Round Table 2: Breakthrough and Mutual Empowerment of Banking and Insurance Channels
Abstract: To win the day and look for the fragrance of Surabaya, the boundless scene is new for a while, and you can know the east wind when you are idle, and it is always spring when you are colorful.
On January 15th, 2019, the 9th China Financial Innovation and Development Forum in 2018 and the "Golden Awards Ceremony" jointly sponsored by Financial Management magazine, eBay Media and Beijing Rural Commercial Bank ended successfully in Beijing.
At the conference, under the auspices of Wan Jin, general manager of China Life Insurance Co., Ltd. Banking Insurance Center, a round-table forum discussion was held with the theme of "Breakthrough and Mutual Empowerment of Banking Insurance Channels". The guests who participated in the discussion were Jiang Chang, Senior Commissioner of Banking Insurance Cooperation Department of Agricultural Bank of China, Zhao Feng, General Manager of Wealth Management Department and Personal Finance Department of Bohai Bank, Wei Aichen, General Manager of Banking Insurance Headquarters of Everbright Life Insurance Co., Ltd., and Jiang Jing, Assistant General Manager of Xinhua Endowment Insurance Co., Ltd.
When sharing the specific situation of the development of bancassurance of various companies, Jiang Chang, senior Commissioner of the bancassurance cooperation department of the institutional business department of Agricultural Bank of China, pointed out that the new value of bancassurance business from the perspective of banks is reflected in three aspects: first, the function is indispensable; The second is that the benefits are outstanding and not easy to ignore; The third is that the comprehensive value potential is huge.
Zhao Feng, general manager of wealth management department and personal finance department of Bohai Bank, said that he always emphasized one point about the bancassurance business, that is, Bohai Bank does not advocate selling insurance separately, but regards insurance business as an indispensable part of comprehensive financial services for customers and a necessary link in the financial management process.
Wei Aichen, general manager of the bancassurance business headquarters of Everbright Life Insurance Co., Ltd., said when reviewing the main companies of the company in 2018 that in 2018, the company implemented the group’s "three-four-three" strategy and implemented the group’s "three-four-four" business initiatives. "Three" means "famous stars, famous products and famous shops"; "Four precisions", that is, products should be exquisite, customers should be precise, services should be fine and management should be lean.
Jiang Jing, assistant general manager of Xinhua Pension Insurance Co., Ltd., said that returning to the origin means returning to the origin of the bank channel, and the products sold should be aimed at the needs and characteristics of the customer base of the bank channel. I always say that it is correct to have four suitability in sales, that is, the right products should be sold to the right people at the right price and through the right channels. These four appropriateness are right, and the result of channel sales is right. If any aspect is wrong, risks and problems will definitely appear, such as sales chaos or misleading sales.
Wan Jin: How to stimulate customers’ demand for protection is the key.
Wan Jin, General Manager of Bank Insurance Center of Huaxia Life Insurance Co., Ltd.
Wan Jin: 2018 should be said to be a year of rapid changes in the banking insurance business. The birth of mutual insurance shows us that the people (603883, stock bar) have a very strong sense of protection (20 to 30 million customers enter mutual insurance in a few days), so for us, how to stimulate customers’ protection needs is the key.
In China, the number of bank customers is the largest. Compared with the mutual guarantee of 30 million, there is a huge space for one billion bank customers. Therefore, in 2019, we proposed empowerment, that is, banks and insurance empower each other to further activate customer needs and make the insurance market bigger and stronger.
In the past, there were many factors that might play games, such as the high and low fees. But today, we have done a lot of articles on the close integration of debt and investment, as well as the integration of data and technology. According to a rough estimate, the scale premium of the banking insurance industry in 2018 was almost 770 billion, a negative growth of 10% year-on-year; The premium paid in advance is basically flat, almost 160 billion, but at the same time, our cooperation mode has been changing.
It can be seen that, first of all, in 2018, we made some changes with customers as the center. For example, in terms of product supply, supply-side reform, our products are increasing, and we have made a lot of explorations with ICBC and CCB in terms of customer sharing. In the past, everyone competed for outlets and customers, but now it is more likely to do some development outside outlets through mobile banking and online banking.
We invited four guests today to discuss how bancassurance will break through this tight encirclement. I would like to ask four people to talk about our small summary of bancassurance in 2018. How can we develop rapidly in 2019? First of all, please welcome General Manager Jiang.
Jiang Chang: Look at the new value of bancassurance business from three aspects from the perspective of banks.
Jiang Chang, Senior Commissioner, Banking Cooperation Department, Institutional Business Department, Agricultural Bank of China
Jiang Chang: With regard to the new situation of the bancassurance market, we can see the changes in the market, the changes in demand and the changes in the strategies of various partners.
In these new situations, the new value of bancassurance business from the perspective of banks is reflected in three aspects:
First, the function is indispensable. insurance agency business is an effective means to improve the allocation of customers’ financial assets, enhance customer stickiness and enhance cross-selling ability, and it is also an important starting point for public-private joint marketing;
The second is that the benefits are outstanding and not easy to ignore. Among the many intermediary business varieties of banks, the agency insurance unit has a higher rate of return;
Third, the comprehensive value potential is huge. In recent years, both banks and insurance companies have continuously expanded cooperation areas and deepened cooperation in insurance asset custody, financial markets, asset management business and investment banking business, and their comprehensive contributions have been growing.
Agricultural Bank of China will accelerate the five major transformations and promote the new development of bancassurance business.
The first is to speed up product transformation, optimize product supply, continuously enrich diversified varieties, and unite insurance companies to tailor products according to the characteristics of bank customers; It is also necessary to accurately match products and sell the right products to the right customers;
Second, we should speed up the transformation of marketing model and strengthen public-private linkage;
The third is to speed up the transformation of online and offline integration. The bank insurance business needs to adapt to the digital and intelligent development trend of the whole society and realize the development of technology empowerment. At present, the proportion of online agency insurance business of Agricultural Bank of China has reached 94%, but the level of intelligence needs to be further improved. We should build an intelligent insurance system and create a new ecology of bancassurance business.
The fourth is to speed up the transformation of the marketing system, change our current mode of focusing on network marketing, and create a new marketing system in which network marketing and team marketing go hand in hand;
The fifth is to speed up the transformation of business model, take customer total asset management as the core, and innovate scene marketing and precision marketing; Take customer risk management as the core, and incorporate comprehensive marketing and comprehensive services. In the process of promoting transformation, we resolutely implement regulatory requirements, strengthen risk management, and ensure the sustainable and healthy development of bancassurance business.
Wan Jin: Thank you very much for your summary. Agricultural Bank of China has many outlets and a large number of customers, and it is also a big cooperative company. It should be said that in 2018, we made a lot of explorations in the online business development of cooperation with Agricultural Bank of China. I just saw that online business has reached 94%, which is developing very fast. I remember that the Agricultural Bank of China was only 20% when it first started, and it reached 94% this year, indicating that the role of technology empowerment is particularly significant. I think according to the five transformations of the Agricultural Bank of China, we will also cooperate with the bank to do a good job of matching after returning, and make use of our own advantages. I believe we can achieve better results in 2019. Let’s ask Zhao Zong to talk about his thoughts.
Zhao Feng: Take insurance business as a necessary link in customer service.
Zhao Feng, General Manager of Wealth Management Department and Personal Finance Department of Bohai Bank.
Zhao Feng: Bohai Bank is the latest national joint-stock commercial bank in China, and this year is the 13th year. 2018 is the first year for us to reopen the insurance agency business, and we are still new recruits in the field of bank-insurance cooperation. There are many places to learn from the bank peers and non-bank partners present here.
One point I often emphasize is that we don’t sell insurance. Accurately speaking, Bohai Bank does not advocate selling insurance separately, but regards insurance business as an indispensable part of our comprehensive financial services to customers and a necessary link in the financial management process.
The long-term development vision of Bohai Bank is to be a "modern wealth manager with the best experience". We studied with our shareholder, Standard Chartered Bank, and divided the financial service process for customers into "four steps and five stages".
The so-called "four steps", the first step is cash management, that is, liquidity management. To cope with unexpected needs, the reserve fund on hand should generally guarantee the normal expenses of families for three to five months;
The second step is risk management, which uses insurance. This is what we must tell our customers, mainly to avoid the impact of personal illness or personal accidents on family finances. Examples of poverty caused by diseases and accidents are not uncommon, which requires customers to have insurance awareness. We strongly recommend customers to buy health insurance and accident insurance, especially critical illness insurance;
The third is debt management. We will help customers plan their debts. You should leave enough money to pay the monthly mortgage, credit card or other debt expenses. Apart from the above cash management, risk management and debt management, the remaining money is used for investment;
The fourth step is asset allocation management. Asset allocation is a variety of asset combinations, such as deposits, securities investment funds, bank financing, etc., and insurance products also play a very important role in it. We will advise customers to invest in annuity insurance or life insurance according to their own situation. These two types of insurance products are complementary to bank products and cannot be replaced by each other.
Because their cash flow structure is different: the bank’s financial management has regular cash flow back, and the principal and interest return when the financial management expires; However, the cash flow characteristics of insurance products are different. For example, whole life insurance products have no cash return during their lifetime, so their functions are mainly inheritance and family financial security.
Another example is annuity insurance, which has a steady and certain cash inflow during a person’s life, so its function is mainly to provide for the elderly. Only by combining these products with different cash flow characteristics can we meet a person’s different financial demands. Combining them well is a tailor-made financial plan for customers. So we divide our customers into the above four stages to help them manage their wealth and manage their wealth life.
At the same time, from the time axis, we will also divide customers into five stages of overlapping cycle, that is, the familiar life cycle, single, two-person world, family of three (family of four), quasi-retirement and pension. In different life cycle stages, the characteristics of income and expenditure curves of customers and families are different, and the applicable products, especially insurance products, are also different, which need to be planned according to customer characteristics.
We have been doing this kind of thing since last year, so we say, "We don’t sell insurance, but take insurance as an indispensable part of our customer service". Therefore, the insurance business structure of our bank is quite different. Basically, there is no financial insurance, but most of them are security insurance. Our life insurance and annuity insurance account for about 80%, and those with a term of more than 10 years are about 90%. This is also the requirement of implementing the supervision department’s "return to the origin of insurance and insurance surname protection".
Wan Jin: Thanks to Zhao Zong for sharing. Zhao Zong of China Bohai Bank spoke brilliantly. Insurance is actually four tools for a customer’s cash management, risk management, debt management and asset allocation. It is a tool for serving customers instead of selling insurance separately, which explores a new way for us. Let’s ask Everbright Yongming to talk about the summary of the bancassurance business in 2018.
Wei Aichen: Implementing "Three Qualities and Four Qualities" and Making Value Adjustment
Wei Aichen, General Manager of Bank Insurance Business Headquarters of Everbright Life Insurance Co., Ltd.
Wei Aichen: We are a first-class subsidiary of Everbright Group, which holds 50% of the shares. Four shareholders are Fortune 500 companies, Yongming Finance accounts for 24.99%, and two central enterprises, Angang and Ordnance, each account for 12.505%, with a registered capital of 5.4 billion. We have our own independent and wholly-owned asset management company, which is the 12th insurance company in the market to set up an asset management company. In the whole development process of Everbright Yongming Insurance, asset companies still play a great role. The company’s business development is mainly based on bancassurance business, which accounts for 50%, and the others are individual insurance, group insurance, electricity sales and online sales. The five major lines are relatively complete, mainly bancassurance.
After the equity reform in 2010, the company has turned into a Chinese-funded company. Before 2010, it was five business departments. After the share reform in 2010, it expanded rapidly to 22 branches, 67 third-level institutions and more than 100 fourth-level institutions. The whole business developed very fast and grew year by year.
In 2013, the company put forward the direction of value transformation, firmly transformed the value of futures, and continued to make profits for six consecutive years from 2013 to now. With the promulgation of DocumentNo. [134] of the China Insurance Regulatory Commission, the whole insurance market began to realize product replacement on October 1, 2017. In a series of market environments with strong supervision and strict transformation, we can see that it has a certain impact on the business scale. However, our company’s value transformation in 2019 is still very firm.
Looking back on 2018, the main work of our company is as follows:
The first is to implement the "4-3-3" strategy of Everbright Group, that is, "to build four world-class, three China-class and three China characteristics". Among them, the insurance section is in three China characteristics, namely, to build a "valuable and distinctive" domestic life insurance company.
At the same time, when implementing the group’s "four three three" strategy, we will implement the group’s "three excellent" business initiatives. "Three names" means creating "famous stars, famous products and famous shops", and "four precisions" means exquisite products, accurate customers, meticulous services and lean management, and implementing the whole management measures under the strategic requirements of the Group.
In terms of bancassurance, the company has made some valuable adjustments on the basis of the business strategy of "three talents and four elites". Company leaders put forward the management measures of "three constructions and one promotion", "building teams, mechanisms and channels to promote market share".
In terms of the team, it is our important direction to build a high-end team, focusing on the training of high-end skills of the team. In terms of high-end insurance, we are gradually forming a private insurance brand with a characteristic brand "Sunshine Zhenchuan", positioning "four accurate family customers" and "six customer needs" and providing comprehensive financial solutions.
This is also in accordance with the positioning of the six platforms of the Group’s E-SBU, to create a plate with great wealth, great pension and great health. At the high end, we are the fourth company in the market to launch the "insurance+trust" high-end insurance model. In 2015, we began to build a team, set up our own private banking insurance department, and implemented systematic operation. In terms of "building channels", we put forward the strategy of "four-wheel drive" to create accurate channels.
This is a positioning in the transformation process of Everbright Yongming. According to the group’s strategy, we should pay close attention to high-end teams, optimize products, build cooperation channels and effective incentive mechanisms, and do some actions in this direction.
Wan Jin: Thank you, General Manager Wei. Everbright Yongming has made some plans from famous stars and famous shops under the strategy of Everbright. Huaxia has been a high-end customer since 2016, and we regard Everbright as our benchmark. In 2016, we started to do trust, that is, watching them do some articles, and we did some learning.
Wei Aichen: Our bancassurance is positioned as a high-end insurance. Private insurance is the private insurance department internally and the family office externally. Each of our branches has private insurance experts, who are serving high-net-worth customers from different channels and have gained some gains in recent years.
Wan Jin: In 2017, we launched a private board meeting for high-end customers, so the development of our high-end customers was very good in 2018. In 2019, large single customers accounted for more than 50% of the business of many branches, and now it is still relatively good. We continue to learn from Everbright Yongming in this respect. We can do more communication in the future. Next, please ask General Manager Jiang to talk about his views on the cooperation between bank and insurance.
Jiang Jing: The right products should be sold to the right people at the right price and through the right channels.
Jiang Jing, Assistant General Manager of Xinhua Pension Insurance Co., Ltd.
Jiang Jing: I come from Xinhua Pension Insurance. In fact, the company does not do traditional contractual life insurance business, including bancassurance business. The company focuses on the national three-pillar old-age security system business, focusing on trust annuity business such as enterprise occupational annuity and pension, and also includes old-age security management business and third-party asset management business. At the invitation of General Manager Shi, let me talk about the cooperation between bank and insurance. I am a veteran of bank and insurance, and I have great feelings for the business of bank and insurance. Therefore, as a banker coming over, I would like to take this opportunity to talk about my personal views.
First of all, in the past two years, under the leadership of Chairman Wan Feng, New China Life has adhered to the strategic transformation of returning to the origin of insurance, reducing the wholesale payment and increasing the installment payment, especially in the aspect of bank insurance. The futures payment business has developed well in the past two years and achieved the expected results. The company’s value has been improved, and greater value has been fed back to customers.
Now let’s talk about the relationship between bank and insurance cooperation from the perspective of historical development. Because I was in Ping An Life Insurance Company of China in 1994, I started to do bancassurance business in 1995. At that time, bancassurance was the main seller of financial and accident insurance. In 1997, I developed the sunset red comprehensive protection endowment insurance business, which was a long-term life insurance business with real renewal premium. It should be said that it was the earliest bancassurance business invented and put on the market in the industry. At that time, only Ping An Life Insurance Company of China Insurance, where I was located, exclusively carried out this business, which attracted the attention of peers after the launch of the wholesale business in 2001.
At that time, the original intention of developing this business was three points: the first market belongs to the downward channel of interest rate reduction, and the people have the demand of maintaining and increasing value; Facing the reform, the second bank is willing to use the existing channel outlets and customers to improve the comprehensive profitability of the bank; Thirdly, the business pressure of group insurance is very great, and it goes to zero every year. I envy that individual insurance has renewed premium every year. Therefore, the comprehensive protection old-age insurance for sunset red has been developed with three product combinations, which has four protection responsibilities, including accident insurance during payment, one-time payment at age, monthly pension and lifelong death compensation. The reason why there are only two modes of premium payment, monthly payment and annual payment, is the problem of income. It is affordable for everyone to pay a monthly payment to 100 yuan or an annual payment to 1000 yuan, which has little impact on life; Second, it has little impact on bank deposits; Third, the original intention of the business is to form a snowball effect and accumulate and expand the business scale year by year. It has indeed achieved good results, especially when interest rates were cut in the first two years, and everyone lined up to buy it, which was very impressive. However, although the scale expanded rapidly after the emergence of wholesale business, many companies forgot or didn’t know the original intention and origin of developing bancassurance business, which also caused many chaos, especially in the blind pursuit of scale growth and even in order to get more incentive fees, some misleading sales behaviors occurred, and even some chaotic behaviors such as embezzlement and misappropriation of expenses, illegal investment and use of bancassurance business premiums.
After so many years of development, the bancassurance business has achieved great growth. At that time, I said that bancassurance may not undergo qualitative changes until ten years later, before which it was the accumulation of quantity. This qualitative change is the bank’s understanding of the bancassurance business. There must be a fundamental change in the understanding of the income of intermediary business and its position in the bank. Otherwise, there will be no great development.
Now the national development has entered a new era and a new stage, and the cooperation between bank and insurance will also enter a new stage. At present, the regulatory authorities or the previous guests all say that the bank-insurance cooperation should return to its original source. I think the bank-insurance cooperation should have more extensive, multi-level and multi-angle cooperation in the new era. I want to talk about it from the breadth and depth of cooperation.
Broadly speaking, first of all, banks and insurance are customers of each other, and bank employees have insurance protection needs, including accidents, medical care, pension and enterprise annuity, and both banks and bank employees are customers of insurance companies. Insurance companies are also customers of banks, with a large number of deposits, custody services and other general settlement services.
Secondly, they act as agents for each other. Banks can sell the products of insurance companies, and insurance companies can also sell the products of banks. Banks have strong advantages in channels, outlets, brands and customer resources, and insurance companies also have networks all over the country. In particular, insurance has very strong training and marketing capabilities, and banks also recognize this aspect. Moreover, insurance is more of a merchant, and banks are merchants, which is very different. Selling complex insurance products requires face-to-face communication, and banks are more suitable for selling simple products that meet the characteristics of bank customers and the sales ability of bank personnel.
At that time, why did you develop such products as bancassurance with certain savings accumulation nature? It is also because people who often go to banks have such needs and trust in the brand reputation of banks. In addition, it is very important that everyone says that insurance sales should return to the origin, and more refers to the sale of security products. However, what I want to emphasize is not exactly the same as what everyone said. By returning to the origin, I mean returning to the origin of the bank channel, and the products sold should be aimed at the needs and characteristics of the customer base in the bank channel. If all the outlets are old people, he can’t understand and buy complex products. If it is sold to high-net-worth people through the private banking department, or through the bank’s online banking platform, the customer base is mostly young people, and the needs of these customer groups are different, then they should sell the products they need. I always say that it is correct to have four suitability in sales, that is, the right products should be sold to the right people at the right price and through the right channels. These four appropriateness are right, and the result of channel sales is right. If any aspect is wrong, risks and problems will definitely appear, such as sales chaos or misleading sales.
The third is the cooperation between the capital side and the asset side. Insurance and banks can also have a lot of cooperation in this respect. Including our developed pension products, old-age security management products, the underlying assets of wealth management products, etc. After the new asset management regulations come out, banks will set up their own wealth management subsidiaries. Although the wealth management subsidiaries have strong parent company support, their investment ability cannot be established in a short period of time. Banks have strong advantages in obtaining funds, and insurance asset management or pension insurance companies have strong investment ability, advantages in obtaining high-quality assets and special investment licenses. It can help banks, especially wealth management products, to dock assets, and develop asset management products that can be bought by bank wealth management subsidiaries, or embedded into wealth management products as underlying assets and then sold to bank customers.
Depth means from different levels of products, first of all, insurance products, insurance products must meet the needs of bank customers, banks are now marketing in different channels. No matter what customers are going to the counter platform, they should sell products suitable for these customers, and they should not go against the essential characteristics of the customer base. If you have to sell some very complicated products, it will be difficult for these older customers to understand and accept, while the online banking platform is dominated by young people. It will be much better to sell products with strong investment or simply guarantee products on the online banking platform. Followed by annuity related products, and the third is asset management products. Generally speaking, banks are more suitable for selling products close to savings, while security products are suitable for spending time communicating with customers face to face. It also depends on customers’ awareness of risks and this product. For example, if millions of medical workers are aware of it, they can sell it at channel outlets. If they can’t correctly understand it, and the insurance and after-sales service procedures are complicated, they can’t sell it through channels. Don’t sell unsuitable products beyond the capabilities of channels and teams. It is necessary to develop in depth in product cooperation and constantly explore innovative products to meet customer needs. With the help of internet channels and the application of new technologies, the cooperation between the two sides can be deepened continuously, and training and resource sharing and customer resource sharing can be strengthened.
Our starting point is to take customers as the center, take customers’ interests as the core, solve customers’ needs and provide solutions for customers. In this way, customers will choose you to trust you in banks and insurance, form a loyal and stable customer base, enterprises will have a continuous and stable cash flow, banks and insurance will realize value sharing, benefit sharing and win-win cooperation in cooperation, and customers will have viscosity. What everyone pursues is that customers are sticky, active and can buy repeatedly.
Bank-insurance cooperation and mutual empowerment Spring is not far away.
Wan Jin: Thanks to General Manager Jiang for sharing. He shared the development history of China bancassurance, and made a profound exposition on the development of bancassurance through breadth, width and depth. Finally, please ask each of the four guests to give a word of blessing to bancassurance in 2019.
Jiang Chang: We firmly believe that in 2019, the effect of industry transformation will be further manifested. "Winning the day and looking for the beautiful waterfront, the boundless scene will be new for a while, and it will always be spring when you are idle." With the joint efforts of everyone, the bancassurance business will also glow with new vitality and usher in new development.
Zhao Feng: Leveraging financial technology, returning to the origin of insurance, based on mutual empowerment, do a good job in bank-insurance cooperation.
Jiang Jing: I believe that the cooperation between banks and insurance has a broad market and space, because these two subjects are naturally highly complementary. For those who make progress, those who make progress often arrive, do a good job in the present, step by step, I believe that the cooperation between banks and insurance must have a broad space and a bright future.
Wei Aichen: I believe that in 2019, the market of bancassurance is getting better and better, and there is a vast space. The Spring Festival will soon be over. The Spring Festival will be in beginning of spring, and the spring of insurance will come. We believe that the spring of bancassurance will come, and we will seize the day. Our industry is getting better and better. Thank you!
Wan Jin: Everyone is full of expectations for 2019. Just now, Zhongrong Life said that they have made a scale of 5 billion yuan, and it is indeed better than expected to start this year. From our company’s own point of view, as of yesterday, the entire scale of our bancassurance was almost 40 billion, with a delivery speed of 4 billion, which was particularly fast. Through today’s forum, if we want to return to the origin, we should take customers as the center, product transformation is the key, value transformation is the core, technological innovation is the means, and customer service is our foothold. New era and new achievements. In 2019, our bank and insurance cooperation will empower each other, and we will surely have a better spring waiting for us! Thank you, everyone.