Source: "China Insurer" magazine under Manager Media. Hetai Life uses the three-wheel drive of investment, liabilities and internal management to continuously improve the accuracy of product pricing, gradually establish independent and controllable sales channels, and provide use

Source: Manager Media's "China Insurer" magazine

Hetai Life uses the three-wheel drive of investment, liabilities and internal management to continuously improve the accuracy of product pricing and gradually establish independent and controllable sales channels to provide users with high cost performance. The product. At the same time, the company insists on digital transformation to reduce costs and increase efficiency, and blazes a new path of differentiation in the homogeneous competition landscape in the industry.

How can small and medium-sized life insurance companies find a path to differentiated competition? Hetai Life Insurance’s attempt shows that this road is full of thorns.

Hetai Life Insurance was established on January 24, 2017, by CITIC Guoan Co., Ltd., Beijing Juranzhijia Investment Holding Group Co., Ltd., Shenzhen Golden Century Engineering Industrial Co., Ltd. and Beijing Yingke Bicheng Technology Co., Ltd. (hereinafter referred to as "Yingke Bicheng"). 8 companies including "Bicheng") initiated the establishment, with a registered capital of 1.5 billion yuan. Since Yingke Bicheng is a wholly-owned subsidiary of Tencent, the market also regards it as a Tencent-based Internet insurance company, and it has attracted much attention from the outside world since its debut.

Since Hetai Life's approved business area is in Shandong, the company established an Internet channel strategy at the beginning of its establishment, focusing on the positioning of "building an innovative life insurance company with obvious Internet advantages and outstanding value creation capabilities" in the field of Internet insurance. Through intensive efforts, we achieved outstanding results of underwriting 600,000 people within 5 days of opening, and the number of users exceeded one million within 1 month. In 2021, Hotai Life's Internet channel premiums exceeded 1.1 billion yuan, of which value-based long-term regular premiums accounted for 84%.

Although Hotai Life Insurance’s insurance business income exceeded the 1 billion yuan mark in its third year of establishment, as of 2021, the company has not yet gone through the loss period. According to the solvency report, Hotai Life lost 124 million yuan in 2021, and has accumulated losses of nearly 500 million yuan in the past five years, highlighting the difficulty of small and medium-sized insurance companies in breaking through.

Focus on creating value in online channels

In the five years since its establishment, Hotai Life Insurance has carefully refined its featured products based on the characteristics of online channels, and successively launched “Super Mario Critical Illness Insurance” (Hetai Ankang Wuyou Critical Illness Insurance, Hetai Lexiang Products such as worry-free critical illness insurance), "Jinduo multi-year gold insurance" (Hetai Jingtaiying annuity insurance "universal"), "increasing multi-incremental whole life insurance" (Hetai Xin Xiangying whole life insurance) once became the industry Hotly discussed "Internet celebrity" products.

Faced with the tide of digital transformation, Hotai Life Insurance continues to explore the implementation path of insurance technology's "people-oriented, quality and efficiency improvement" in small and medium-sized companies, and is constantly committed to improving customers' digital service experience. By introducing technological means, it actively explores innovative models and strives to Provide consumers with products and services "at their fingertips".

Currently, the company uses "Hetai Life Insurance WeChat Official Account" as a one-stop insurance service platform to realize the function of serving omni-channel customers. The electronic rate of the company's various insurance services exceeds 99%, and customers can enjoy all kinds of insurance services through a mobile phone. policy services. For small claim applications within 5,000 yuan, Hotai Life promises to complete the acceptance and review within 3 hours.

is one of the first insurance companies to cooperate with Tencent WeChat Pay. In March 2021, Hetai Life Insurance connected the WeChat card package and the online claims system. Customers who purchased health insurance products and were out of danger can directly pay through Hotai Life Insurance's WeChat official account inputs corresponding information, eliminating the tedious steps of downloading, printing, or storing photos of bills and then uploading them. It has actively tried to open up the medical and insurance payment systems to "make claims easier." For the elderly who have difficulty using smart technology, Hotai Life has also carefully designed and launched a series of elderly-friendly service initiatives, established a rapid handling mechanism for elderly complaints, and reflected the value of humanized and personalized services through technological means.

Creates a flagship product "Solo Advance"

Relying on the resources of shareholders such as CITIC Guoan and Tencent, Hotai Life is committed to building an "innovative life insurance company with obvious Internet advantages and outstanding value creation capabilities." Public information shows that the company's business operations include life insurance and annuity insurance, health insurance, accident insurance, participating insurance, universal insurance and reinsurance business of the above-mentioned businesses.

Judging from the income structure of the insurance business disclosed by Xintai Life, participating insurance is the "contributor" to the company's expansion, and its proportion in the business continues to increase. The

annual report shows that in 2018, the insurance business income of Hotai Life Participating Insurance was 13 million yuan, accounting for 1.93%; in 2019, the business income increased to 937 million yuan, accounting for 88.34%; by 2020, participating insurance The insurance business income was 1.645 billion yuan, a year-on-year increase of 75.56%, and the proportion further increased to 91.52%.

Specifically, in 2020, the company's top five insurance products in terms of original insurance premium income are in order: "Hetai Yunlan Insurance (dividend type)", "Hetai Baby Education Annuity Insurance", "Hetai Ankang Wuyou Insurance" Critical illness insurance", "Hetai Anli annuity insurance", "Hetai Xin Xiangying whole life insurance". In 2020, the company's top three insurance products with the highest new payment premiums for policyholders' investment funds are "Hetai Wealth Wenying Annuity Insurance (Universal Type)", "Hetai Jingtaiying Annuity Insurance (Universal Type)", "Hetai Wealth Wenying Annuity Insurance (Universal Type)", Tai will be blessed throughout life (universal type)."

Looking at the original premium income, the income from one product, Hetai Yunlai Endowment Insurance (dividend type) alone, reached 1.639 billion yuan, accounting for 92.26% of the total income of the top five products; from the new payment of policyholders’ investment funds Judging from the situation, Hetai Wealth Wenying Annuity Insurance (universal type) contributed 904.5 million yuan, accounting for 83.37% of the total payment of the top three universal products.

Obviously, these two products are the "stars" that the company is focusing on polishing.

Growth is slowing down and operations are under pressure

From 2017 to 2019, Hotai Life achieved insurance business income of 153 million yuan, 660 million yuan, and 1.061 billion yuan respectively, and operating income of 214 million yuan, 767 million yuan, and 1.234 billion yuan respectively. In three years, both insurance business income and operating income exceeded one billion yuan. In 2020, the company's insurance business income soared to 1.797 billion yuan, an increase of 69.37% from the previous year. However, this trend came to an abrupt end in 2021, and the company's insurance business income fell back to 1.122 billion yuan, a decrease of 37.56% from the previous year. (Table 1).

In response to the decline in insurance business income, Hotai Life stated that in 2021, the company will actively promote the transformation of channels and business structure, actively control the sales of large-scale products, and pay more attention to the development and sales of value-based and regular products. "Regular premium income increased 16.7 times year-on-year; the proportion of new single premiums in new single scale premiums increased to 43.5%, the business structure improved significantly, and business transformation achieved positive results."

From the perspective of profitability, from 2017 to 2020, and Thai Life's net losses were 134 million yuan, 77.6257 million yuan, 93.5462 million yuan and 62.3641 million yuan respectively. The loss in 2021 suddenly enlarged to 124 million yuan, nearly double the loss of the previous year (Table 2).

From Hotai Life’s perspective, the company is still in the early stages of development and has been increasing investment to promote business development. Financial losses are the result of the superposition of factors such as business development investment and capital market fluctuations.

What deserves more attention is that Hetai Life's solvency continues to decline. At the end of the first quarter of 2017, the company's core and comprehensive solvency adequacy ratios were both as high as 8544.50%. At the end of the fourth quarter, both core and comprehensive solvency adequacy ratios dropped to 739.43%. In the following three years, both indicators continued to decline. In 2018, 2019, and 2020, they were 25.85%, 283.08%, and 233.00% respectively. In 2021, they further fell to 155.58%, far away from the "150% tolerance." Goal" is only one step away.

Moreover, according to the China Banking and Insurance Regulatory Commission, the average comprehensive solvency adequacy ratio of 179 insurance companies at the end of the fourth quarter of 2021 was 232.1%, and the average core solvency adequacy ratio was 219.7%. It can be seen that although these two indicators of Hotai Life meet regulatory requirements, they are far lower than the industry average.

Hu Feng, interim head and deputy general manager of Hetai Life Insurance, said that in 2022, it will continue to explore a differentiated, characteristic and high-quality development model. Facing the challenges of transformation, we will adhere to the three-wheel drive of investment, liabilities, and internal management, work together to reduce costs and increase efficiency, improve the company's self-development capabilities and core competitiveness, and blaze a new path of differentiation in the homogeneous competition landscape of the industry. The company will adhere to digital transformation, take advantage of the company's early start in Internet and digitalization, improve the accuracy of product pricing, gradually establish independent and controllable sales channels, and provide the society with good and cost-effective products.

"Reducing management costs and internal losses is the only way for small and medium-sized insurance institutions to survive." Hu Feng believes.