Anbang injects Chinese wisdom into global insurance market

Chinese insurers recently began disclosing annual reports for the previous year. According to the results announced by Anbang Life Insurance, the life insurance subsidiary of the financial conglomerate Anbang Insurance Group, Anbang Life continued to grow in market size in 2016, with total assets of 1.45 trillion yuan ($210 billion), and posted profits of 15.11 billion yuan. The amount of its overseas business accounted for roughly 60 percent of the company's total assets, surpassing its domestic capital for the first time.

Overseas subsidiaries making profit

In addition to its positive performance in the Chinese market, Anbang Life's overseas subsidiaries in the Republic of Korea, the Netherlands and Belgium all reported growth in size and profit in 2016.

VIVAT, a Dutch insurer acquired by Anbang Life in 2015, ended its loss-making run within a year and went on to see profit growth in 2016.

According to insurance observers from South Korea, Tongyang Life, Anbang's South Korean subsidiary, has realized significant growth in business operations via product innovation and enhancement of distribution channels. Its gross premium income reached $6.7 trillion won ($5.9 billion) in 2016, a 57 percent increase compared to a year ago, making it the fastest-growing insurer in the South Korean market. The $229.7 billion won ($202.7 million) in net profit also made 2016 the best performing year in the company's history.

"Given the fact that both ROK and the Netherlands are well-developed in finance, with more fierce competition, Anbang's success demonstrated how a Chinese company could help local enterprises make profits through management export," said Justin Yifu Lin, professor and honorary dean of the National School of Development at Peking University.

"I'm impressed with Anbang's achievements overseas and convinced of their leadership in management and technology," said Lin, who is also vice-president of at the World Bank.

Anbang's takeover revitalized VIVAT

Last month, 37 executives from 34 Dutch insurance intermediaries and brokers visited the headquarters of Anbang Insurance Group, parent company of the Dutch insurer VIVAT, in hopes of studying the management and operation in Anbang's successful development.

Since Anbang's acquisition in 2015, once state-owned VIVAT was quickly revitalized. With Anbang's capital injection and managerial realignment, VIVAT stopped its money-losing steak and is now racing back to the front end of the Dutch insurance market.

"Our industry is all about good people, knowledge and speed. We are now able to attract good people. Senior underwriters and claim specialists are coming to us. We changed the whole management, and moved employees from various places to Amstelveen together. This brought efficiency, synergy and sharing of knowledge," said Edwin Grutterink, general manager of VIVAT's P&C business.

Bas de Voogd, a member on the trip to Anbang, oversees a family-name insurance intermediary founded by his great-grandfather more than 100 years ago. His first impression of VIVAT for the past two years came from the change in management. "Our business is based upon trust, the people we do business with changed for the better. I have more confidence in doing business with them."

Michael Bieger, CEO of Dutch financial consultancy Apple Tree recalled that his firm was in the same building as Zwitserleven, VIVAT's pension brand for 17 years, yet they hadn't had any business with Zwitserleven until Anbang's takeover.

Bieger said he was impressed by Anbang's technological innovation, and that the Beijing trip would help when he goes back to the Netherlands. "A lot of our clients want to know who's Anbang, what's Anbang. Now we've seen everything, we could explain it more and say, 'we've been there, we've talked to the people in Anbang, it feels like a family.' I think that's really important."

Good things are happening now with VIVAT and Anbang, Grutterink said. Through adapting Anbang's experience in financial innovation, VIVAT streamlined its services and products, providing its customers with better pricing and coverage.

Hans Visser, general manager of Zwitserleven, is a veteran insurance executive with 30 years of experience in the market. Prior to joining VIVAT, he worked for one of the largest brokers for six years. He said Zwitserleven has introduced many experts in the past two years. Some of them used to work for brokers and understand the market well. Together, they formed a vigorous sales force targeting pension purchasers.

"We used to be nationalized and state-owned. Then the Chinese came in. People were speculating, but in no time we sent them a message: 'Don't look at the West for innovation and technology. Look to the East.' That's what's happening there. All the startups are coming from the East, not much from the West," said Visser.

Last summer, he heard a lot of brokers saying: "we don't know about the Chinese. What's going on? Is it for the long term or only for the short term?" He thought it was a good idea to bring the brokers with them to Beijing.

"Legislation will not allow us to pay for them, so they are paying for themselves. We are only facilitating and organizing the trip. And they are very happy and enjoying it," Visser said.

In a previous interview with China Daily, Alan Barrell, entrepreneur in residence at the Judge Business School at the University of Cambridge, said Anbang brought to VIVAT a new understanding of the 21st-century insurance market and its needs, which was effectively a makeover of a 100-year-old, traditional company.

Barrell said he expects to see more aging and struggling Western companies invigorated, transformed and given extended and profitable lives, thanks to the injection of Chinese innovation and vigor, "not just Chinese money".

Strategy echoes with B&R Initiative

With the rapid development of overseas business operations, Anbang has created synergy between domestic and international markets.

In 2016, Tongyang Life, Anbang's South Korean subsidiary, began providing loan services to Chinese small and medium-sized enterprises, taking full advantage of the interest difference between the two countries. In addition, Anbang's subsidiaries in Belgium and the Netherlands purchased $200 million worth of bonds issued by China Development Bank, resulting in capital inflow to China through Anbang's overseas platform.

Speaking of Anbang's achievements in globalization during the China-Belgium Forum in 2016, former US treasury secretary and former president of Harvard University Larry Summers agreed that "it has recognized that as a society, modernized insurance is absolutely fundamental to the protection and security of its citizens".

"So Anbang is an example of a globalizing Chinese institution with enormous benefits not just for itself, but for the citizens of China, and through what its capital can accomplish, citizens around the world," Summers said.

Wu Xiaohui, CEO of Anbang Insurance Group, recently said that Anbang has benefited from China's Belt and Road Initiative. He expects more and more Chinese enterprises to "contribute their Chinese wisdom to countries responding to the initiative".

"We have realized the target of the 'Anbang 1.0' strategy in the past decade. We have the chance to join the Fortune 500 based on criteria for the last year, which will mark a fresh start for Anbang," Wu said.

"Anbang is an international insurance company rooted in China. We are going to fully implement our 'Anbang 2.0' strategy, which is retirement services and healthcare, including community retirement services, ICU care and home-based retirement services, which will create more jobs and echo our social responsibilities."

zhuanti@chinadaily.com.cn

(China Daily 05/14/2017 page25)