China Life to expand technology use to sell more policies, press on with H-share, property strategy
Executives from mainland’s top insurance company make case for use of technology to reach out to consumers in remote corners of the country
China Life Insurance, the biggest insurer on the mainland, plans to use big data, artificial intelligence and the internet to expand its business after it reported a 68 per cent net profit growth for 2017, according to its senior executives.
“We will invest more in our internet platform to access consumers in remote villages,” said Xu Hengping, vice-president of China Life at a press conference to announce the company’s results on Friday. “We will also use AI and big data to understand the insurance needs of children and other members of family.”
The company had said in August that it planned to team up with Chinese internet giant Baidu as part of an ambitious plan to invest US$1 billion in artificial intelligence.
“The application of AI and big data will be important to the future development of the insurance industry in China,” China Life chairman Yang Mingsheng said then.
Online insurer ZhongAn Online Property & Casualty, said recently that it aims to raise service quality by using AI for the pricing of products, underwriting, fraud detection and customer services.
China Life will also continue to invest in H shares in Hong Kong and make other overseas investments as it helped the insurer to report solid profit growth.
“We invested in many high quality H shares in Hong Kong in 2017, which allowed us to gain from the market rally last year,” said Zhao Lijun, vice-president of China Life, at the same briefing.
The Hang Seng Index rose 36 per cent last year and was the best performing market worldwide. It’s up 0.81 per cent so far this year.
Zhao said the insurer has invested in overseas markets including property, without elaborating.
“We strictly follow the country’s requirements and policies on mainland companies’ overseas investment,” said Zhao, referring to guidelines issued by China on restricting investments in high-risk sectors such as entertainment but supportive of projects in countries along the New Silk Road.
A strong investment return and strong sales of new life policies allowed China Life late on Thursday night to report a net profit at 32.25 billion yuan (US$5.1 billion), up 68 per cent from a year earlier, slightly better than analyst estimates of 32.09 billion yuan polled by Bloomberg.
New business value, an important indicator for insurance companies, rose 22 per cent year on year to 60.12 billion yuan.
Lin Dairen, president of China Life, said China Insurance Regulatory Commission’s crackdown early last year on speculative short term insurance policies by smaller players, helped the company sell more long-term cover.
“China Life’s total premiums of 511.97 billion yuan in 2017, represents a market share of 19.7 per cent – the largest in China,” adding that with economic growth taking off, the insurance industry as a whole will benefit from it.
A plan by Beijing to combine the banking and insurance regulators – the China Banking Regulatory Commission and the China Insurance Regulatory Commission – is going to strengthen regulatory oversight and benefit insurers such as Ping An and China Life, according to a Credit Suisse report.