Life and Death of the Foreign Investment Insurance Industry
Terrible news came - the previous CEO of Zurich insurance, Martin Thain, had suddenly passed away. In the third quarter of last year, the performance of Zurich insurance fell sharply, which caused Mr. Thain's resignation. Before then, Zurich insurance announced in the third quarter of 2015 that it would give up purchasing British RSA insurance. Due to that, the company predicted the explosion accident in Tianjin, China, would make its general insurance business undertake $200 million’s operating losses. This really inspires us to think about the foreign insurance’s way of survival in the present China.
Development by adjusting measures to local conditions
Despite the uniqueness of the Chinese market; when foreign capital insurance entered, the Chinese market itself was adopting concepts or patterns similar to those developed by financial markets. In terms of the foreign insurance status quo, being existent for decades in Chinese market, there are obvious situations that is unacclimatized in the localization process. Customizing the Chinese market products by adjusting measures to local conditions is the key to success. Foreign insurance companies should invest in designs of new products, services and channels targeting on China market.
The challenge for the foreign insurance companies is obvious, but it is not insurmountable. The potential returns by promoting Chinese market growth successfully are still quite attractive. If foreign insurance companies want to have the abilities of stepping over, innovating, creating the design of new products, pricing structures, as well as more effective service and delivery mechanism, it needs to find the solution of "made in China" by adjusting measures to local conditions.
Keep up with the pace of policy
China is implementing a series of financial reforms. The premium rate marketization, RMB internationalization, free trade zone pilot project, and new distribution pipeline etc provide a new great opportunity. The introduction of "The State Council’s 10 National Notices" in Chinese insurance industry provides a strong guarantee and guidance for insurance enterprises to go towards a new field as well as develop new products and services. Therefore, foreign insurance companies must keep up with the pace of regulation development and providing opportunities to them.
Follow the pace of China closely, make continuous innovation
The behaviors of Chinese financial consumers are changing. As is observed, the means of science and internet are reinterpreting the meaning of customer interaction. This will create new opportunities for foreign capital insurance companies. However, it also depends on the action of regulators, which is a tradition in China. Foreign insurance companies can't take it for granted to copy the internet financial model in its domestic market. Due to the wide scope and large scale of China's market, it may only adopt some useful Internet financial concepts in developed financial markets. The innovation by adjusting measures to local conditions is the only way to success.