Ping An, China’s second largest insurer, is hoping its mobile internet push will help it achieve a high-speed growth in the next five years.
The company would be able to achieve 15% long-term growth in life business, according to Morgan Stanley research.
The group has launched multiple mobile applications covering life, health, car and housing related insurance products and services.
With the help of various new tools developed to conduct customer analysis and targeted marketing, Ping An life insurance business wants to increase penetration to 27% from 20% and policies per customer to 4.5 from 2.2 over the next 5 years.
Time is of the essence. Internet companies in China are offering financial products with returns that are multiple times higher than those allowed on conventional deposit accounts at regulated financial institutions. For example, Alibaba launched Yu'e Bao, a monetary fund sold online, last June and has already attracted over $60 billion to become the largest fund in the country.
The company and the other two internet giants - online search firm Baidu.com and online social network group Tencent - have also set up privately-owned banks, entering the banking sector with limit access.
“We are learning from and cooperating with internet companies, rather than competing with them,” said Yuanxiang Li, Ping An chief insurance business officer and deputy general manager, at the group’s annual media conference in December.
Currently, 10% of Ping An’s clients use the group’s mobile services and the company is aiming to raise this to 70% in the next five years by launching more mobile applications.
Ping An, Alibaba and Tencent launched a joint venture in December 2012 to sell Ping An products across the online groups’ sites.
For example, the insurer uses Alibaba’s ecommerce platform Taobao to boost sales of its products.
Ping An hit a record daily sales volume of Rmb3.7 million ($610 million) for its car insurance products on November 11, China's online version of the US's Black Friday sales day. It sold more than Rmb100 million worth of insurance products within a few hours on the day.
The company is hiring from within the industry, recruiting engineers from companies including Alibaba, Tencent and Huawei to develop and design mobile apps, according to a source close to the company.
Ping An will apply more new technologies to help agents understand and serve the clients, the company said.
“We know customers better than pure internet companies under the help of the agent model,” said Li. “Our understanding of them will be deeper and more thorough.”
For example, Ping An used data analysis to find that, among its 80 million customers, 30 million are related to other members. This can help Ping An’s agents understand the families’ relationships and needs and sell products more efficiently.
Ping An will further look into customers’ friend relationships through social network apps to get more information about customers and understand their needs.
“Ping An has been an industry leader in adopting new technologies to improve customer experience and relationship,” said a Morgan Stanley report on December 12.
The company’s online philosophy was exemplified by the group’s HK$36.83 billion ($4.75 billion) share sale in November.
Jack Ma, Alibaba’s chairman, and Tencent’s chairman Pony Ma were invited to participate, according to two sources, buying $1 billion of shares in total, or 21% of the placement, one of the sources said.
Strategic co-operation will usually follow such sizable equity investment, the source added.
Ping An declined to comment but Li said it would “continue to be open to co-operation with all kinds of large, high-quality enterprises”.
The company’s ecommerce efforts have attracted attention across China.
Liang Xinjun, chief executive of China’s largest private investment company Fosun International, told FinanceAsia he liked Ping An’s Shanghai Lujiazui International Financial Asset Exchange, known as Lufax, a peer-to-peer lending platform.
As of end-September, Lufax has increased five-fold its year-to-date P2P trading volume and topped all Chinese P2P companies.
“Ping An’s internet finance business is unique and has comparative advantages [than other insurance companies],” Liang said.