This month we speak to Andre Chan, head of consumer lines at Generali China. Andre has a rich background with Western insurers operating in China including Mapfre, Chartis and AIU.
Like many Western insurers, Generali is only beginning its journey in China. So how will Generali compete with local players and internet incumbents in an increasingly competitive space? Andre informed us that “Generali China Insurance (GCI) will focus on selling insurance to and servicing its major shareholder CNPC resources. This includes insuring the group’s assets, operations and the needs of the 1.4 million strong employee base plus their families”. So, it seems CNPC Resources is the bedrock on which Generali will build its digital presence in China. To this end, Andre envisages that their “digital platform will be used as an effective end-to-end sales and services tool for our target customers”.
Many Western insurers partner with local insurers and, increasingly, local InsurTech startups and Andre confirmed that Generali are also “both partnering with external InsurTech partners and building their internal IT resources to create the digital propositions that will be cross sold to CNPC employees and standalone platforms”.
Turning to the emerging technologies, AI and blockchain, Andre considers “AI will have a bigger impact on the China insurance industry than blockchain. I say this because China insurance industry has enjoyed rapid growth in the past 15 plus years. That said, the industry as a whole is not very efficient and exhibits higher expense ratios when compared to other mature markets around the world. AI and automated rules will help to streamline the operations and improve service support, which will allow companies to become more efficient; the impact will be felt faster as well. Blockchain on the other hand allows data to be more transparent and data analytics can be more scientific. It is important but the impact in the nearer terms should be less, because there is no shortage of data and the China insurance market is very scalable.”
In terms of how traditional insurers such as GCI compete with Chinese internet companies, who are increasingly securing insurance and banking licenses “GCI is not a traditional insurer; we have two strong shareholders CNPC and Generali, each of whom bring their resources and expertise allowing us to compete effectively in both traditional and digital channels. My opinion is any insurer must be innovative and must find their own competencies to achieve sustainable profitable growth. The market is huge so a single digit market share can make an insurer in China efficient and viable. In the end, it is about product and services that Generali are providing for our customers, and there are many”.
Many Western insurers hire a local management team to operate in China. In terms of the pros and cons of this approach, Andre’s view is that “Western insurers must embrace local best practices and customs in order to have a chance to succeed in China. If we just tried to import something that may be working well somewhere else around the world into China without localisation, the chance to succeed will be very limited”.
It seems Generali has a two pronged strategy in China. The first is based on its shareholder CNPC resources, which provides enough business to sustain Generali’s efforts to expand online. The second is a digital platform that will provide an end to end solution for Generali policy holders in China, including customer acquisition, fulfillment and claims.