Text丨Du Youyou Editor丨Gray Ash
As the saying goes, "30 years in Hedong, 30 years in Hexi".
32 years ago, AIA took insurance marketing and stepped into Chinese mainland to start business, emphasizing the concept of risk protection and professional management, and there was no echo in the market valley.
After 32 years, the entire life insurance industry is struggling to return to its roots of protection and achieve professional transformation.
In fact, the current professional development has become the consensus of the industry, not because the life insurance market players have just suddenly realized, but today, it has to be done.
Since the 90s, many foreign companies have successively entered the domestic market, and from the very beginning, they have continuously emphasized the "professional" attribute of insurance marketing, but professionalism is only a flash in the pan of that era. Although the professional fire has been preserved in a very small number of foreign-funded joint ventures, more life insurance companies have taken the initiative to invest in the torrent of "extensive operation" of "speed and scale first" from the beginning.
First, there were children's savings products that split the market in the 90s, and then there were bank interest rates that continued to fall, coupled with the shouts of the "sea of people", and the "comparable advantages" formed by insurance products, so that everyone lined up at the headquarters of insurance companies.
Later, to the 2000s, the prosperity of investment-linked investment, as well as the development of bancassurance under the innovation of investment-oriented products and the prosperity of the capital market, and then to the "asset-driven liability" with short and medium duration products as the carrier, the rise of platform companies, as well as the speculation and suspension of 4.025% annuity products in recent years, and the value bancassurance under the 3.5% increase in whole life products...
The question of "speed to scale, or professionalism to efficiency" runs through the entire process of insurance development, and "opening the market" behind keywords such as "speed", "scale" and "volume" has been the main theme of the development of the life insurance industry for so many years. Over the past 30 years, the "lead singer" has changed, the "scale" tone has not changed, and singing "professional" is a very "outrageous" thing.
But as the saying goes, "success is also Xiao He, defeat is also Xiao He". The strategic logic of expanding the industry in the past is now increasingly seen as a taboo - scale, with less emphasis, and professionalism is beginning to be written into the strategic planning of companies.
Professional seeds were planted 30 years ago, but they have not been able to take root and flourish, why?
Why couldn't the "professional" lead the development of the industry in the 90s? Why is the "professional" style still struggling today? Why can't the one who sells the guarantee do the scale?
Let's take a look at the past and present life of "professionalism", get thinking, get inspiration, and gain insight into the inevitability of the development of the life insurance industry——
1 Guarantee and professionalism in mature markets, why did the ship capsize in new markets?
AIA is the first company in Chinese mainland to create professional personalities for agents from the inside out.
"Behaved appropriately and dressed professionally" was the requirement of a British-Chinese training leader in the early years of AIA China. Wearing a suit and tie and working at the Portman Hotel became a kind of "exposure" of AIA's agent profession at that time.
AIA's profession not only has face, but also has lining.
The 20 or 30 agents initially recruited by AIA in Shanghai were almost all university students, plus the company's advanced international training system and experience brought from Hong Kong, as well as the risk management concept and marketing skills that could be described as "next-generation" for the mainland at that time.
In AIA's own words at the time, it was "to develop a set of well-designed training objectives and selection criteria, and to provide all-round and uninterrupted training for agents with the help of perfect teaching facilities and well-arranged courses".
According to public data, in 1996, a total of 369 people from AIA Shanghai took the LOMA exam, and many of them obtained the title of life insurance manager, including the first life insurance manager in China recognized by international industry organizations.
If you put it today, it is not an exaggeration to say that it is "authentic Qingbei resumption of undergraduate + system-wide foreign investment training".
But the truth is always so far from what is expected. What kind of "risk protection" is chattering about, and as for "birth, old age, sickness and death", it touches the mold of consumers.
For the agents themselves, it seems that it is difficult for the profession to give them confidence. In contrast to the glamorous appearance, it is not a decent salary, but an unstable income. In today's terms, the professional agent of that era was "exquisite and poor". In the eyes of the public, these glamorous AIA agents are essentially no different from Shroff, Mr. Runner.
Although it was very difficult for AIA to develop the market, before 1996, the basic law of its commission system was still an "advanced production relationship" in the individual business market compared with the "dead salary" of state-owned insurance companies at that time.
According to one data, 770,000 individual policies were sold in Shanghai in 1995, of which about 91% came from AIA.
However, with the entry of Ping An of China, CPIC Life Insurance and China Insurance Life Insurance, which was reformed from the elderly insurance body, things are quietly changing.
According to historical data, the market share of AIA Shanghai's premium income was about 23% in 1995, about 13% in 1996, and 8% in 1997, and the market share shrank by two-thirds in two years.
Market competition can be described as "offensive and defensive".
Whether subjectively willing to admit it or not, the objectively shrinking market share, compared with the roaring performance of Chinese companies, seems to indicate the failure of the original path of "security" and "professionalism" in advanced economies.
2 There is nothing wrong with emphasizing risk protection, but foreign-funded companies look too far and lose the present
For sales, professionalism is a means to obtain customer recognition, if the profession can not be recognized by customers, then professionalism itself has become a shackle, just like the dilemma faced by many foreign companies such as AIA in the past.
The reason is simple: at that time, and for many years afterward, the "security first" strategy advocated by foreign companies could not find an entry point in the mainland market.
The so-called protection products are mostly "no return on principal", "no cash value" and "consumption-based" products.
From the perspective of insurance companies, the benefits of such products are twofold: one is that they can make money, and the other is that they can avoid the risk of interest rate loss.
For the former, these protection products can earn a "death difference" for the company and obtain considerable profits. It is the importance of profits that foreign companies are willing to cater to local consumers only on the premise of ensuring profit margins, which is a "common problem" of foreign companies in the 90s and even 00s.
For the latter, deposit interest rates were high in the 90s, and in the eyes of foreign companies, insurance products, as long-term products, faced with interest rates as high as 10%, it was only a matter of time before the spread was lost. After all, there was a lesson from 1991-1995 when the Bank of Japan lowered its benchmark interest rate from 6% to 0.5%, and then a large number of insurance companies collapsed. Even if you want to make a wealth management product, you should wait for the market interest rate to fall before you start it, and it is definitely not in a period of high interest rates.
From the consumer's point of view, buying a guaranteed product is spending money and seemingly "getting nothing".
After all, unless these products are out of insurance, they will hardly bring "tangible returns" to consumers, and only give consumers a "sense of security" of insurance protection.
However, it is difficult for mainland consumers to resonate with this "sense of security". Consumers believe that there should be a "return" for the money spent.
It's not just that consumers in the 90s and even the 00s weren't interested in "consumer" products, but even today's consumers are babbling a lot about "consumer" products. Although consumers are no longer so taboo about birth, old age, sickness and death, and insurance companies have opened up some markets from the incision of "death coverage mortgage", the space for protection products is still very small.
This is not only the result of insufficient insurance education, but also the inertia of traditional culture and consumption customs. Due to too much experience and too far ahead, foreign-funded companies have failed to meet the needs of consumers to get "visible returns" quickly, and "not adapting to the water and soil" have lost in the "present".
3 The development of Chinese companies has cater to the needs of customers, making insurance a deposit substitute and an investable product
Unlike foreign-funded companies such as AIA, which use the concept of security to open up the market, the demands of Chinese companies represented by Ping An to customers can be said to have risen to the highest version of "customer-centric" - "doting".
Whatever the customer wants, the Chinese company will give.
So the question is, what do consumers want?
The last thing customers want to hear is words such as "accident", "sudden death" and "disease". But customers are interested in topics such as "yield". For mainland consumers, saving is the best, if not the only, way to deal with risk.
Whether from a cultural point of view or from today's statistics, it is an "axiom" that Chinese and even Chinese love to save. In this way, the birth of savings products is also destined.
Although mainland consumers are reluctant to talk about birth, old age, sickness and death – in the words of professional agents, they are unwilling to face up to the risks – but they are honest and saver like crazy. Yes, savings have been the main means for mainland residents to cope with risks for thousands of years, either by stockpiling grain or money.
Although interest rates were high in the 90s, savings insurance products were not loved by consumers at first, and simply put, bank deposit rates were higher. However, things began to change as the central bank continued to cut bank interest rates, and insurance products began to gain popularity.
At that time, the supervision was not as perfect as it is today, and the interest rate of the bank went down, but the insurance company was reluctant to lower the pricing interest rate of the product, and for a time the insurance product became a sweet spot in the market.
Even every time a bank lowers an interest rate, residents in big cities line up in front of the insurance company's headquarters for fear that the insurance company will lower the fixed interest rate at any time. At that time, some agents also made a fortune, which can be described as the ancestor of "speculation and stop selling".
It can be seen that in the eyes of consumers, insurance products are a substitute for bank deposits. This substitution effect has lasted almost until now, but from bank deposits to bank wealth management products, and then to large-amount certificates of deposit...
Coupled with the rise of the securities market in the 90s and the booming economy of the mainland, consumers are full of optimism. People don't just love to save, they love to invest.
One after another new products such as investment-linked insurance and universal insurance are mixed with waves of the A-share bull market, reinforcing consumers' impression of "investment" in life insurance over and over again.
4 The real big thing is still the crowd tactics, which ultimately makes the "professional" have no way out
Although Chinese companies represented by Ping An have more "down-to-earth" insights into consumers, relying solely on products is not only difficult to compete with foreign companies, but even the products themselves are difficult to say that they sell well.
After Ping An entered the life insurance market, it initially launched three savings products, namely "Ping An Longevity Whole Life Insurance", "Love Lifetime Pension Insurance" and "Children's Lifetime Happiness Insurance". However, the "income" that these three products can bring is not enough compared with the bank's deposit interest rate of up to 10% at that time, and the sales are not good.
However, in that era when entrepreneurs loved to use the "art of war", Ping An quickly found the "killer feature" - crowd tactics. From a strict definition, crowd tactics refer to the use of large-scale forces to achieve offensive superiority when equipment is at a disadvantage.
Women between the ages of 30 and 40 have become the main force of crowd tactics. This basic agent portrait has continued to this day, and is still considered the basis of a high-quality "tabula rasa", that is, Bao Ma, Dachang wife and other people.
Soon, crowd tactics became a common way of playing for many Chinese-funded companies. The effect made AIA and other foreigners speechless.
Ping An entered the life insurance market in 1994 and implemented the first individual life insurance marketing system for a Chinese-funded company, and then landed in the Shanghai market.
In 1995, CPIC Life also made strategic adjustments to its life insurance business and implemented a pilot reform of the commission-based marketing system.
After the "Shanghai Conference" in mid-1996, China Insurance Life Insurance, which was reformed from the Chinese People's Insurance System, began to get involved in the individual insurance business, and recruited 60,000 marketers in just half a year.
As we all know, crowd tactics have become the driving force behind the development of life insurance in the past 30 years. At its peak, in some prefecture-level cities in southern Jiangsu, there were even more than 5,000 agents under the command of the branch company, so that the manpower could basically top a joint venture company...
Looking at the insurance foreigners, I wanted to use the professional sales model to achieve dimensionality reduction, but I fell a big step as soon as I entered the door.
Unlike those who encourage agents to walk the streets, some foreign companies warn their agents not to come to the door without making an appointment, and tell the agent that making an appointment in advance is a sign of respect for the customer.
However, in the nascent stage of the market, the ideal of maintaining professionalism and maintaining decency is still a mistake after all.
As the saying goes, if you look too far, even if you look right, it is wrong. The long-term strategy, even if it is in the right direction, is difficult to implement because it is not compatible with the current market.
The strict requirements of foreign-funded companies for agents restrict the "play" of some people, and in addition, the situation of agents of Chinese-funded companies pretending to be agents of foreign-funded companies to obtain customer information has occurred frequently, and even many agents of foreign-funded companies have jumped to Chinese-funded companies when they see that the agents of Chinese-funded companies have made a fortune by "speculating and suspending sales" by relying on the drop in interest rates. This makes insurance foreigners completely nowhere to go.
Since then, the professional team has completely become an industry myth.
5 "Professional" lost the first half, but has already begun to win the second half
Professionalism is a delicate job.
In the early days of the market, it is not the time to play this kind of "trickle of water".
For insurance companies at that time, whether it was professional or protection products, it was not the most important thing, because what to do depended on the face of the market.
As Reid Hoffman writes in his book Blitzkrieg.
Speed is key, and efficiency will come later. If you win, efficiency doesn't matter. If you lose, efficiency is even less important.
Foreign companies' emphasis on profits and worries about interest rate losses, as well as the business model of "Xu Rulin", doomed them to not win the first half.
In the early stage of the market, especially in the period of historical opportunity of rapid economic growth, rapid expansion is the right strategy. Therefore, we cannot deny the "extensive development" of the previous years, which is an inevitable product of a specific historical stage.
Many things, although necessary, may not be appropriate for a company to do at that time. For example, although consumer education is very important, for the special commodity of insurance, if the consumer is not in your hands, you go to do consumer education, which is tantamount to making a wedding dress for others.
But as the market matures and the original strategy fails, the importance of professionalism and assurance begins to show. Not asking for much wide, but seeking peace of mind, has become the "prayer" of some insurance companies.
Although in the past, he did not catch the fast train of crowd tactics to expand rapidly, but today there is no historical baggage, and it is enough to rejoice.
Some foreign-funded companies are also fortunate to set up the framework of professional agents early, and then seize the unavoidable penetration opportunity of long-term medical insurance, which is mainly based on critical illness insurance, to win room for the reform and efficiency of the team, and the accumulation of a large number of long-term health insurance business has contributed huge value to them.
However, although the profession is now being held to an extremely high level by the industry, it is not forgotten that the term "professional" may be more effective for a mature market.
Is China's insurance market a mature one?