Summary of Q & A of 2022 Interim Results Announcement
（August 2022, Shanghai）
1. Q: China’s insurance market is now undergoing profound transformation. What is management view on the medium- and long-term outlook for the sector? What strategies do you have? How do you plan to foster new growth engines?
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Second, it takes time to cultivate new growth drivers. The restructuring of life insurance agency force is gaining traction, but improvement in professionalism and career-based development cannot be achieved overnight, as they require steadfast capacity-building in recruitment, training and an enabling culture. In P/C insurance, in the context of auto insurance reform, the profitability of traditional business lines was under pressure. Besides, the launch of specialised terms and clauses for NEV, and innovation in non-auto insurance could be challenges to business quality, since it takes time to understand the risks and accumulate data. Global warming and higher risk of natural catastrophes may severely impact the underwriting profitability of P/C insurers.
Third, external shocks are increasing. With economic slow-down, loosening of monetary policy, decline of long-term interest rates and capital market volatility, we are facing more pressure in reinvestment, which, coupled with rising credit risk, could be a constraint for insurance business. Moreover, new regulatory rules such as Administrative Provisions on Supervision of Insurance Groups and C-ROSS II require better risk management of insurance companies.
That being said, the fundamentals of China’s economy remain unchanged. As a matter of fact, the unique value proposition of insurance
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will figure more prominently in an environment of increasing uncertainty, such as providing risk protection, supporting economic growth and promoting social stability. For example, the pandemic considerably raised public awareness of health insurance and services; the volatility of equity market makes savings-type insurance products more popular. In the long term, demographic shift and accumulation of people’s wealth can effectively underpin insurance demand. National strategies seeking to meet people’s need for a better life, such as Healthy China, Green Transitioning and integrated development initiatives of key regions will inject new vitality into China’s insurance market. According to reports by authoritative market research outfits, China’s protection gap is still huge in medical cost reimbursement, critical illness income compensation, as well as wealth management and retirement products and services, which means there is still big potential in China’s insurance penetration and density.
In short, customer demand remains intact; it’s only that insurance companies need to improve their supply to match changing customer needs. In the face of a changing environment, CPIC took the initiative and initiated the supply-side reform to drive for a shift towards the customer-centric operational model.
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We launched the Changhang Transformation on the life insurance side seeking to restructure the agency force and meet customer needs in health
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tourism, with the occupancy rate trending up. In terms of operation, customer satisfaction rate exceeded 80%, and we are working on the formulation and improvement of operational standards. As for synergy with the core business of insurance, in the first half of 2022, we received a total of around 40,000 visits, and issued more than 2,700 certificates of admission. Next, we will focus on two things: one is operation and service, diversifying offerings and enhancing standards to further improve customer satisfaction; another priority is the building of professional, chain-based operational management capabilities so as to expand into light-asset business.
Our competitive edge in elderly care mainly includes: first, we offer long-term pension insurance with stable yields; second, we have been profoundly involved in all the 3 pillars of the pension system; third, and most importantly, through elderly care, pension insurance and pension-related financial services, we can provide a full chain of solutions covering the entire life-cycle of our customers.
Health care is one of the 3 priorities of the 14th 5-year Development Programme of CPIC Group. We’ve made continuous effort in the implementation of the health care strategy, and have achieved some
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China Pacific Insurance (Group) Co. Ltd. published this content on 22 September 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 22 September 2022 09:59:15 UTC.
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