank has launched a variety of green financial products, and continues to innovate and upgrade products and services to provide comprehensive financial services for green enterprises. With the advantages of digitalization and the Internet of Things, we will give full play to our professional capabilities in green credit business and help achieve high-quality development in clean energy, transition finance and other fields.

In addition, Ping An was the first institution to establish an ESG sustainability strategy and related governance structure. In recent years, the "Sustainable Development Committee" has been upgraded and established to coordinate the promotion of responsible investment, banking and sustainable insurance. As of the end of September 2023, Ping An Green Insurance's original insurance premium income was RMB26.27 billion, the balance of green loans reached RMB136.04 billion, and the scale of green investment in insurance funds reached RMB132.3 billion.

3. Inclusive Finance: Enhance customer experience and practice finance for the people

The report of the 20th National Congress of the Communist Party of China proposed to "let the fruits of modernization benefit all the people more and more fairly". Based on Ping An's original aspiration since its establishment, Ping An has continuously improved the coverage and satisfaction of financial services, and continuously improved its product innovation capabilities and service system construction.

Judging from the data, Ping An Bank's "true inclusiveness, true small and micro enterprises, and true credit" are constantly being implemented. As of the end of September 2023, Ping An Bank has accumulated 1.054 million small and micro enterprise loans with a single credit line of 10 million yuan or less, of which 85% are with a loan amount of less than 1 million yuan, and small and micro business owners and individual industrial and commercial households account for the absolute majority.

For the new citizen group, Ping An has launched a package of financial services. Ping An Property & Casualty has provided exclusive insurance products for a total of 540,000 food delivery riders in 43 regions across the country, and customized "Peace of Mind and Work Accident Insurance" for new flexibly employed citizens such as online ride-hailing drivers, housekeepers and couriers, Ping An Life has innovated an integrated medical solution of "medical expense payment + medical services", and Ping An Pension has provided Huimin Insurance business for more than 50 million insured people.

Lufax Holdings has built a long-term support mechanism for small and micro financing by increasing the risk-taking ratio. As of the end of September 2023, it has served a total of 20 million customers, with a loan balance of more than 360 billion yuan. Relying on blockchain technology, OneConnect has built a financing platform for small and medium-sized enterprises for the Guangdong Provincial Financial Bureau, linking the government, financial institutions and small and medium-sized enterprises, creating a financing ecology for small and medium-sized enterprises, with a total of more than 1,600 financial products accessed, and the amount of financing applied by small and medium-sized enterprises reached 81.6 billion yuan.

At the same time, Ping An actively responded to the rural revitalization strategy and devoted itself to rural revitalization industry assistance, providing a total of 103.2 billion yuan in poverty alleviation and industrial revitalization assistance funds, cultivating more than 80,000 wealthy leaders, and issuing 170,000 rural revitalization cards.

4. Pension finance: explore the medical care ecology and innovate pension products

With the deepening of China's aging population, the implementation of the national strategy of actively responding to the aging of the population, the development of the pension industry and the pension industry have been written into the report of the 20th National Congress of the Communist Party of China.

In the face of the challenges and opportunities brought about by the aging era, Ping An has leveraged its comprehensive financial advantages and medical resource capabilities accumulated over the years to explore the construction of a Chinese version of the "managed care model", creating three innovative models of "insurance + health management", "insurance + home care" and "insurance + high-end pension", and building a multi-level pension financial security system through the innovation of financial products.

Home care is one of Ping An's important directions. This model provides hundreds of services in 10 scenarios of "medical care, food, housing, transportation, finance, health, nursing, entertainment, care and security" for the elderly through the "three-in-one elderly care housekeeper" including intelligent housekeeper, life housekeeper and doctor housekeeper. Through the "1 set of supervision system", it covers all aspects of service commodity management, order fulfillment management, process standard management, result management, and risk management, and comprehensively supervises the service quality and service process. Ping An's home-based elderly care services have covered 54 cities across the country, with a total of more than 70,000 people qualified for home-based elderly care services, and more than 50% of the policyholders in 54 cities have activated their home-based service rights.

While exploring the "home care for the elderly" service model, Ping An also actively participates in the construction of the national "three-pillar elderly care system". On the first pillar, it actively participates in the investment management of the national basic pension insurance fund; on the second pillar, it fully participates in the trustee management, investment management and account management of enterprise annuities, and manages assets exceeding one trillion yuan; on the third pillar, it has launched a number of innovative products in the industry in terms of tax-advantaged personal pension products and non-tax-preferential personal commercial pension financial products.

5. Digital Finance: Empowering the financial industry and promoting digital transformation

Ping An's professional subsidiaries have actively promoted digital transformation, empowered business development with digital finance, and helped all of its main businesses to achieve open source and reduce expenditure, reduce costs and increase efficiency, further consolidate core competitiveness, and maintain market leadership.

Ping An Life continues to explore digital transformation and create a new model of digital life insurance. In terms of digital operation, we have created a "front-end direct, expert concentration, and data-driven" model, and provided customers with one-stop convenient services and experience with the help of automation and intelligent means, with the online level of service operation has reached more than 99%, and the level of insurance and service automation has reached more than 90%, and the level of insurance and service automation has reached more than 90%. Optimize customer digital service experience, improve service efficiency and customer satisfaction.

Ping An Property & Casualty has made breakthroughs in four aspects: reconstructing the technology base, upgrading the system architecture, data governance, and improving AI capabilities, and promoted the customer-centric and comprehensive intelligent transformation of property and casualty insurance. Ping An Property & Casualty's "Property Insurance Business Digital Transformation Project" won the first prize of the 2022 "Fintech Development Award" of the People's Bank of China, and was selected as one of the "10 Major Events of Financial Informatization in 2023" by Financial Electronics magazine. In the field of personal business, we have built an end-to-end customer life-cycle digital operation model of "accurate insight into customer needs and values, accurate matching of people, goods and yards, and automatic generation of strategies" around the people, goods and yard system, and created an AI sound factory to perceive and optimize the user experience, and empower the team to improve the efficiency of operations. In 2023, more than 3 million vehicles will be self-renewed, and the self-service cost will be lower than the overall 10.8PT. In the field of claims, we have built a full-process end-to-end automated claim settlement capability for simple cases, and the machine assists people in complex cases, achieving end-to-end automatic claims settlement for more than 280,000 cases throughout the year, and closing cases in as fast as 4 minutes, creating the ultimate claims service experience for customers. Relying on the Group's technology SNA and other capabilities, it expanded the coverage of risk control and achieved a loss reduction of 2.56 billion yuan.

In addition, Ping An uses digital technology to promote the upgrading of the Group's customer service and build a digital intelligent operation system for remote sales, covering the whole process of customer acquisition, customer screening, marketing and so on. Ping An 95511 Customer Service Center deeply develops digital technology, creates an industry benchmark, and provides efficient and convenient smart services for individual and professional customers with intelligent strategies and human-machine collaboration. In 2023, the 95511 customer service center will continue to upgrade and iterate on AI intelligent customer service, with about 2.22 billion AI agent services, accounting for 82% of the total customer service volume. AI has received a total of 150 million customer calls and consultations, with a problem resolution rate of 93%, a 43% reduction in customer waiting time, and a 21% reduction in interaction rounds.

Having a strong financial institution is one of the key elements in building a financial powerhouse. Ping An will continue to respond to the call of the Party and the state, always adhere to the political and people's nature of financial work, conscientiously implement the spirit of the Central Financial Work Conference, and do a good job in five major articles to serve the national strategy, the real economy and the needs of people's livelihood. Based on ourselves, we will adhere to the core strategy of deepening the two-wheel parallel and technology-driven strategy of "comprehensive finance + medical health", thoroughly implement the people-centered thinking and customer-oriented concept, fully meet the multi-level and diversified financial and insurance and medical and health needs of the people, continuously improve the quality and efficiency of financial services for the real economy, and contribute to the promotion of Chinese-style modernization and national rejuvenation.

(This article was published in the first half of March 2024)