China Life Insurance is a huge legacy player, majority owned by the Chinese government. It is now the largest listed life insurer worldwide by market value, at US$151 billion, with businesses in life, health, and group policies.
But its traditional strengths – its vast agency network, its national reach, its legacy stemming back to the founding of the People’s Republic in 1949 – can look like weaknesses in the face of internet-based competitors, insurtechs, and savvy private operators.
The firm launched a new five-year plan in 2020, which it calls the Dingxing Project. China Life’s president, Su Hengxuan, outlined at an annual open meeting earlier today that there will be a renewed push on operational efficiency and using tech to improve sales and how the firm invests its assets. The company will attempt to balance growth among both its retail and wholesale customers.
Zhan Zhong, vice president and head of sales, says the firm is preparing to open its first online-only branch, noting that most underwriting and paperwork has already been digitized. This year the firm generated Rmb8 billion ($1.2 billion) in online sales, a figure that several executives touted as a good start.
China Life does not want to turn into a tech company. It wants to use tools to leverage its strengths and its heritage. “Being a state-owned enterprise does not mean being obsolete,” Zhan said.
Centralizing 30,000 offices
The big task is how to bring a level of standardization and centralization to the firm’s network of more than 30,000 offices, which oversee local agents and bancassurance relationships. The company has about 500 million customers.
In this regard, technology can be used from training staff to better management of sales teams, be they selling through agents, bank partners, or directly.
This includes using data to profile customers, design products, market online, and to manage its 2 million salespeople.
In the world of kung fu, speed is kingRuan Qi, China Life
The size of China Life would make this a challenge anyway, but it has to operate in diverse locales and ensure it is able to grow business in both rural and urban areas. As a state-owned enterprise, it has responsibilities to help rejuvenate low-income areas as well as sell to influential chairmen and presidents at big companies.
Move fast but don’t break anything
Ruan Qi, the Beijing-based firm’s vice president and chief technology officer, says to achieve these business goals, China Life has to move at a much faster pace.
“In the world of kung fu, speed is king,” he said. “We are such a huge company, this is not easy to deliver.”
His department is rolling out a number of initiatives to make the firm more agile and responsive, while also making it possible for its Beijing headquarters to better supervise and manage its 30,000 offices.
First has been a change in the legacy I.T. infrastructure. The company is not able to replace this old technology but it can operate differently. Technology is no longer the purview of the I.T. department but of operations.
This shift is made possible by creating a platform layer, just as in an internet company. The firm has now developed more than 170 APIs that it makes available internally for a variety of services. This is new.
Digitizing the operations among branches makes delivering services and managing teams more effective. The scale required is huge: Ruan says during peak hours every day, the platform has up to 4 million digital devices and terminals connected to its tech backbone – not just its three data centers, but its agent- and customer-focused platform for service delivery.
Being a state-owned enterprise does not mean being obsoleteZhan Zhong, China Life
Ruan says China Life has embraced open architecture, calling this his “core message”. Open architecture allows the company’s variety of databases, interfaces and standards to begin to interoperate, with the APIs plugging this into applications in real time.
“That’s the hallmark of this structure,” Ruan said. “If a team is used to a particular technology, they can still use it. Do what you’re comfortable with. The gain is that new technology can now be integrated, including A.I. and big data analytics.”
This open format, making data accessible across functions, is what will enable China Life to move more quickly.
New architecture for legacy systems
Behind this is a new approach to infrastructure.
First, China Life is moving more data to a hybrid cloud, partly on premise, and partly outsourced to vendors. For security reasons, most data resides within the company’s data centers. But the front end where the computing happens goes to public cloud, because of its ease to dial usage up and down, according to need.
“The strengths of hybrid cloud became apparent during the pandemic,” Ruan said.
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Second, the firm is making use of edge computing and lots of sensors (the Internet of Things). “Our people are connected to one another,” Ruan said. “Our objects are connected.”
He says the heart of China Life’s IoT infrastructure is a network of dedicated internet cables connecting all of its 30,000 offices. He says the company has expanded its bandwidth at relatively low cost.
Three years ago the firm had fewer than 4,000 dedicated lines, carrying only 30 gigabytes worth of bandwidth, for a telecom bill of around Rmb100 million. Today, he says the firm’s 30,000 lines can process up to 800 gigabytes – for only Rmb300 million. This is due to optimizing how connections are made and keeping the architecture lean.
What this means in practice is better management and awareness of what’s going on across the far-flung network. For example, the firm’s internal video conferencing app can host up to 20,000 people at the same time, all at HDTV quality.
“Who else can do that?” Ruan asked.
Ruan says by summer of 2021 China Life will have connected all of its offices to its data centers, which means it will be the data centers that manage them, not their local branch bureaucracies. Local workplaces will instead focus their own efforts at customer-facing digital needs. “They can focus on the application of data, not the management of data, thanks to the internet of things,” he said.
From a headquarters perspective, this is about harnessing big data to generate intelligence – what Ruan calls the intellectualization of data. While China Life is not an internet company, it does have decades’ worth of data on its 500 million customers, not to mention its 2 million salespeople who also create data. This is a treasure trove if China Life can organize this data properly.
From there Ruan is working on visualization tools, virtualization of the front end so users can work off the cloud, and socialization via digital collaboration and networking.