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《Asian Insurance Review》杂志对首席执行官蔡隆展的专访

 

Aegon- CNOOC: Building on a Strong Foundation

In huge market where size and reach is everything, Aegon-CNOOC has adopted a path less traveled, preferring to focus on a measured strategy of growth and building upon a strong base in Shanghai. This strategy has proved to be a phenomenal success, as today the company stands proud at 8th place of 22 foreign insurers in China's burgeoning life market, up from 14th place out of 19 insurers in 2004. In an exclusive interview with Asia Insurance Review, Mr. Ringo Choi, President and CEO of Aegon-CNOOC shares his assessment of the market and his key challenges going forward.


Drawing from his regional experience, Mr Choi who previously worked at AIA in Hong Kong and Nan Shan Life Insurance in Taiwan before moving to Shanghai in 2002 to head Aegon-CNOOC's operations, said in his assessment of the China market, that the situation is unprecedented.

“The insurance industry in China started in the 1980's and prior to that there was no commercial insurance. There is a very short history of insurance business. In Shanghai as of the end of 2004, there were only 18 life insurance companies. Today there are 27. In 2006, we expect more than40 players in the market,” he said.

The phenomenal expansion of the industry has placed immense pressure on the industry in terms of human resources to cope with the rapid growth in the market. Whilst expatriates from Taiwan, Hong Kong Malaysia and Singapore have helped fill management positions, Mr. Choi pointed out that the real expertise crunch lies in sales and operational staff.

At Aegon-CNOOC, a lot of attention and resources is being placed on human resource development. The company has several enrichment and training courses in place and their parent company, AEGON also assists in development of staff. In China, the company established a US$ 1 million education-fund and an insurance scholarship program at the School of Economics and Management of Tsinghua University and Shanghai Jiaotong University respectively.

The donations are used exclusively for scholarship, training and research expense, and other insurance-relevant activities. In addition, a large-scale Multi-functional Video Center equipped with a wide range of hi-tech facilities has been built, offering systematic training to foster high quality agents.


Patience Paid Off

On growing balancing act of growing in size, while at the same time being financially stable, Mr Choi stressed that this was very important, but admitted that at times it was difficult to balance the two.

“At Aegon-CNOOC, we focus on these two key areas. We are growing strong and moving fast. It has been a priority right from the start – from our first year of operation – to ensure that we built a solid foundation in Shanghai to expand upon.”

Citing this strategy as a key element to the company's success, Mr Choi explained that the company spent two years in Shanghai establishing a strong foothold in the market as well as creating brand awareness, before exploring to other parts of the country –longer than their competitors who opened branches out within months. After two years in Shanghai, Aegon-CNOOC opened branches in Beijing and Jiangsu.

The patience paid off handsomely. In the first month of operation, the Beijing Branch wrote more than 10 million yuan of premium income and has maintained this level of income since.

JV Partnerships Work

In a market where partnerships are everything, Mr Choi said that finding the perfect match in CNOOC, was another key factor in the company's success. “We spent a lot of time finding the right partner, and we are right for each other as we see eye to eye. Our smooth partnership and similar business philosophies is one of the reasons why subsequent development in the country has been smooth.”

He added that it is important that for joint ventures there must be a consensus and no majority shareholder. One of the key benefits for the company has been the ability to successfully leverage on the expertise of its parent Aegon in the USA, where it is a leader in bancassurance and telemarketing. Aegon-CNOOC implemented a similarly successful strategy in China and today more than 50% of business is generated from bancassurance.

Call for Greater Self-Regulation

On the issue of regulation, Mr Choi applauded CIRC's efforts in liberalising the market and encouraging growth, noting that a lot of recently introduced guidelines and regulations have been geared to this objective.

Recently the CIRC eased investment guidelines, raising corporate bond limits from 20% to 30% and allowed larger insurers to invest overseas, a move regarded as a big step forward in CIRC conservative regulatory style.

In a call for further relaxation of rules on real estate investment, Mr Choi hoped that the CIRC would soon follow the steps of its regional counterparts and allow foreign insurers to invest in real estate. “This will further enhance our investment opportunities and will also serve as a boost to the local property market, and encourage the development of more projects,” he said.

On the industry front, he urged his counterparts to adopt a practice of self-regulation, and not rely completely on the CIRC to drive growth and lead the way.

“The history of the industry is very short and we are still at the very initial stage of development. We are building reputation and credibility and life insurance is tightly regulated. The challenge for the industry is to be more self disciplined in areas of pricing, investment and selling. We cannot rely on CIRC to implement guidelines, it must come from the industry and there has to be some form of self-discipline,” he said, warning that the young insurance industry in China could not afford to have a high-profile setback as the ramifications to the credibility of the industry would be damaging.

2006-01