CorporateCorporate PresentationPresentation
TheThe InsuredInsured PathPath toto ChinaChina 通往中國的保險大道通往中國的保險大道
March 2002
ChinaChina InsuranceInsurance InternationalInternational HoldingsHoldings CompanyCompany LimitedLimited ContentsContents
ALLIANCEALLIANCE WITHWITH ICBCICBC (ASIA)(ASIA)
CIIHCIIH CORPORATECORPORATE STRUCTURESTRUCTURE
FINANCIALFINANCIAL SUMMARYSUMMARY ReinsuranceReinsurance BusinessBusiness ReviewReview andand OutlookOutlook
FUTUREFUTURE PLANSPLANS && PROSPECTSPROSPECTS FutureFuture PlansPlans && ProspectsProspects CIIHCIIH OpportunityOpportunity inin ChinaChina ReinsuranceReinsurance MarketMarket
TAITAI PINGPING LIFELIFE
TAITAI PINGPING INSURANCEINSURANCE
2 ALLIANCEALLIANCE WITHWITH ICBCICBC (ASIA)(ASIA) SummarySummary ofof termsterms
IndustrialIndustrial andand CommercialCommercial BankBank ofof ChinaChina (Asia)(Asia) LimitedLimited (“ICBC(“ICBC Asia”),Asia”), aa subsidiarysubsidiary ofof IndustrialIndustrial andand CommercialCommercial BankBank ofof ChinaChina (“ICBC”),(“ICBC”), acquiredacquired 24.9%24.9% interestinterest inin TaiTai PingPing InsuranceInsurance ofof which:which: zz 12.45%12.45% fromfrom CICLCICL zz 12.45%12.45% fromfrom CIIH’sCIIH’s whollywholly ownedowned BVIBVI companycompany ICBCICBC (Asia)(Asia) hashas beenbeen grantedgranted step-upstep-up optionoption toto increaseincrease itsits totaltotal interestinterest upup toto 49%49% TotalTotal considerationconsideration ofof approximatelyapproximately HK$176,179,246HK$176,179,246 will will bebe paidpaid inin cashcash forfor 24.9%24.9% interestinterest TheThe priceprice hashas beenbeen determineddetermined afterafter arm’sarm’s lengthlength negotiationsnegotiations
4 WhyWhy ICBCICBC AsiaAsia
BancassuranceBancassurance hashas shownshown strongstrong signssigns ofof successsuccess inin ChinaChina
CIIHCIIH isis convincedconvinced thatthat babancassurancencassurance willwill bebe thethe majormajor growthgrowth engineengine ofof bothboth TPITPI andand TPLTPL
TPITPI andand TPLTPL willwill benefitbenefit frfromom thethe well-establishedwell-established networksnetworks andand resourcesresources ofof ICICBCBC inin ChinaChina andand createcreate anan exponentialexponential growthgrowth effecteffect withwith betterbetter profitability,profitability, lowerlower costcost andand risk,risk, higherhigher sustainabilitysustainability andand greatergreater marketmarket sharesshares
5 HowHow WeWe DoDo ItIt
FortisFortis addsadds world-classworld-class expertiseexpertise ICBCICBC providesprovides thethe bestbest nationwidenationwide networksnetworks
ChangeChange bankbank salessales modelmodel byby trainingtraining staffstaff Sales ProductivityProductivity linkedlinked rewardreward systemsystem toto motivatemotivate bankbank tellerstellers Force OrganiseOrganise tieredtiered bancassurancebancassurance salessales forceforce structurestructure
DesignDesign simplesimple products,products, preferablepreferable linkedlinked toto bankingbanking Products products,products, includingincluding homehome mortgage/carmortgage/car mortgagemortgage productsproducts BundleBundle productsproducts creativelycreatively
DevelopDevelop superiorsuperior relationshiprelationship managementmanagement skillsskills Roll Out DesignDesign andand deliverdeliver appropriateappropriate bank/issuerbank/issuer arrangementarrangement EstablishEstablish effectiveeffective partnershipartnershipp atat variousvarious levelslevels fromfrom headquartersheadquarters toto locallocal sub-branchessub-branches
6 ICBCICBC (Asia)(Asia)
LicencedLicenced bank bank inin HongHong KongKong
HongHong KongKong StockStock ExchangeExchange listedlisted companycompany (349.HK)(349.HK) withwith marketmarket capitalisationcapitalisation ofof HK$4.065HK$4.065 bbillionillion asas atat 2525 MarchMarch 20022002
75%75% ownedowned byby ICBCICBC
20012001 netnet earnings:earnings: HK$330HK$330 millionmillion
20012001 totaltotal assets:assets: HK$43,497HK$43,497 millionmillion
20012001 netnet tangibletangible assets:assets: HK$4,378HK$4,378 millionmillion
7 ICBCICBC
TheThe largestlargest commercialcommercial bankbank inin ChinaChina –– RMB4,300 RMB4,300 billionbillion inin totaltotal assetsassets inin 20012001 RankedRanked 213213 inin GlobalGlobal 500500 byby FortuneFortune inin 20012001 OverOver 30,00030,000 branchesbranches andand officesoffices TotalTotal deposits:deposits: RMB3,237RMB3,237 billionbillion TheThe seventhseventh largestlargest bankbank inin thethe worldworld inin termsterms ofof TierTier 11 CapitalCapital by by ““TheThe Banker”Banker” inin JulyJuly 20012001
8 CIIHCIIH CORPORATECORPORATE STRUCTURESTRUCTURE CIIHCIIH CorporateCorporate StructureStructure
China Insurance (PRC) The Public ICBC 100% 100% (including Swiss Fortis 100% (Asia) Re, Guangdong China Insurance Development Bank 24.9%24.9% (HK) as strategic Ming An investors) Insurance Co. 46.47%46.47% 37.12% (H.K.) Ltd. 37.12% 9.9%9.9% 6.51%6.51% 24.9%24.9%
100%100% 100%100% 25%25% 50.05%50.05% 30.05%30.05%
China Huatai Insurance Sino-Re Tai Ping Life Tai Ping International Agency & Reinsurance Insurance Co. Insurance Co. Reinsurance Consultant Co. Brokers Ltd. Ltd. Ltd. Co. Ltd. Ltd.
10 FINANCIALFINANCIAL SUMMARYSUMMARY 20012001 AnnualAnnual ResultsResults
20012001 20002000 ChangesChanges HK$'000HK$'000 HK$'000HK$'000 %%
TurnoverTurnover 830,392830,392 691,044691,044 20.220.2
ReinsuranceReinsurance underwritingunderwriting resultresult 2,4152,415 73,18073,180 -96.7-96.7
IncomeIncome fromfrom Ins.Ins. IntermediariesIntermediaries 11,61811,618 7,5927,592 53.053.0
OtherOther revenuerevenue && incomeincome 313,309313,309 71,07171,071 340.8340.8
AfterAfter taxtax profitprofit attributableattributable 230,229230,229 117,730117,730 95.695.6 toto shareholdersshareholders
EarningsEarnings perper shareshare 2323 centscents 1515 centscents
DividendDividend perper shareshare 55 centscents 44 centscents
12 InvestmentInvestment PortfolioPortfolio
TotalTotal investmentinvestment portfolioportfolio heldheld asas atat 3131 Dec,Dec, 20012001 amountedamounted toto HK$3,063HK$3,063 millionmillion
ListedListed UnitUnit TrustsTrusts && LoanLoan MutualMutual FundsFunds Investment Investment 1.4%1.4% 0.6%0.6% PropertiesProperties UnlistedUnlisted EquitiesEquities 3.7%3.7% 0.3%0.3%
ListedListed EquitiesEquities 6.8%6.8%
BondsBonds && FixedFixed IncomeIncome SecuritiesSecurities 39.4%39.4%
CashCash andand BankBank DepositsDeposits 47.8%47.8%
13 REINSURANCEREINSURANCE BUSINESSBUSINESS REVIEWREVIEW ANDAND OUTLOOKOUTLOOK 20012001 GrossGross PremiumPremium IncomeIncome byby GeographicalGeographical RegionRegion
RestRest ofof AsiaAsia 22%22%
HongHong KongKong && MacauMacau JapanJapan 41%41% 6%6%
PRCPRC 10%10%
RestRest ofof thethe WorldWorld 21%21%
15 LossLoss ImpactImpact fromfrom WTCWTC 911911 isis MildMild toto CIIHCIIH
GrossGross lossloss estimateestimate HK$140HK$140 millionmillion
NetNet lossloss estimateestimate (after(after reinsurancereinsurance recovery)recovery) HK$30HK$30 million,million, equivalentequivalent toto 4.4%4.4% ofof 20012001 retainedretained premiumpremium
NoNo long-taillong-tail casualtycasualty businessbusiness writtenwritten outsideoutside Asia,Asia, hence,hence, nono seriousserious deteriorationdeterioration onon WTCWTC 911911 lossloss estimateestimate anticipatedanticipated
16 OutlookOutlook
ReinsuranceReinsurance marketmarket conditionsconditions postpost WTCWTC
WTCWTC losseslosses acceleratedaccelerated andand steepenedsteepened the the upwardupward trendtrend inin pricingpricing
UnderwritersUnderwriters areare nownow lookinglooking forfor aa positivepositive returnreturn onon underwritingunderwriting givengiven thethe uncertainuncertain outlookoutlook onon investmentinvestment incomeincome
CoverageCoverage restrictedrestricted－－TerrorismTerrorism covercover generallygenerally excludedexcluded fromfrom non-non- marinemarine reinsurance,reinsurance, hencehence chanceschances havinghaving furtherfurther terrorismterrorism claimsclaims eliminatedeliminated
PricingPricing •• ReinsurersReinsurers tried tried toto imposeimpose raterate increasesincreases priorprior toto WTCWTC inin responseresponse toto adverseadverse fundamentalsfundamentals andand deterioratingdeteriorating resultresult •• RatesRates andand deductiblesdeductibles havehave increasedincreased acrossacross thethe boardboard •• RateRate increasesincreases varyvary widelywidely fromfrom 10%10% -- 15% 15% toto 200%200% -- 300% 300% dependingdepending onon classes,classes, marketsmarkets andand pastpast experienceexperience atat 20022002 renewalsrenewals •• InIn manymany locallocal markets,markets, commissionscommissions onon proportionalproportional contractscontracts reducedreduced despitedespite expectedexpected increasesincreases inin originaloriginal ratesrates andand profitabilityprofitability goinggoing forwardforward
AnAn immediateimmediate returnreturn toto softsoft marketmarket conditionsconditions lookslooks unlikelyunlikely
17 CIIH’sCIIH’s PerspectivePerspective inin 20022002 ReinsuranceReinsurance UnderwritingUnderwriting
DueDue toto withdrawalwithdrawal ofof certaincertain reinsurersreinsurers from from HongHong KongKong andand AsianAsian markets,markets, CIRe’sCIRe’s positionposition inin thethe regionregion strengthenedstrengthened
StrongStrong growthgrowth ofof reinsurancereinsurance premiumpremium 20%20% toto 30%30% expectedexpected inin 20022002
BetterBetter underwritingunderwriting cashcash flowflow anticipatedanticipated
20022002 wouldwould bebe oneone ofof thethe bestbest underwritingunderwriting yearsyears inin aa decadedecade providedprovided nono abnormalabnormal megamega claimsclaims
18 FUTUREFUTURE PLANSPLANS && PROSPECTSPROSPECTS FutureFuture PlansPlans && ProspectsProspects
BecomeBecome aa leadingleading insurainsurance-relatednce-related financialfinancial conglomerateconglomerate inin thethe PRCPRC
EstablishEstablish credibilitycredibility asas aa pipioneeroneer andand innovatorinnovator inin thethe PRCPRC insuranceinsurance marketmarket toto inintegratetegrate multiplemultiple lineslines ofof insuranceinsurance withwith assetasset managementmanagement businessbusiness
StrategicStrategic PrioritiesPriorities •• ExpandExpand reinsurancereinsurance businessbusiness inin thethe PRCPRC •• DevelopDevelop lifelife insuranceinsurance inin thethe PRCPRC throughthrough TaiTai PingPing LifeLife •• DevelopDevelop non-lifenon-life insuranceinsurance inin thethe PRCPRC throughthrough TaiTai PingPing InsuranceInsurance
20 CIIHCIIH OpportunityOpportunity inin ChinaChina ReinsuranceReinsurance MarketMarket
PresentPresent 20%20% compulsorycompulsory reinsurancereinsurance cessioncession toto ChinaChina ReRe onon everyevery generalgeneral insuranceinsurance policypolicy willwill bebe reducedreduced byby 5%5% aa yearyear fromfrom 20032003 onwardonward andand willwill notnot bebe requiredrequired byby 2006,2006, accordingaccording toto promisepromise mademade byby ChineseChinese GovernmentGovernment toto WTOWTO
LessLess spendingsspendings on on compulsorycompulsory cessioncession enableenable insurersinsurers toto buybuy moremore “necessary”“necessary” reinsurance reinsurance
StricterStricter supervisionsupervision onon insuranceinsurance mamarketrket byby CIRCCIRC relatingrelating toto solvencysolvency marginmargin requirementrequirement willwill promotepromote demanddemand forfor reinsurancereinsurance whichwhich cancan serveserve asas supplementarysupplementary capitalcapital
ListingListing planplan ofof insurersinsurers promptsprompts insurersinsurers toto betterbetter underwritingunderwriting risk risk controlcontrol byby buyingbuying adequateadequate reinsurancereinsurance
FeasibilityFeasibility studystudy ofof openingopening CIReCIRe ShanghaiShanghai BranchBranch isis beingbeing donedone •• InitialInitial responseresponse fromfrom authorityauthority isis encouragingencouraging •• AA branchbranch officeoffice inin ShanghaiShanghai willwill enhanceenhance marketingmarketing statusstatus inin ChinaChina •• OnOn thethe spotspot serviceservice toto clientsclients willwill bebe possiblepossible
21 TAITAI PINGPING LIFELIFE INSURANCEINSURANCE RobustRobust IndustryIndustry GrowthGrowth inin PRCPRC LifeLife InsuranceInsurance MarketMarket
160160 1990-2001 CAGR = 34% 142142 140140
120120 100100 100100 8787
8080 7575 61
Premium writtten (RMB bn) (RMB writtten Premium 61 Premium writtten (RMB bn) (RMB writtten Premium 6060
36 4040 36 2424 2626 Life Insurance Insurance Life
Life Insurance Insurance Life 20 20 1111 1010 66 77 00 19901990 1991 1991 1992 1992 1993 1993 1994 1994 1995 1995 1996 1996 1997 1997 1998 1998 1999 1999 2000 2000 2001 2001
Source:Source: CIRCCIRC
23 StatisticsStatistics ofof LifeLife InsuranceInsurance PremiumPremium inin PRCPRC
Total Life and LifeLife PremiumPremium AnnualAnnual AsAs %% ofof LifeLife andand Total Life and YearYear Non-Life Premium (RMB(RMB Billion)Billion) GrowthGrowth Non-LifeNon-Life PremiumPremium Non-Life Premium (RMB(RMB Billion)Billion)
19901990 5.705.70 32.02%32.02% 17.8017.80 19911991 7.177.17 25.79%25.79% 30.00%30.00% 23.9023.90 19921992 10.5510.55 47.14%47.14% 27.98%27.98% 37.7037.70 19931993 10.0110.01 -5.12%-5.12% 18.99%18.99% 52.7052.70 19941994 23.7323.73 137.06%137.06% 38.03%38.03% 62.4062.40 19951995 25.7325.73 8.43%8.43% 35.01%35.01% 73.5073.50 19961996 35.9735.97 39.80%39.80% 41.97%41.97% 85.7085.70 19971997 60.9360.93 69.39%69.39% 56.00%56.00% 108.80108.80 19981998 74.8274.82 22.80%22.80% 60.00%60.00% 124.70124.70 19991999 87.2587.25 16.61%16.61% 62.59%62.59% 139.40139.40 20002000 99.7599.75 14.33%14.33% 62.50%62.50% 159.60159.60 20012001 142.40142.40 42.76%42.76% 67.52%67.52% 210.90210.90
ExchangeExchange RateRate US$1US$1 == 8.38.3 RMBRMB
24 KeyKey GrowthGrowth DriversDrivers inin LifeLife InsuranceInsurance
FurtherFurther changechange inin China’sChina’s economiceconomic systemsystem boostsboosts demanddemand
HighHigh savingsaving raterate andand urbaniurbanization,zation, coupledcoupled withwith modestmodest insuranceinsurance penetrationpenetration ratesrates
RisingRising insuranceinsurance awarawarenesseness andand customercustomer sophisticationsophistication
LowerLower interestinterest raterate enenvironmentvironment andand lacklack ofof investmentinvestment productsproducts andand channelschannels
25 ForeignForeign PresencePresence && WTOWTO ImpactImpact onon LifeLife InsuranceInsurance
ThereThere areare 88 foreignforeign and and Sino-foreignSino-foreign JVJV lifelife insuranceinsurance companiescompanies currentlycurrently operatingoperating inin China.China. TheyThey havehave remainedremained largelylargely insignificantinsignificant playersplayers limitedlimited inin marketmarket sharesshares andand geographicgeographic presence.presence. UnderUnder WTO,WTO, China’sChina’s insuranceinsurance marketmarket willwill progressivelyprogressively openopen overover thethe nextnext 55 years.years. Ownership:Ownership: ForeignersForeigners allowedallowed 50%,50%, andand willwill bebe allowedallowed toto havehave effectiveeffective managementmanagement Location:Location: FiveFive citiescities Shanghai,Shanghai, Guangzhou,Guangzhou, Dalian,Dalian, Shenzhen,Shenzhen, FoshanFoshan openopen onon accession.accession. AA furtherfurther 1010 (incl(includinguding Beijing)Beijing) willwill openopen afterafter 22 years.years. AllAll ChinaChina mainlandmainland afterafter 33 years.years. Product:Product: ForeignForeign companiescompanies limitedlimited toto certaincertain typestypes ofof productproduct duringduring firstfirst 33 years,years, (individual(individual insurance,insurance, notnot groupgroup lifelife insurance).insurance). Thereafter Thereafter thethe marketmarket willwill bebe whollywholly opened.opened. TheThe entryentry ofof aa growinggrowing numbernumber ofof largelarge internationalinternational insurersinsurers willwill improveimprove thethe qualityquality ofof China’sChina’s insuranceinsurance market.market.
26 CompetitiveCompetitive LandscapeLandscape
ThreeThree unrestrictedunrestricted nationalnational playersplayers dominatedominate thethe currentcurrent lifelife marketmarket withwith aa combinedcombined marketmarket shareshare ofof approximatelyapproximately 96%96% AIAAIA andand sevenseven smallsmall Sino-foreignSino-foreign JVJV lifelife companiescompanies combinedcombined accountaccount forfor lessless thanthan 2%2% ofof thethe marketmarket
2001 Market Foreign Number of Number of Company Premium Income Share Participation Branches Agents & Staff Unrestricted License China Life US$9,818 MN 57.02 % na 45 318,600 Ping An 4,836 28.08 14 % 35 118,890 China Pacific 1,626 9.44 na 64 60,000 New China Life 278 1.61 24.9 10 4,115 Tai Kang Life 188 1.09 24.9 11 6,450
Restricted License AIA 169 0.98 100 3 8,100 Manulife-Sinochem Life 33 0.2 49 1 1,900 Pacific-Aetna Life 24 nm 49 1 1,556 Axa-Minmetals 7.7 nm 50 1 780 Allianz Dazhong Life 6.5 nm 51 1 685 China Life Colonial Life 0.7 nm 49 1 135 Citic Prudential 13 nm 49 1 580 John Hancock Tian An nm nm 49 1 90
27 StrategyStrategy && FocusFocus
Develop Critical Mass on A National Scale Effectively Design and Price Products
Industry still in a “land grab” stage Attain market leadership in product
Unrestricted license buys significant lead innovation time ahead of competitive entrants Use efficient pricing to enhance following WTO profitability and competitiveness
Company aims to achieve critical mass Develop strong in-house actuarial and enhance competitive positioning capabilities and draw on the expertise from the strategic partner
Use Technology Efficiently Maximize Investment Portfolio Returns
Intelligent use of technology enhances Easing of investment restrictions and operating efficiency and customer service increasing scale will highlight importance capability as an earnings driver
Develop IT platform characterized by a Leverage off specialized services to centralized data processing, web-based maximize returns accessibility and open system architecture
28 PlannedPlanned RollRoll OutOut
20012001 4Q:4Q: ShanghaiShanghai
20022002 1Q:1Q: Beijing,Beijing, *Guangzhou*Guangzhou andand *Chengdu*Chengdu
ByBy 20022002 4Q:4Q: *Nanjing,*Nanjing, *Jinan,*Jinan, *Hangzhou,*Hangzhou, *Shengyang,*Shengyang, Zhengzhou,Zhengzhou,
2003:2003: *Chongqing,*Chongqing, *Fuzhou,*Fuzhou, *Wuhan,*Wuhan, *Shijiazhuang,*Shijiazhuang, *Tianjin,*Tianjin, *Changsha,*Changsha, Dalian,Dalian, QingdaoQingdao
2004:2004: *Hefei,*Hefei, *Nanchang,*Nanchang, *Xian,*Xian, *Kunming,*Kunming, *Nanning,*Nanning, *Haerbin,*Haerbin, *Taiyuan*Taiyuan Jilin, Inner Mongolia, Guizhou, Hainan, Gansu, 20052005 –– 2006: 2006: Jilin, Inner Mongolia, Guizhou, Hainan, Gansu, NingxiaNingxia and and XinjianXinjian
** :: CapitalCapital ofof thethe provinceprovince
29 ProjectionProjection OutlineOutline ofof 2002:2002: BusinessBusiness DevelopmentDevelopment
Individual Life Group Life Bancassurance
• Business project: 80M RMB • Business project: 528M RMB • Business project: 530M RMB • Development strategy: focus • Development strategy: focus • Development strategy: focus on developing top agent on developing top agent on developing top agent group group group • Steps to carry out: • Steps to carry out: • Steps to carry out: - optimize agency - build organization frame - strengthen compensation - standardize the internal communication to bank network - strengthen recruitment management procedure of new entrant - improve distribution - improve the quality and effect of advertisement - strengthen business channel management - promote distribution - strengthen the innovation of business - improve the quality and group management efficiency of service - design and distribute - increase the quality and - set up high production advanced product in the efficiency of service group market
30 TAITAI PINGPING INSURANCEINSURANCE StatisticsStatistics ofof Non-LifeNon-Life InsuranceInsurance PremiumPremium inin PRCPRC
Non-Life Total Life and Annual As % of Life and Annual Year Premium Non-Life Premium Growth Non-Life Premium Growth (RMB Billion) (RMB Billion)
1990 12.10 67.98% 17.80 1991 16.72 38.18% 69.96% 23.90 34.27% 1992 27.13 62.26% 71.96% 37.70 57.74% 1993 42.67 57.28% 80.97% 52.70 39.79% 1994 38.71 -9.28% 62.04% 62.40 18.41% 1995 47.78 23.43% 65.01% 73.50 17.79% 1996 49.68 3.98% 57.97% 85.70 16.60% 1997 47.87 -3.64% 44.00% 108.80 26.95% 1998 49.88 4.20% 40.00% 124.70 14.61% 1999 52.13 4.51% 37.40% 139.40 11.79% 2000 59.84 14.79% 37.49% 159.60 14.49% 2001 68.54 14.54% 32.50% 210.90 32.14%
32 KeyKey GrowthGrowth DriversDrivers
RisingRising numbernumber ofof motormotor –– motor motor insuranceinsurance accountsaccounts forfor 60%60% ofof totaltotal industryindustry premiumspremiums
IncreasingIncreasing privateprivate ownershipownership ofof motormotor vehiclesvehicles andand propertiesproperties
RestructuringRestructuring ofof SOEs,SOEs, whichwhich mostlymostly self-insureself-insure atat presentpresent
CatatrophicCatatrophic risks risks suchsuch asas floods,floods, windstormswindstorms andand earthquakesearthquakes areare currentlycurrently underinsuredunderinsured oror notnot insured.insured. DemandDemand forfor insuranceinsurance againstagainst suchsuch risksrisks willwill increaseincrease overover thethe nextnext fewfew yearsyears
InsuranceInsurance ofof majormajor infrastructureinfrastructure projectsprojects
TransportationTransportation insuranceinsurance forfor bothboth exportsexports andand importsimports
33 CompetitionCompetition LandscapeLandscape
FourFour unrestrictedunrestricted nationalnational playersplayers dominatedominate thethe currentcurrent generalgeneral insuranceinsurance marketmarket withwith aa combinedcombined marketmarket shareshare ofof overover 97%97% AIUAIU andand otherother fourfour foreignforeign companiescompanies combinedcombined accountaccount forfor lessless thanthan 1%1% ofof thethe marketmarket
Premium Market Total Auto Non - Loss Expense Acquisition Company Licence Income Marine Share Assets Mobile Marine Ratio Ratio Ratio in 2000 (US$mm) (%) (US$mm) (%) (%) (%) (%) (%) (%) PICC National 5,662 77.05% 5,700 62% 30% 8% 53.15% 24.28% 6.60% China Pacific National 827 11.26% 3,104 61% 32% 7% 46.34% 19.58% 6.20% Ping An National 584 7.95% 7,764 58% 36% 6% 44.14% 13.85% 5.50% Hua Tai National 57 0.78% 597 65% 15% 20% 64.34% 29.54% 8.20% Da Zhong Regional 41 0.56% 86 61% 32% 7% 38.42% 21.41% 21.41% Xinjiang Regional 38 0.51% 114 Tian An Regional 32 0.42% 196 74% 22% 4% 38.26% 29.32% 1.20% Sinosafe Regional 36 0.48% 53 70% 29% 1% 27.89% 28.84% 4.58% AIU Foreign 21 0.28% 43 Ming An Foreign 18 0.25% 28 Winterthur Foreign 11 0.15% 19 Yong An Regional 10 0.14% 51 66% 32% 2% 29.38% 33.40% 4.75% Tokio Marine & Fire Foreign 9 0.13% 26 RSA Foreign 3 0.04% 9
Total 7,349 17,790
Source:Source: 20012001 YearbookYearbook ofof China’sChina’s InsuranceInsurance 34 WTOWTO ImpactImpact
OwnershipOwnership ForeignForeign insurersinsurers willwill bebe allowedallowed toto openopen itsits branches/officesbranches/offices oror have have aa maximummaximum ofof 51%51% ownershipownership inin non-lifnon-lifee insurerinsurer jointjoint ventureventure onon accession,accession, risingrising toto 100%100% afterafter twotwo years;years; wholly-ownedwholly-owned subsidiarysubsidiary allowedallowed afterafter twotwo yearsyears
LocationLocation FiveFive citiescities (Shanghai,(Shanghai, GuGuangzhou,angzhou, Dalian,Dalian, ShenzhShenzhenen and and Foshan)Foshan) willwill bebe openedopened onon accession.accession. AnotherAnother tenten cities,cities, includingincluding Beijing,Beijing, willwill open open afterafter twotwo years.years. AllAll ofof ChinaChina willwill openopen afterafter threethree yearsyears
ScopeScope ofof businessbusiness ForeignForeign insurersinsurers willwill bebe ableable toto writewrite onlyonly certaincertain typestypes ofof businessbusiness duringduring thethe firstfirst twotwo yearsyears afterafter accession:accession:-- property, property, marine,marine, liability,liability, bondbond insuranceinsurance andand insuranceinsurance onon foreignforeign investedinvested enterprises.enterprises. AfterAfter twotwo years,years, foreignforeign insurersinsurers willwill bebe ableable toto writewrite allall typestypes ofof businessbusiness exceptexcept statutorystatutory insuranceinsurance (such(such asas momotortor thirdthird partyparty liabilityliability insurance)insurance)
35 BusinessBusiness StrategiesStrategies
ProvideProvide facilitatingfacilitating && customizedcustomized servicesservices toto clientsclients
AdoptAdopt low-cost,low-cost, high-efficiencyhigh-efficiency marketingmarketing strategystrategy
AttractAttract andand retainretain talenttalent withwith attractiveattractive corporatecorporate cultureculture andand rewardreward systemsystem
CentralizationCentralization ofof datadata managementmanagement
DifferentiateDifferentiate withwith superiorsuperior servicesservices andand innovativeinnovative productsproducts
36 ProductProduct FocusFocus
MajorMajor productsproducts zz MassMass products:products: motormotor andand propertyproperty zz MajorMajor profitprofit sources:sources: motor,motor, property,property, cargocargo transport,transport, building/constructionbuilding/construction insurancesinsurances zz SpecialSpecial risks:risks: nuclearnuclear power,power, tunneltunnels,s, bridges,bridges, aircraftaircraft andand satellitesatellite zz LimitedLimited development:development: marinemarine hullhull
KeyKey directionsdirections ofof productproduct developmentdevelopment zz HouseholdHousehold InsuranceInsurance zz MortgageMortgage GuaranteeGuarantee zz LiabilityLiability InsuranceInsurance
37 DistributionDistribution ChannelsChannels
EmphasisEmphasis onon directdirect sales,sales, agencyagency distributiondistribution andand branchbranch expansionexpansion –– particularly particularly atat thethe initialinitial stagestage
Cross-sellingCross-selling throughthrough bankingbanking networks,networks, suchsuch asas ICBCICBC
OtherOther channelschannels willwill bebe testedtested andand exploredexplored zz PostPost OfficeOffice zz BrokersBrokers zz On-lineOn-line
ProductProduct typestypes willwill bebe matchedmatched withwith appropriateappropriate channelschannels
38 OrganisationOrganisation
HeadquarteredHeadquartered inin ShenzhenShenzhen HubHub (provincial(provincial branches)branches) andand be-spokebe-spoke (sub-branches)(sub-branches) networknetwork
Centralized Functions
Product development Senior management training Branding and marketing Advanced agent training Investment management Senior branch management appointment IT and customer database Processing of large-sum claims Treasury Risk management/Reinsurance
39 ManagementManagement
CompanyCompany hashas mademade keykey managementmanagement hireshires
ManagementManagement teamteam hashas aa highlyhighly relevantrelevant tracktrack recordrecord zz InvolvementInvolvement inin PRCPRC generalgeneral insuranceinsurance businessbusiness sincesince 1980s1980s
DrivingDriving forceforce behindbehind TPI’sTPI’s businessbusiness planplan
MotivatedMotivated andand incentivizedincentivized
40 PlannedPlanned RollRoll OutOut
20022002 1Q:1Q: Shenzhen,Shenzhen, Guangzhou,Guangzhou, Shanghai,Shanghai, BeijingBeijing
20022002 4Q:4Q: Wuhan,Wuhan, HanzhouHanzhou
2003:2003: *Zhenzhou,*Zhenzhou, *Nanjing,*Nanjing, Dalian,Dalian, *Chengdu,*Chengdu, *Tianjin,*Tianjin, Qingdao,Qingdao, ChongqingChongqing
2004:2004: *Shijiazhuang,*Shijiazhuang, *Xian,*Xian, *Changsha,*Changsha, *Kunming,*Kunming, *Hefei,*Hefei, *Fuzhou,*Fuzhou, *Jinan*Jinan
** :: CapitalCapital ofof thethe provinceprovince
41 OPENOPEN FORUMFORUM