Anbang Insurance Group (Anbang), a Beijing-based insurance giant with total assets of around 1.97 trillion RMB (US$291.3 billion), has identified innovation in the area of asset management as one of the key factors in driving long-term growth for Mainland insurers.
Speaking at the 3rd Beijing Insurance Forum, Wu Xiaohui, chairman and CEO of Anbang, highlighted asset management to be one of the areas in need of innovation for local insurers: “The innovation in asset management would not only help meet current needs in the healthcare, senior-care, and education sectors, but also facilitate reforms in the financing structures, operation management and corporate governance of listed companies. Investment and financing structures can leverage on assets within the insurance sector, which will provide capital support for start-ups, SMEs (small- and mid-sized enterprises) and infrastructure. This is of high importance to China.”
Mr. Wu elaborates that there still exists a huge gap between the demand and supply of insurance products in the country, and that insurance companies should strive to create “low-cost, high efficiency and more responsive” products in order to create a mutually beneficial situation for the customers and insurers. He cites the company’s acquisition of Dutch insurer VIVAT (with assets worth 500 billion RMB) in 2015, as an example of innovation at work: “It only took us less than a year to turn VIVAT from a loss-making company into a profitable one, which delivered a record profit of 4.3 billion RMB in the first half of 2016. VIVAT adopted Anbang’s customer-centric philosophy and implemented a comprehensive budget system to improve operational efficiency.”
As another example of product innovation, Mr. Wu described the success of its recently acquired company, Korean insurer Tong Yang Life Insurance, in doubling its 2016 profits and increasing customer satisfaction despite the current low interest rate environment. “These results reflect the know-how and management skills of Chinese enterprises,” he shared.
Tong Yang Life also recently issued a loan facility to a Chinese company in Shandong; an eastern province of China. Mr. Wu says the move proves that global asset allocation can support the development of Chinese companies as well as the Chinese economy: “Anbang’s overseas affiliates can facilitate the growth of domestic SMEs with loans.”
Mr. Wu also singled out “innovation of insurance products” and “innovation of operations” as other key points to ponder for the industry.
From Asia Asset Management