China Life and Ping An Insurance, the country’s two largest insurers, have both been focusing heavily on investment in technology, and now it appears artificial intelligence (AI) may becoming more important than sales agents across the sector, as premium income continues to soar. Traditionally, insurers have relied on armies of agents to sell their products.
This is particularly the case for life companies, many of which still employ thousands of agents to sell products to friends, relatives and contacts – sales very much driven by relationship building.
The nation’s largest insurer China Life still has 1.58 million agents, while number two Ping An has over 1.1 million, and both have previously made much of the fact they plan to expand those sales forces in future.
The two Chinese heavyweights, however, now appear to be shifting their message towards technology investment, in the mainland and Hong Kong, and how AI and big data will play an increasing role in selling products online.
China Life said last Thursday it had teamed up with internet search firm Baidu to form a fund to invest 7 billion yuan (US$1 billion) in AI-related technology companies and internet finance operations. China Life will plough 5.6 billion yuan into the venture, with Baidu covering the rest.
Its chairman Yang Mingsheng said during its results briefing on Friday that the investment will not only improve returns but also help the giant insurer expand its AI and other technological capabilities, which he believes will become paramount to future development.
Ping An, headed by founder and chairman Peter Ma Mingzhe, has been focusing on expansion of its online activities for the past five years, spending 1 per cent of its annual revenue or a total of around US$1 billion a year.
This has allowed the business to diversify into internet lending and create a wealth management financial platform, via Lujiazui International Financial Asset Exchange (Lufax). Lufax recently gained a license in Singapore in its first expansion overseas.
Ping An already has online platforms for its medical, healthcare, real estate and motor insurance businesses.
The chairman of Hong Kong’s newly set up Independent Insurance Authority, Moses Cheng, has stressed the need for other smaller insurance providers, too, to develop their own financial technology (fintech), to boost sales.
Hong Kong currently has an estimated 100,000 insurance sales people pounding the streets and hitting the phones to drum up new business, and the poaching of the best sales staff has become rife.
As AI and fintech evolve, this trend may shift again, with insurance companies likely to invest more on mobile app development, for instance, and other online sales channels to sell products.
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