What opportunities do you see in China? What is Allianz’ plan in China?
Bauer: For Allianz, China is a key strategic market and a must. Over the past decade, China has led the world in insurance premium growth, with a compound annual growth rate of 26.5 percent. This is the year on year growth in average over the last few years. The rapidly growing insurance industry in China provides great opportunity in many areas, including motor, life, pension and health protection.
Nestmann: Retail business, including motor and Travel Insurance and Personal Accident, are full of growth opportunities. Motor business is an important source of premiums. The market volume is 50 billion US dollars - the largest in the world! About 45,000 cars are sold every day. Last year the mandatory third-party motor liability insurance sector was opened to foreign insurers. Since then, foreign insurers have been able to provide the whole spectrum of motor products to customers.
In a market where many players are focused on low prices and high volumes, we believe improvement and innovation in service levels is the most important way to attract customers, improve retention and distinguish ourselves from the pack. Instead of eyeing all vehicle segments, we will continue to focus on medium to high-end premium brands, and further improving value-added services like enhanced claims support.
Chen: Opportunities in life, pension and health protection are increasing. China’s state pension kicks in very early. Retirement ages are currently set at 55 for women and 60 for men. There is an urgent need to create retirement savings vehicles for a population that is going to age rapidly over the next two decades.
This aging population is also experiencing the dual burdens of a rising rate in chronic diseases and climbing costs for healthcare. The government is increasingly looking beyond public insurance for ways to improve the provision of medical insurance. Two annuity products have remained our top sellers in China since they were launched. Customers choose them as a supplementary income for future retirement.
What about regulations in China? Some say it’s not so easy in China…
Bauer: Regulators set the tone for the environment where insurance companies compete and respond with innovation and flexibility to increasingly demanding consumer needs – all while protecting consumers.
But regulations are not the most important matter. They don’t determine success. The key to success is to understand consumer needs, then to invest in product and service innovations in order to service the most attractive customer segments. Then in the long run you will build your competitive lead. We are committed to China, and are ready to commit further as far as the regulatory framework allows.
About Allianz in China
Allianz has a long business relationship with China that started in 1910, providing fire and marine insurance in the coastal cities of China. The regions Allianz already operates in account for over 52 percent of China’s GDP. Allianz now provides comprehensive financial solutions, ranging from life, pension, motor insurance, assistance to asset management products.