Chapter 14 Make the cake of the insurance industry bigger

Liu Yonghao has long seen the huge potential of China's insurance market. On May 26, 2002, Liu Yonghao expressed his urgent concern for China's insurance market in his speech at the "Financial Innovation and Western Investment Forum" of the Western China International Expo.Liu Yonghao said: "China's insurance market is a rich gold mine. After joining the WTO, foreign insurance companies are willing to enter China because of the great potential of this market. In the past, my country's insurance industry was monopolized by state-owned insurance companies. Now, by The establishment of Minsheng Life Insurance Company initiated by private capital as the main body has been approved, which will bring a new atmosphere of private capital entering the insurance industry."

China Minsheng Life Insurance Company, as China's first insurance company with private capital as the main investment body, has been doomed to face ups and downs since its establishment. Since private enterprises can establish private banks, why can't they establish private insurance companies?Based on this idea, as early as 1995, while Minsheng Bank was preparing for the establishment, private enterprises including New Hope proposed to the All-China Federation of Industry and Commerce several times to prepare for the establishment of private insurance companies.However, the establishment of Minsheng Insurance did not appear to be as smooth as the establishment of Minsheng Bank. It encountered many difficulties from the very beginning of its preparation.

Regarding the establishment of Minsheng Insurance, people in the society generally reflect that if Minsheng Insurance can form a joint venture with foreign insurance, then it will still be attractive to practitioners. . Minsheng Insurance was proposed for establishment in 1995, and it was not actually established until 2002. It took seven years to prepare.This has gone through many twists and turns. Generally speaking, my country's insurance industry, like the banking industry, belongs to the financial industry and is a state-owned monopoly industry. Because of this, the insurance industry has become a big cake that Chinese and foreign investors are waiting to see.According to some views in my country in the past, the moon in foreign countries is always rounder. People believe in foreign banks and welcome foreign capital participation. However, if private enterprises set foot in the financial industry, their credibility will often be discounted.

As early as 2001, at the beginning of the establishment of Minsheng Insurance, Yan Keqiang, vice chairman of the All-China Federation of Industry and Commerce, once said that Minsheng Insurance’s external business will be divided into two steps: the first step is to establish Minsheng Life Insurance Co., Ltd., and then cooperate with several Negotiations with foreign life insurance companies. These foreign life insurance companies should have been approved to engage in life insurance business in China. joint venture life insurance company. When preparing for the establishment of Minsheng Insurance, Yan Keqiang, vice chairman of the All-China Federation of Industry and Commerce, announced that companies that participate in the establishment of Minsheng Insurance must meet four conditions: first, the company made a profit in the previous year; loans); third, the debt ratio of an enterprise should not exceed 70%, and the equity capital should not exceed 50% of its net assets; fourth, the shares held by each enterprise generally do not exceed 10% of the total shares.In fact, private enterprises that meet the first three conditions were given a chance in China. At that time, more than 20 enterprises expressed their intention to become shareholders.The fourth article actually restricts the sponsoring shareholders to avoid the phenomenon that a single major shareholder controls the company.At that time, the pre-established share capital amount was 1 billion yuan, which means that the contribution of a single shareholder cannot exceed 100 million yuan.

However, the situation of fundraising later was not satisfactory. Within the specified period, only 4 companies were able to contribute capital on time.So the preparatory group relaxed the restrictions on the shareholding ratio.In this way, Zhejiang Wanxiang Group and China Oceanwide Group made additional investment, each investing 120 million yuan, accounting for 12% of the total share capital. The shareholding ratio has risen to about 15%.If nothing else, it will become the largest shareholder of Minsheng Insurance. Wanxiang Group and Oceanwide Group, and their founders Lu Guanqiu and Lu Zhiqiang, were included in Forbes magazine's list of the richest people in mainland China.Lu Guanqiu ranked seventh and Lu Zhiqiang ranked 36th.And both of them are very passionate about investing in the financial industry.China Oceanwide Holdings Co., Ltd., a subsidiary of Oceanwide Group, holds a 7.51% stake in Minsheng Bank and is its second largest shareholder; the overseas subsidiary of Zhejiang Wanxiang Group recently took a stake in Holden Insurance Group of the United States and jointly invested in the establishment of Holden Insurance Brokers.

Brother Liu Yonghao, who was named the first richest man in mainland China by Forbes magazine in the United States, did not become the largest shareholder with the largest investment.Liu Yonghao is very clear that even if he becomes the largest shareholder, he cannot absolutely control the company under the condition that the equity design of Minsheng Insurance is extremely scattered. If he can relatively control the company with the least cost, this is the essence of equity investment.Although Liu Yonghao's respective investment lags behind Lu Guanqiu and Lu Zhiqiang's, their investment has been calculated accurately and has been skillfully controlling the situation.

When the preparatory team required that a single shareholder’s contribution should not exceed 100 million yuan, Liu Yonghao brothers added up to 110 million yuan, exceeding the largest investor; when the preparatory team allowed additional investment, Liu Yongxing added an additional 25 million yuan, plus Liu Yonghao's 60 million yuan is 135 million yuan, which still exceeds the 120 million yuan of Lu Guanqiu and Lu Zhiqiang. Due to the long and difficult journey of Minsheng Insurance Company and the confusion of shareholder changes, not only domestic private enterprises and other enterprises have doubts and disappointment, but also for foreign insurance companies who covet China's insurance market and desire joint ventures, it is also a challenge for Minsheng Insurance. There was a certain pessimism.

A staff member of British B&H Insurance Consulting Company who has been engaged in the research of insurance system commented on the cooperation between Minsheng Insurance and foreign capital: "As long as the Chinese policy allows sole proprietorship, foreign insurance companies will generally not consider the issue of joint ventures, as long as they take part of their own Copying the set and then carrying out the corresponding localization will definitely make good profits. However, there are currently institutional constraints on life insurance operations, so it is very knowledgeable to choose a joint venture. It has good competitiveness, but this advantage is offset by efficiency, so it has formed the current embarrassment."

But in any case, Minsheng Insurance has finally taken the first step in China, and how should it operate after that?Liu Yonghao believes that the most urgent task of Minsheng Bank is to understand international rules.Only when the operation of the insurance industry is in line with international rules as soon as possible can we turn challenges into opportunities and achieve win-win results for all parties. On April 18, 2002, with the convening of Minsheng Insurance Founding Conference in Beijing, the capital, it marked that private enterprises, as the most active part of China's economic field, began to penetrate and enter the financial field.Jing Shuping, chairman of the All-China Federation of Industry and Commerce, was warmly welcomed by shareholders as the "planner" of private capital entering the financial field, as well as the "first" experimenter of private capital. Among the 21 shareholders, private enterprises account for more than 90%, and of the company's 830 million yuan registered capital, private capital accounts for more than 80%.Minsheng Life Insurance Co., Ltd. is led by the All-China Federation of Industry and Commerce, China Wanxiang Holdings Co., Ltd., China Oceanwide Holdings Co., Ltd., Jiangxi Huiren Group, Shanxi Haixin Iron and Steel Co., Ltd., East Hope Group Co., Ltd. and Sichuan New Hope Agriculture Co., Ltd., etc. Famous private enterprises with economic strength in China were established as promoters.

During the "Two Sessions" in 2002, at the group discussion meeting of the All-China Federation of Industry and Commerce, several vice-chairmen of the All-China Federation of Industry and Commerce and representatives of some enterprises of the Federation of Industry and Commerce expressed some opinions on this.They believe that although national policies are becoming more and more open to the private economy and private enterprises, discrimination against private enterprises still exists in society, and there are quite a few strict restrictions on the policy level for private enterprises to get involved in the financial field. A big backdrop for the company's delay in getting state approval.Minsheng Bank, which was approved by the state, has developed rapidly in the past seven years and achieved good economic and social benefits. However, in recent years, there have been many "state-owned enterprise diseases" similar to state-owned banks, such as increasing bad debts and weak supervision. , corruption, etc., especially in support of private enterprises, has been publicly criticized and even accused by some scholars and enterprises, making some private enterprises have doubts about the prospect of Minsheng Insurance Company.

As for the All-China Federation of Industry and Commerce, as the only powerful organization that organizes private enterprises to participate in financial investment, it is also considering how to eliminate these problems in the newly established insurance companies, and is actively striving for national policies to allow the introduction of foreign funds, and to cooperate with powerful foreign companies. The joint venture of insurance companies changes the capital structure, which not only strengthens the financial strength, but also promotes the improvement of the mechanism to cope with future worldwide competition. In addition to the reasons of the external environment, "in fact, the direct cause of the dystocia is the frequent changes of shareholders and board members," said a person in charge of the All-China Federation of Industry and Commerce who participated in the preparation of Minsheng Insurance. Hao Yansu, a professor of the Insurance Department of the Central University of Finance and Economics, said: "Integrity is the first of the four principles of insurance. Why does the insurance industry need the greatest integrity? Consumers who spend money on insurance, even if they pay 3 million yuan, can't see it. What he gets is an expected service and a promise. The integrity of the insurance industry is therefore more important and more demanding than other industries.” In this regard, Liu Yonghao fully agrees.From the first day he resigned and went to sea, his business has been growing and growing by relying on honesty and integrity.Perhaps due to his straightforward personality, he cannot tolerate the problem of integrity crisis in the enterprise.He believes that honesty is the foundation of an enterprise, especially when many people in the society are not optimistic about private insurance, it is even more necessary to resolutely eliminate the phenomenon of deceiving and deceiving consumers in Minsheng Insurance. On April 8, 2002, "China Youth Daily" published a confession letter from a life insurance agent under the pseudonym Bai Xiaofang: "Concealment is our means of pursuing performance—an insurance salesman exposes the inside story of the industry."The article reads: "Deceit is the means by which we pursue performance." "Our deception methods were 'brainwashed' by the company during the pre-job training before entering the industry and the weekly morning meeting. The company requires salesmen to regard deceiving policyholders as a kind of good faith profession." This article caught the attention of Liu Yonghao. He believed that this "Bai Xiaofang" did not understand the working process of the insurance company, and even mistook the insurance business as a deception.But at the same time, on the other hand, it also reflects that the insurance company lacks necessary training, guidance and management for its employees, and cannot understand what their employees think. This cannot but be said to be a major failure in the work of the insurance company. Although according to the "Insurance Law", the consequences caused by the insurance agent's work mistakes should be borne by the insurance company he represents.But this kind of insurance marketing like stragglers is virtually increasing the commercial risk of insurance companies. Although they have indeed sold many policies, what they bring to insurance companies is the risk of continuously accumulating claims.If even the marketing personnel representing insurance companies do not understand what the core value of insurance products is, and they all think that insurance companies are "cheating money", how can they hope that ordinary consumers will have a good impression of insurance?Liu Yonghao hopes that private insurance can be established in front of the public with a corporate image that emphasizes integrity. In this regard, he believes that the domestic insurance industry has developed rapidly. Since the restoration of the insurance industry in China in 1980, the average annual growth rate has been 35%, which greatly exceeds the growth rate of the country's GDP.my country's insurance market has become a fertile field that foreign capitals are vying for.However, my country's insurance laws and regulations seem to be unable to keep up with the rhythm, and should be revised and improved as soon as possible. Liu Yonghao believes that my country's insurance law has the following problems: First, the business scope should be expanded.Liu Yonghao believes that accidental injury insurance and disease insurance (often referred to as the third field) should be included in the scope of business that both life insurance companies and property insurance companies can operate.The reason why a property insurance company can concurrently operate accident insurance and health insurance is that: from the perspective of possibility, the nature of the two businesses is the same, both belong to short-term business, and the basis for calculating the rate is based on the probability of loss; from the perspective of necessity , It is convenient for policyholders to apply for insurance, and it is also convenient for insurance companies to reduce business costs.This is consistent with the regulatory purpose of insurance to protect the interests of the insured. Second, insurance terms and rates should be market-oriented.The reasons are: First, to ensure fairness in the market.Insurance contract disputes are usually interpreted in favor of the insured or beneficiary, based on the insurer as the drafter.Therefore, returning the status of the insurer to the drafter is exactly the need of the principle of fairness; second, the Chinese insurance market has gradually developed, and insurance companies or industry associations have basically been able to formulate insurance clauses and premium rates; third, prices and product strategies are usually The marketization of clauses and premium rates is an important means commonly used in insurance marketing in most countries in the world, which will help promote market competition; Fourth, my country has carried out a pilot project of marketization of auto insurance premiums in Guangdong, explaining the necessity of its revision where. Third, improve insurance investment supervision.Based on China's national conditions and drawing on foreign experience, the basic idea for improving insurance investment supervision should be: appropriately relax investment methods and strictly control investment proportions.On the basis of the current insurance investment, insurance companies should be allowed to directly invest in stocks, corporate bonds, real estate, and mortgage loans, and the corresponding investment ratio should be stipulated to enhance the solvency of insurance companies. Fourth, the forms of insurance organizations should be diversified.The insurance organization forms stipulated in my country's current insurance law are: wholly state-owned companies, joint stock companies and other organizational forms.In foreign countries, mutual insurance companies and insurance cooperatives are important forms of insurance organizations.In particular, mutual insurance companies accounted for 17 of the 49 insurance companies in the world's top 500 in 2000. This is because mutual insurance companies have the important advantage of the consistency of interests between the policyholder and the insurer.Therefore, my country's insurance organization forms should include: joint stock companies, wholly state-owned companies, mutual insurance companies, insurance cooperatives, and other insurance organizations.The reason for the diversification of insurance organizations lies in the unbalanced economic development and the diversity of insurance needs.At the same time, it is conducive to the construction of my country's monopoly competition insurance market model.On the one hand, there are a large number of companies, which is conducive to promoting competition; on the other hand, a small number of companies occupy a relatively high market share, which is conducive to ensuring the stability of the insurance market, so that the insured can obtain insurance protection.To this end, my country's "insurance aircraft carrier" should be built, and it should be realized through joint-stock reform of wholly state-owned companies, capital increase and share expansion of joint-stock companies, and a certain degree of mergers and acquisitions. In fact, since 2001, in order to adapt to the ever-changing new economic environment, my country's "Insurance Law" has been revised. In October 2002, it was officially amended according to the "Decision on Amending the Insurance Law of the People's Republic of China" at the 30th meeting of the Standing Committee of the Ninth National People's Congress. With the gradual opening up of the economic environment, Minsheng Insurance, as China's first insurance company mainly formed by private capital, has more and more room for activities, and its trust in the society is also gradually increasing.Liu Yonghao, as the initiator and investor of Minsheng Insurance, has also developed greater confidence in the future operation of Minsheng Insurance. It is not easy for private enterprises to play with the "hands of capital", and Liu Yonghao does not shy away from talking about the "soft underbelly" of private enterprises. When the company is very small and starts a business, the family color is very strong.Without too much consideration, they are tied together, they have to rise together, and they have to sink together.At this time, when it comes to loyalty, it is more about loyalty to people, and a family business is loyalty to the boss.When a family business grows bigger, it must gradually get rid of the characteristics of the family. At this time, it must be loyal to the cause. In private companies, it is generally what the boss says and the subordinates do.If an enterprise does this completely, the enterprise will definitely not grow well, because the boss's ability is limited, his knowledge, information and ingenuity are limited, and he is not the best. Therefore, in order for a company to grow to a certain size, it must overcome family management and be loyal to the company, not to individuals.For example, the boss wants to do something, and someone says to the boss: "I have done a survey, you can't do this." From the immediate point of view, he may not respect the boss enough, but in the long run, the boss will eventually thank you. he. After many years of development, the employees who started the business with Liu Yonghao are very affectionate, loyal, and hardworking to the company. When they talk about what they have done in a year and a month, they sometimes shed tears.But only these people are not enough, we also need to introduce and train people with modern awareness, good education background, and talents with foreign work experience. New Hope continues to recruit talents and professionals, including the vice president and chief financial officer of a well-known securities company in China.And actively introduce foreign investors, and have extensive contacts with investment banks and financial groups in Japan, Europe and the United States. Foreign investors enter the investment and trust companies that New Hope participates in in various ways such as shareholders and strategic partners. At a symposium on human resources, Liu Yonghao said that foreign companies pay attention to efficiency, rules and systems.Chinese culture emphasizes understanding, communication, coordination, and moderation, which is the culture of Confucius. Which is better between the two?Liu Yonghao invited a financial director of a foreign-funded enterprise to their side. The financial director has long-term working experience in foreign companies, and his management and thinking mode are relatively standardized.Liu Yonghao asked him why he left foreign companies and came to private companies.He answered me like this: "It is more standard to work in a foreign-funded enterprise, although the salary is good, the conditions and the working environment are good, but there is little change. After three years or five years, I will still do this. However, in private enterprises, Individuals grow with the business." As for the "airborne troops", some companies resolutely don't want them, and some companies introduce a large number of them, all of which have successful examples.Liu Yonghao believes that hybridization or complementary advantages are the best.The cadres they train themselves have the advantage of being loyal and not making big mistakes.However, their vision, efficiency, and grasp of international management rules are weaker. The "airborne soldiers" of "New Hope" have considerable quality and are relatively loyal to the company. They have not skipped many slots, and the boss also agrees.Therefore, when Liu Yonghao introduced "airborne soldiers", he had to do various investigations, chat with his boss, his subordinates, and people of the same level as him to see if he has basic "virtue".Without virtue, no matter how great the ability is; with virtue, if the ability is not great, the mistakes will not be big; it is best to have good virtue and strong ability.In addition, it depends on whether the adaptability is good or not.Because the management model of foreign companies is different from that of Liu Yonghao, it needs adjustment.Liu Yonghao values ​​people with long-term management experience in large private enterprises.