MetLife China: Initiative and innovation bring success

Company premiums rank third, profits second among 28 foreign and JV insurers

Once upon a time, well, to be a little more exact, up to about 25 years ago, China's insurance industry was little more than a twinkle in the country's newly opened-up eyes.

But over the last two decades it has grown rapidly and made greater progress than the industry made in developed countries over more than three times that span of time .

This rapid development is because the government wants the insurance industry to be a pillar force in the country's modern finance system.

And with further financial reform on the cards following the decisions released this year and considerable growth potential to be tapped, as China's insurance industry still ranks only fifth in the world despite its economy being the second-largest in the world - perhaps the largest in the next few years - the industry is set to play an increasingly important role in both the rapidly developing economy and rapidly changing society.

According to a recent report by Ernst and Young, the government expects the country's insurance industry to grow at 17 percent a year over the next seven years, while the life sector's growth rate will exceed 20 percent a year it forecasts.

One of the companies at the forefront of this wave of progress carrying China's insurance industry into the next 25 years is Sino-US United MetLife Insurance Co Ltd (MetLife China), which celebrated its 10th anniversary of doing business in China early this year.

The Chinese investor, State-owned Shanghai United Investment Co Ltd is an investment company with local experience and proven expertise in financial investment in China.

The US partner of the company, MetLife, is one of the world's largest life insurance companies. Founded in 1863, it now provides services to nearly 100 million clients in some 50 countries and regions globally, including more than 80 percent of the Fortune 500 companies.

"We can leverage the global strength, the long heritage and the winning capabilities MetLife has when we do business here in China," said CEO Tan Qiang.

However, the company's success has also been built on its use of both traditional and emerging channels.

The traditional channels are agency, bancassurance and telemarketing.

Through its agency channels, MetLife China offers tailor-made services, including financing and insurance, to individual clients.

"They serve as personal financial planners for our clients," said Tan. Meanwhile, the telemarketing business has contributed to the company's total premiums, making the company rank second, only behind domestic company Ping An Life Insurance Co Ltd among the 70 life insurers in China.

Aside from these traditional channels, the company is also focusing on innovative channels, such as employee benefits and digital platforms.

The employee benefit plans target corporate clients that want to buy health or life protection for their employees as a welfare option, and the company is developing a digital platform, which includes MetLife China's own website and third-party online shopping portals as partners.

With such a sales model, MetLife China stands out among the 28 foreign and joint-venture insurers in the Chinese market, which tends to focus on the agency and bank channels.

Growth plans

MetLife's total premiums rank third among the 28 foreign and joint-venture insurance companies in China, while its profit ranks second, and it currently has facilities in 24 Chinese cities, and that number is expected to be 25 next year.

However, the company's future business growth does not rely on the physical expansion of offices, but rather on virtual representation.

It has already introduced a creative app, MetLife Infinity, which was one of the first designed to capture the user's emotional and important personal content, and it is focusing on online service centers.

In the short term, the company is aiming at a double-digit increase of premiums in 2014, which is "very challenging", Tan said, while its mid-term target for the coming three to five years is to maintain balanced growth of its traditional marketing channels while promoting its employee benefit plans and digital channel.

A more ambitious long-term plan focuses on the digital platform that will link all the company's resources, facilities and existing channels, with customers at the center.

The company's service guideline is "Putting people first" and by taking advantage of big data, the company will be able to provide services tailored to each customer's needs.

"When a customer reaches any terminus of the system, we will know his basic financial situation, shopping preferences and wants," Tan explains.

The digital platform is also expected to drive the business growth of the traditional channels by encouraging initiatives and innovations in strategies, distribution, services and products.

"Insurance is a virtual product, a promise and trust, so we can use modern technology to sell the product and give customers a new shopping experience," he said.

The company's core competitiveness lies in the robust development in those areas where its competitors fail to do well," Tan said.

"We believe that a model with diverse channels will help reduce risks, and after all insurance companies are risk management experts."

MetLife provides different insurance products according to buyers' age, profession and financial situation.

"We have built good business foundation over the past 10 years, and it will be even stronger when the digital channel is ready," Tan said. "We are one of the pioneers and leaders in the field, so it will give us even greater competitiveness."

zhangzhao@chinadaily.com.cn

(China Daily 11/10/2014 page11)