building a great life insurance industry in china
Download
Skip this Video
Download Presentation
Building a great life insurance industry in China

Loading in 2 Seconds...

play fullscreen
1 / 34

Building a great life insurance industry in China - PowerPoint PPT Presentation


  • 134 Views
  • Uploaded on

Building a great life insurance industry in China. CIRC China life insurance summit. November 11, 2010 Shenzhen. CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of McKinsey & Company is strictly prohibited. 2005. 2009. 2010.

loader
I am the owner, or an agent authorized to act on behalf of the owner, of the copyrighted work described.
capcha
Download Presentation

PowerPoint Slideshow about ' Building a great life insurance industry in China' - aquila-mendoza


An Image/Link below is provided (as is) to download presentation

Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author.While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server.


- - - - - - - - - - - - - - - - - - - - - - - - - - E N D - - - - - - - - - - - - - - - - - - - - - - - - - -
Presentation Transcript
building a great life insurance industry in china

Building a great life insurance industry in China

CIRC China life insurance summit

November 11, 2010

Shenzhen

CONFIDENTIAL AND PROPRIETARY

Any use of this material without specific permission of McKinsey & Company is strictly prohibited

slide2

2005

  • 2009
  • 2010
  • First edition promotes the importance of a vibrant Life industry in China
slide3

2005

  • 2009
  • 2010
  • Second edition press release argues for sustainable long-term industry development
slide4

2005

  • 2009
  • 2010
  • Last year’s summit highlights
    • Potential of life products to increase peace of mind, lower savings rates, and stimulate GDP
    • Levers promoting LTSP penetration
      • Consumer education
      • Tax incentives
      • Next generation bancassurance
      • Product channel innovation
      • Quality agency force
slide5

2005

  • 2009
  • 2010
  • Summarize importance of life insurance to China
  • Reflect on where Life Industry is in its journey
  • Offer ideas on role of industry, regulator, and government in accelerating growth
slide6

2005

  • 2009
  • 2010
  • Summarize importance of life insurance to China
  • Reflect on where Life Industry is in its journey
  • Offer ideas on role of industry, regulator, and government in accelerating growth
1 importance of life industry to china
1. Importance of life industry to China
  • Promote peace of mind and social harmony while government builds social safety net
  • Promote financial strength of emerging mass affluent market
  • Accelerate development of health and retirement markets as country ages
  • Contribute to lower savings rate and higher consumption to stimulate GDP growth
  • Generate long-term capital to fund infrastructure
slide8

2005

  • 2009
  • 2010
  • Summarize importance of life insurance to China
  • Reflect on where Life Industry is in its journey
  • Offer ideas on role of industry, regulator, and government in accelerating growth
2 where is china life industry in its journey
2. Where is China life industry in its journey?

Industry

Products

Customer focus

Channels

Economicfocus

industry

13

Industry

Future rapid market growth in coming 5-10 years

Life insurance penetration, 2008

Premium percentage in GDP,%

“Semi-mature” market

Taiwan

HK

Korea

“Start-up” market

Japan

Singapore

Philippine

China (2015)

India

Malaysia

China

“Mature” market

Thailand

Indonesia

GDP per capita

$ 1,000

SOURCE: Swiss Reinsurance, Sigma: World Insurance 2007; team analysis

products
Products

Stage 1

Stage 2

Stage 3

  • Basic protection (life, accident)
  • Basic savings – fixed income
  • Indemnity health
  • Mass market
products1
Products

Stage 1

Stage 2

Stage 3

  • Sophisticated life products – UL, endowment, second to die
  • Savings products with variable components
  • Corporate life, pension and health
  • Basic retirement products
  • Mass and mass-affluent products
products2
Products

Stage 1

Stage 2

Stage 3

  • Sophisticated fixed and variable annuities
  • Medical reimbursement
  • Individual and group disability
  • Wide range of investment vehicles and guarantees for corporate pensions
  • Long-term care
channels
Channels

Stage 1

Stage 2

Stage 3

Agency/Broker

Large, mass, high-churn, sell family and friends

channels1
Channels

Stage 1

Stage 2

Stage 3

Agency/Broker

Disciplined best- practices model with focused centralized servicing and technical support

channels2
Channels

Stage 1

Stage 2

Stage 3

Agency/Broker

  • Top agents exit to create broker and financial advisor firms
  • Practice models for mass affluent offering financial planning, asset management
channels3
Channels

Stage 1

Stage 2

Stage 3

Bancassurance

Low-value-added commodity products

channels4
Channels

Stage 1

Stage 2

Stage 3

Bancassurance

Insurer provides value-added sales and marketing

channels5
Channels

Stage 1

Stage 2

Stage 3

Bancassurance

Financial partnership and bundled products

channels6
Channels
  • Other channels
    • Corporate
    • Affinity
    • Internet
economic focus
Economic Focus

Volume Economic contribution

  • Stage 1
economic focus1
Economic Focus

Volume Economic contribution

  • Stage 2
economic focus2
Economic Focus

Volume Economic contribution

  • Stage 3
customer focus
Customer Focus

Stage 1

Stage 2

Stage 3

All about the policy

customer focus1
Customer Focus

Stage 1

Stage 2

Stage 3

More explicit management of renewals frequently leveraging centralized support

customer focus2
Customer Focus

Stage 1

Stage 2

Stage 3

Integrated customer management leveraging customer databases, product initiatives over life stages, cross-selling

2 where is china life industry in its journey1
2. Where is China life industry in its journey?

Industry

Products

Customer focus

Channels

Economicfocus

slide28

2005

  • 2009
  • 2010
  • Summarize importance of life insurance to China
  • Reflect on where Life Industry is in its journey
  • Offer ideas on role of industry, regulator, and government in accelerating growth
3 accelerating industry development companies
3. Accelerating industry development – companies
  • Strengthen foundational pillars
    • Financial disciplines
    • Performance management
    • Talent
  • Channels
    • More disciplined value-added models
    • Broaden and experiment
    • Differentiated geographic and customer segment models
  • Product management disciplines – design, pricing, risk, economics
  • Corporate strategy – focus resources on core
3 accelerating industry development regulator
3. Accelerating industry development – regulator
  • Protect solvency – trust-based business
  • Encourage innovation in products and channels
  • Continue to broaden investment options with controls
  • Raise producer quality standards for more sophisticated products
  • Encourage/reward foreigners for innovative models
  • Incent sale for LTSP
  • Encourage market research on consumer attitudes and behaviors
3 accelerating industry development market research initiative
3. Accelerating industry development – market research initiative
  • Major market research effort to develop fact-based understanding of
    • Drivers of consumer savings behavior
    • Customer insurance purchase triggers and experience
    • Customer attitudes toward risks, advisors, and financial institutions
    • Linkages between insurance and savings
  • Approach
    • In-depth qualitative interviews to understand attitudes and behaviors
    • Survey of approximately 4,000 consumers
    • Understand differences by socioeconomic and geographic segments
    • Synthesis to determine key drivers of insurance purchase and industry implications
3 accelerating industry development government
3. Accelerating industry development – government
  • Build awareness on link between
    • Public and private sector protection programs
    • Link between insurance and savings rates
  • Explore tax incentives where impact on purchase rates is high
  • Explore broadly based education initiative on risk, insurance products, and personal finances
slide33

2005

  • 2009
  • 2010
  • Summarize importance of life insurance to China
  • Reflect on where Life Industry is in its journey
  • Offer ideas on role of industry, regulator, and government in accelerating growth
future of china life insurance industry

`

Government looking to private sector for safety net

High GDP growth

Mass affluent market growing

Aging population

Healthy balance sheets

Early stage of

development

Future of China life insurance industry
ad