Anbang 2.0 strategy: focus on pensions and medical care

For the first time, the overseas insurance assets of Anbang Life Insurance exceeded its domestic insurance assets, which makes Anbang the first Chinese insurance company with global competitiveness. The chairman of Anbang Insurance Group, Wu Xiaohui said that ‘Anbang 2.0’ strategy would focus on pension and medical care.

Insurance companies have recently disclosed their 2016 annual reports. Anbang Life Insurance's annual report disclosed in April 26 shows that with the progress of globalization strategy, as of the end of last year, Anbang's total assets rose to 1.45 trillion. Among them, it is noteworthy that the overseas insurance assets of Anbang Life Insurance exceeded its domestic insurance assets.

The overseas assets of Anbang Life Insurance reached more than 900 billion yuan

In April 26, 2017, Anbang Life Insurance announced its annual report of 2016. Although when compared with 2015, the profits slightly declined, the net profits in 2016 still reached 15.115 billion yuan.

The report shows that, by the end of 2016, the total assets of Anbang have reached 1.45 trillion yuan. Among them, the overseas insurance assets have reached more than 900 billion yuan, accounting for 60% of the total assets. Anbang has become China's first internationalized insurance company.

The official statistics of the Insurance Regulatory Commission shows that, in 2016, there were only 2 complaints against Anbang, the level of customer satisfaction was in the leading position of the entire industry. This means the customer satisfaction is an important core competitiveness for insurance companies.

Overseas subsidiaries are all profitable in 2016

With domestic businesses continuously growing, last year's overseas subsidiaries Anbang acquired in South Korea, Netherlands, Belgium and other regions, have achieved substantial growth in business scale and profits.

In 2015 Anbang acquired VIVAT insurance company in Netherlands, stopped the loss in the same year and made profit in 2016.

According to a practitioner in South Korean insurance industry, after the acquisition of Tong Yang Life, the company achieved substantial growth through the development of new products and the active expansion of new channels. The premium income of Tong Yang Life in 2016 has reached 6.7 trillion KRW, increased more than 57%, and the growth rate was ranked first in the Korean insurance market. At the same time, the net profit has reached 229.7 billion KRW, which is the best performance of Tong Yang Life since its establishment.

“The Netherlands and South Korea are more developed markets in the traditional financial industry, which means that the competition is more intense compared with emerging markets. In such fierce competitions Anbang was able to stop local losses and improve profits by raising the level of management, makes the company a representative of Chinese wisdom with international usage. It is worth to study Anbang as a typical case. The fact Anbang can stand out in this kind of fierce competitive markets shows that the company has some strength in management and technology.” said Lin Yifu, the honorary president of National Development Institute in Beijing University, expressing his full admiration of Anbang’s success in international markets.

Take advantage of overseas low interest rates to provide loans for small and medium enterprises

With the improvement of overseas business, Anbang has achieved synergies between domestic and foreign markets, introducing overseas low-cost funds into China.

In 2016, Anbang Life's subsidiary, Tang Yang Life took advantage of the low interest rates in overseas markets to provide loans for Chinese SMEs in order to support their innovation and development. Anbang Life’s subsidiaries in Belgium and Netherlands also purchased over $ 200 million high-grade bonds issued by China National Development Bank, to achieve the recycling of foreign exchange through its international platform.

“Anbang has realized that modern insurance is very important for a modern country,” said Lawrence Summers, a well-known American economist at the China-Belgium Economic Forum. “Insurance can protect people's property and personal safety, so China is fully aware that if you want to provide your people a better life, you must provide them better insurance services. Anbang set a great example for the globalization of Chinese enterprises, it provides services not only for the company itself, but also for the whole of Chinese and the world 's citizens.”

An insider of Anbang said that, the development of Anbang insurance is benefited from the national strategy ‘one belt and one road’. In the future, there will be more competitive Chinese enterprises who can show the wisdom of China in the countries along the ‘one belt and one road’.

Lin Yifu: the performance of Anbang in international mature markets is admirable

On the new practices and explorations of Chinese enterprises in the international market, the famous economist, former senior vice president and chief economist of the World Bank, Lin Yifu has recently expressed his own opinions to our newspaper.

Lin Yifu thinks that, from the perspective of globalization, the fact Chinese enterprises have the advantage of meeting the global market competitiveness through their own efforts and developments is an inevitable result. “For example, in terms of insurance in the financial industry, markets like Netherlands and UK are the markets in which the insurance industry has developed very early. I have seen Anbang's ability to quickly access a local market after entering the European market, and make a Dutch insurance company profitable. The insurance market in South Korea is also very competitive, and Anbang’s acquisition of Tang Yang Life has also produced very good results, which shows that our Chinese enterprises are extraordinary on the management level. The company is a good example of Chinese management wisdom. I admire Anbang’s performances in the international mature markets and excellent management abilities.”

Lin Yifu also says: “In the future, we should write down these successful cases to teach our students, because this kind of wisdom is very valuable. I am engaged in theoretical works, and theories always come from practice cases. Behind these successful experiences there must be certain reasons, and if these reasons can be sorted out, they will become a common economic wealth.”

The insurance industry is China's first opened financial industry after it joined the WTO. In the past two decades, during the continuous market-oriented process of development, the role of Chinese insurance companies went from the good students to the providers of financial innovation and insurance experiences.

“These stories show that, in a competitive market environment, especially under the pressure of global economic downturn, Chinese companies know how to use the wisdom of Chinese management philosophy. The case of Anbang has a significant academic value. As the world's second-largest economy, China will have more and more of the top 500 enterprises in the world. These are specific manifestations of Chinese flourishment, economic development, and the significant place in the progress of globalization.” Adds Lin Yifu.

Wu Xiaohui: The 2.0 strategy of Anbang focuses on pension and medical care

On April 26, during an interview for the Beijing News, Wu Xiaohui, the chairman of Anbang Insurance Group said strategic focus for the next 30 years are pension and medical care. Here's an extract of the interview:

Reporter: According to the annual report of 2016, Anbang Life's total assets has reached 1.45 trillion, in which more than 60% are overseas insurance assets. It is predictable that another member of world’s top 500 enterprises will emerge in China. As an international company in China, what is your next plan?

Wu Xiaohui: ‘One Belt and One Road’ is a great strategy. As a Chinese enterprise we actively follow this strategy. Our overseas subsidiaries are all profitable, the Dutch insurance company VIVAT has made a profit only one year after the acquisition, which is a specific manifestation of using Chinese wisdom to improve the level of management. Anbang's overseas investments were all conducted with international financing, and did not contain any foreign exchange. And we can bring foreign exchanges into China by purchasing bonds issued by the China Development Bank. We will make these insurance companies stronger and more competitive.

Reporter: The famous economist, professor Lin Yifu said in an interview with the Beijing News, “these stories show that, in a competitive market environment, especially under the pressure of global economic downturn, Chinese companies make use of the wisdom of Chinese management philosophy. The case of Anbang has a significant academic value.” What are the focuses of Anbang’s future development?

Wu Xiaohui: In the past decade, we have achieved the ‘Anbang 1.0’ goals. In accordance with last year standards, we have been ranked as one of the world's top 500 enterprises, which is a new starting point for us. Anbang is a globalized insurance company rooted in China. Our next target, ‘Anbang 2.0’, focuses on pension and medical care, including community pension, intensive care, home care, etc. We hope that it can improve social employment, and reflect corporate social responsibility.

Original article here

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