Zhang Ke, YF Life CEO: A customer-centric approach is essential in the development of a new era in insurance

July 30, 2021

The 6th International Insurance Festival and the 2020 Insurance Elites Awards Presentation Ceremony took place on July 29 at the Shanghai Expo Center. Themed “Focus & Convergence”, the conference aims to bring top industry leaders and elites together to drive the development of China's insurance industry. Mr. Zhang Ke, Chief Executive Officer of YF Life Insurance International Limited (YF Life), was guest of honor at the opening ceremony and speaker at the forum "The Road to High-Quality Development of the Insurance Sector".

Zhang said, "Both high economic growth and industry-specific development policies have led to the rapid development of China’s insurance sector over the past four decades. Indeed, China has become a driving force in the global insurance market. However, with the ever-changing landscape of the insurance sector, the industry is experiencing slowing growth and facing various challenges. In view of the advances in technology, the rapid development of the new economy, and intensifying competition, we must embrace change with an open mind. We should embrace fintech, accelerate digital transformation, uplift industry standards and strengthen management capabilities, as all of these will converge and synergize in the development of a fully reformed and high-quality insurance industry. Customer-centricity is crucial to the insurance industry. In order to resolve customers’ ‘pain points,’ we must view circumstances from their perspective and understand their actual needs. To break through the 'traditional insurance' model, we have to energize the industry, create differentiation, and improve professionalism. In addition, we should identify and cater to any unsatisfied protection needs and capitalize on any blue ocean opportunities in new and uncontested market areas. Moreover, we should focus on products, customers, services and value creations. The support and application of fintech is instrumental in developing a new era of high-quality insurance industry.”

China’s population is experiencing rapid aging as life expectancy increases. Statistics for 2020 indicate that 13.5% of China's population was aged over 65, amounting to 190 million people. According to a United Nations’ projection, over 25% of China’s population will be aged 60 and above by 2030, reaching the milestone of “super-aging.” Wealth accumulation to cover health and longevity considerations will be an unsatisfied need and an underexploited blue ocean. During the forum, Zhang cited Hong Kong as a major example, as its aging trend occurred much earlier and more radically than that of Mainland China. Drawing on the experience of the development of retirement-planning insurance products in Hong Kong, he suggests developing lifetime annuity insurance plans for the China market, because a guaranteed lifetime annuity payout is instrumental in securing sustainable retirement funds, effectively hedges against the risk of ‘living too long’, and avoids hitting the retirement tipping point. It is also ideal to have available a full spectrum of annuity options to fully meet the specific needs of a personalized retirement. He also recommends having a comprehensive critical illness insurance plan in place that offers multiple-claim benefits for common critical illnesses, so as to avoid the soaring medical costs that can eat into retirement savings.

In recent years, China's per capita GDP has exceeded US$10,000. With the increase in the middle-income population, demand for wealth management and asset allocation services has been higher than ever. As a tool for investment and wealth inheritance, insurance still has ample room for development. To capitalize on this opportunity, it is important to enhance the professional standards of financial consultants. Zhang also suggests leveraging the Modern Portfolio Theory, as advocated by Nobel economics laureate Harry Markowitz to devise a multi-dimensional "product and service" strategy. With a one-stop investment and financial- management solution supported by advanced technology, customers will be able to enjoy value-added, differentiated, and professional services, which clearly detail returns, volatility, correlation coefficient matrix, and risk-adjusted returns. This enables them to construct a portfolio of investment items with low correlations, as the unrelated return cycles will help offset each other’s volatility in such a way, that the overall risk to the investment portfolio can be reduced whilst pursuing potentially higher returns.

The digital economy now serves as a major engine of China's economic growth, while innovations are the fundamental driving force for developing a high-quality insurance industry. Zhang believes that embracing fintech and accelerating digital transformation will take the insurance industry to the next level. An "insurance and technology" approach leveraging big data, cloud computing, artificial intelligence and the Internet of Things will help infuse technology into product design, sales, underwriting, and claims, thus enhancing operational efficiency and management capabilities.

Looking to the future, as a long-term player in both the Hong Kong and Macao insurance markets, YF Life will bridge the gaps between the local and Mainland markets. Zhang said: "Marching in the vanguard of the development of 'new insurance', YF Life will focus on 'meeting the needs of consumers for risk- and wealth-management', by 'providing personalized insurance solutions, cost-effective insurance products, and a high-quality insurance service experience' as the means to achieve ‘customer value maximization’. Embarking on a new journey, YF Life will inject vitality into the higher-quality ‘new insurance’.”

YF Life Insurance International Limited is a member of publicly listed Yunfeng Financial Group Limited, whose major shareholders include Yunfeng Financial Holdings Limited and Massachusetts Mutual Life Insurance Company, one of the “Five Largest US Mutual Life Insurance Companies”*. Leveraging our robust financial background and solid reliability, YF Life is committed to helping customers “own the future” by providing professional and technology-enhanced one-stop risk- and wealth-management consulting services, as well as MPF services.

*Yunfeng Financial Holdings Limited and Massachusetts Mutual Life Insurance Company have an indirect shareholding in Yunfeng Financial Group Limited. The “Five Largest US Mutual Life Insurance Companies” is ranked according to the result of “Insurance: Life, Health (Mutual)” on total revenues for 2020, and based on the FORTUNE 500 as published on June 1, 2021.

Themed “Focus & Convergence”, the 6th International Insurance Festival and the 2020 Insurance Elites Awards Presentation Ceremony took place on July 29 at the Shanghai Expo Center.

Themed “Focus & Convergence”, the 6th International Insurance Festival and the 2020 Insurance Elites Awards Presentation Ceremony took place on July 29 at the Shanghai Expo Center.

Zhang Ke, CEO of YF Life, was guest of honor at the opening ceremony and speaker at the forum.

Zhang Ke, CEO of YF Life, was guest of honor at the opening ceremony and speaker at the forum.

Zhang Ke believes that a customer-centric approach is essential in the development of a new era in insurance.

Zhang Ke believes that a customer-centric approach is essential in the development of a new era in insurance.

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