Recently, Chinese Life Insurance Co., Ltd. (hereinafter referred to as "Chinese Life") announced its first quarter 2024 results report.
According to the report, in the first quarter of this year, Chinese Life achieved a total premium of 337.638 billion yuan, a year-on-year increase of 3.2%. In terms of premium breakdown, renewal premiums amounted to RMB225.194 billion, representing a year-on-year increase of 7.5%. New policy premiums were RMB112,444 million, and first-year premiums were RMB74,825 million, up 4.7% year-on-year, of which first-year premiums for ten-year terms and above were RMB25,191 million, up 25.4% year-on-year. The short-term insurance premium was RMB34.804 billion. The surrender rate was 0.26%, down 0.14 percentage points year-on-year.
It is worth mentioning that the growth of China Life in the first quarter of this year was achieved on the basis of a high base in the same period of 2023, and it also became the A-share listed insurance company with the highest growth rate with a growth rate of 3.2%, which is not easy.
In terms of core data, China Life also gave us a lot of surprises, including the continuous improvement of the quality of the policy and the continuous optimization of the quality of the agent team.
Previously, when we analyzed China Life's annual report, we mentioned that as the head goose of the domestic insurance industry, China Life's performance in 2023 is very likely to indicate that the whole industry is expected to get rid of a relatively sluggish state in the past few years and usher in a new upward cycle, and China Life's latest quarterly report continues to confirm our judgment.
1
New business value achieved the highest growth rate in recent years, policy structure was optimized, and China Life's recovery was "ongoing"
As one of the core data of insurance companies, China Life's new business value in the first quarter of this year achieved the highest growth rate in recent years, with an increase of 26.3% compared with the new business value after the reset in the first quarter of 2023, setting a new high in recent years.
In response to the rapid growth of new business value, Hou Jin, chief actuary of Chinese Life, said at the results conference that the company's new business value rate increased in the first quarter mainly due to three reasons - structural optimization, cost reduction and efficiency improvement, and active interest rate cost reduction.
Specifically, in terms of business structure optimization. Hou Jin said that in the first quarter, the proportion of the company's first-year premium payment of 10 years and above reached 33.67%, which was an increase from last year.
Secondly, the company actively practices the "integration of newspapers and banks" in the bancassurance channel. Hou Jin said that the company took the initiative to reduce costs and increase efficiency in related fields, which played a great role in the improvement of business value rate in the first quarter.
Finally, we should actively optimize the pricing interest rate and product structure. Hou Jin said that since the second half of 2023, the company has made a layout in the corresponding direction, which has played a great positive role in the improvement of the value rate of new business.
Among these three points, we pay special attention to the proportion of first-year premiums paid by China Life in the first quarter of 10 years and above. At a time when the insurance industry emphasizes "long-termism", the "quality" of insurance policies has gradually become one of the important indicators for the market to judge the future development of insurance companies. In the first quarterly report, the first-year premium of Chinese life with a term of 10 years or more accounted for 33.67% of the premium paid, indicating that the overall policy structure of China Life has been significantly optimized and the quality of insurance business has improved, which is also the result of China Life's continuous practice of long-termism.
2
Ask the transformation to be motivated: the quality of agents is significantly optimized, and the head goose of life insurance dedicates a "transformation plan" to the industry
According to the data of the first quarterly report, by the end of the reporting period, the sales force of China Life's individual insurance was 622,000, which was basically the same as that at the end of the previous year. For China Life, the individual insurance sector is the basic plate of premiums, and if the individual insurance sales force declines rapidly for a long time, there will also be hidden dangers on the premium side.
However, judging from the latest data of the first quarterly report, we can basically judge that the agent team of China Life has stabilized. At the same time, from the perspective of core data, the quality of the China Life team has improved significantly, the number and proportion of high-performing people have continued to increase, and the monthly per capita first-year premium of the individual insurance sector has increased by 17.7% year-on-year, and the team's production capacity has continued to grow on the basis of a high base.
When we look back on the transformation of the agent team in the past few years, we have the taste of "bitter and sweet".
In the past 30 years, the "pyramid" type of insurance agent team has opened up the situation for the development of the life insurance industry, and the agent channel has become an important support for the premium income of major life insurance companies, but with the development of the market, the limitations of this system have become increasingly prominent, and the crowd tactics have obviously no longer suitable for the current Chinese insurance industry. Since the scale of industry agents hit a high of 9.12 million in 2019, it has entered a downward channel, and the team size has declined very quickly. The life insurance industry has moved away from the "scale expansion cycle" that relies solely on manpower expansion, and has begun to enter the "efficiency improvement cycle" that relies on the capacity improvement of agents.
Therefore, since entering the third decade of the 21st century, the transformation of agent channels has gradually become the consensus of the industry.
In which direction is the transformation going?
If there is a roadblock, there must be a pioneer who takes the initiative to "clear the stone" and kick the road out, as the head goose of domestic life insurance, China Life is the important pioneer. In the past few years, China Life has answered in detail the two important questions of "what is the direction of agent transformation and how to better promote the transformation of the team" through various agent transformation plans.
Let's start with the direction of team transformation. With the continuous development of the domestic economy and the continuous improvement of people's awareness of insurance, consumers' demand for insurance is not only limited to an accident insurance or a medical insurance, they hope to achieve risk isolation in the whole life cycle process through reasonable insurance allocation, and at the same time, in the past two years, more and more consumers have also allocated family assets through insurance, and insurance has begun to become an important wealth management tool for every family.
In such a situation, the market is bound to put forward a higher demand for insurance agents, that is, the ability of insurance agents to match the increasing insurance needs of the public. Then we can gradually obtain the ability portrait of insurance agents required by the current industry, that is, we need to have professional insurance knowledge, be able to formulate reasonable insurance product planning for users, and also need to have strong comprehensive financial knowledge and wealth management capabilities, which can help users allocate family assets.
In fact, this is also highly consistent with the details of the "Individual Insurance Agent Sales Ability Qualification Grade Standard (Life Insurance Direction) (Discussion Draft)" issued by the Insurance Industry Association last year.
This means that the current agent transformation has a strong market demand and strong support from the policy side.
In recent years, China Life has been insisting on the in-depth transformation of the agent side. These include, in the first half of 2021, we will develop and promote the normal operation of the individual insurance team 4.0 system to promote the professional and professional transformation of the sales team, in the first half of 2022, we will launch the "Zhongxin Plan" project and upgrade the management of the sales team, focusing on newcomers, supervisors and high-performing groups, and in the first half of 2023, we will focus on the "sales channel strengthening project" and promote the reform of the individual insurance marketing system through the professional upgrading of the existing team and the exploration of new marketing models.
With unremitting efforts, judging from the financial report data of the past period, the quality of China Life's agent team has indeed improved significantly.
It is worth mentioning that in March this year, China Life officially released a new layout of marketing reform - "Seed Plan", and launched the pilot work of joining the financial and insurance planner team.
At present, it has carried out pilot projects in more than 10 cities such as Shenzhen, Nanjing, Guangzhou, Chengdu and other cities to recruit financial and insurance planners.
Obviously, China Life's "quality improvement" work for agents is about to start to accelerate again!
With the direction of agent transformation clear, the question comes how to support agents to carry out more effective and in-depth reforms.
What to do to support the agent transformation?
In this question, the answer given by China Life is based on "'product + service' ecological construction" and "precise empowerment of science and technology".
That is, to give agents better products and tools, and stronger scientific and technological support to bring users a better "insurance experience".
On the product side, China Life's insurance product supply adheres to the "people-centered", actively serves the national strategy, protects people's livelihood, continuously strengthens the supply of diversified products and services, deepens the linkage of asset and liability management, continuously strengthens the basic research of product supply, and improves the high-quality supply capacity of insurance products. According to the data, in 2023, the company will develop and upgrade 196 new products, providing sufficient product support for agents to develop their businesses, and at the same time fully protecting consumers' right to choose.
On the service side, China Life brings a better experience to agents and consumers through continuous progress in technology. For example, on the agent side, China Life has launched cloud applications such as cloud desktop, cloud assistant, cloud video, and China Life e-store to achieve efficient collaboration in multiple scenarios, and comprehensively empower marketing personnel to sell and develop their businesses, and employees to work smartly. On the insurance side, Chinese Life continues to strengthen internal and external data connections, greatly accelerating the efficiency of insurance application, data shows that in 2023, the paperless insurance rate of Chinese Life's individual long-term insurance has reached 99.99%, the intelligent underwriting review rate has reached 94.98%, and the underwriting time of personal business has been accelerated to 0.13 days.
On the consumer side, we take the claims process as an example, through the empowerment of technology, Chinese Life has continued to increase digital transformation in recent years, optimize the claims process, improve service efficiency, and let users feel the "speed of China Life". According to the 2023 claims report previously released by China Life, the three major technology projects it focuses on promoting are the whole process of manual claims, direct payment of claims, and electronic invoice claims.
Since 2023, the pilot provinces of the project have exceeded 35%, the manual operation time has been shortened by more than 90%, and the proportion of automatic claims in the pilot areas is 5%-15%; the number of direct payment claims has exceeded 7.27 million last year, with a compensation amount of nearly 5 billion yuan, and the fastest claim has been settled in seconds; It is applied in the claim settlement link to realize the transformation of electronic bills into data, and the claim service has also changed from passive to active. In 2023, the number of electronic invoice claims will be nearly 5.08 million, with a compensation amount of more than 5.3 billion yuan and a compensation time limit of 0.30 days, while at the same time, the electronic invoice will remind the number of claims to be reported for 567,000 cases, with a compensation amount of more than 600 million yuan and a compensation time limit of 0.14 days.
The better "business experience" of agents and the faster and warmer "claims experience" of consumers are all supported by the "scientific and technological power" of China Life.
With a clear direction of transformation, firm policy and scientific and technological support, we believe that China Life's agent team will go further in the right direction, and the giant ship of China Life will also go further!