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Partnering For Future Success

Li FANG
Deputy General Manager
China Life Reinsurance Ltd.

Table of Contents

Overview of Chinas Insurance Market


Internet Insurance in China
Introduction on C-ROSS
China Re Life and RMB Insurance

Chinas Insurance Market


Chinas total insurance premium reached 316 billion USD in 2014.
Chinas Insurance Premium Income

USD Billion

350

2,000
316
1,786

300
269
250

1,600

1,587

242
227

1,400

224

214

1,295

1,200

1,149

200

1,000

940

150

1,800

800

789

600

100

400
50
200
0

0
2010Y

2011Y

2012Y

2013Y

Insurance Premium

2014Y
Asset

2015H

Chinas Insurance Market


Life insurance industry witnessed ups and downs in the past 5 years, recording a 11%
YOY growth.
Chinas Life Premium Income

USD Billion

250

35%
30%

29%

203.62

200

25%
23%

172.03

166.13
151.90

158.70

20%
18%

151.32

150

15%
10%
8%

100

5%

4%

0%
50

-5%
-9%

-10%

-15%
2010Y

2011Y

2012Y
Life Premium

2013Y
YOY%

2014Y

2015H

Chinas Insurance Market


Channel Development
Agency and bank assurance are the major engines driving up the total market premium .
Premium Breakdown by Channels
USD Billion

80
29%
67.24

70

64.28
27%

60

55.01
51.55
24.70%

50

25%
23%

40

22.24%
20.77%

30

19%

18.95%

20
12.73

21%

10.70
17%

10

3.14

2.60

15%
Direct Channel

Agency
2015H

Bank Assurance
2014H

YOY Growth

Broker

Chinas Insurance Market


Product Development
Traditional product and participating product are still the dominant players in market.
Protection type health insurance with lower rate and wider coverage are gaining market
appeal quickly.

USD Billion

Premium Breakdown by Product Type


18.00
0.03%

47.78%

16.00
14.00

0.62%

17.10

45.0%
40.0%

39.0%
12.30

35.0%

12.00

30.0%

10.00

25.0%

8.00

20.0%
16.4%

6.00

51.57%

3.58

4.00

3.08

2.00

Participating Product

Unit-Link Product

Universal Product

10.0%

5.0%

0.00
Traditional Product

15.0%

0.0%
Health
2015H

PA
2014H

YOY Growth%

Table of Contents

Overview of Chinas Insurance Market


Internet Insurance in China
Introduction on C-ROSS
China Re Life and RMB Insurance

Internet Insurance in China


Huge Customer Base
China's Internet User Coverage
700

Million

649

600

557

500

400

361

300

200

100

0
Internet User
Population

Smart Phone user


population

2014

Online shopping
Population

Internet Insurance in China


Internet Users

Internet Consumption

USD 10
Trillion GDP

1.35 Billion
Population

557 Million
Internet
Users
361 Million
online
shoppers

USD 4.15
Trillion
Consumption

USD 138 Billion


Online Shopping

Internet Insurance in China


Internet Economy
Top 5 Global E-commerce Platforms by
GMV(2014)

USD Billion

400
365
350
300
250

200

174

150
100

74
55

50

41

0
Alibaba

Amazon

eBay
Gross Merchandise Volume

Rakuten

JD.com

Internet Insurance in China


Online Insurance Premium
Online insurance is delivering better customer experiences and reaping the benefits of
economy of scale.
Fast Growing Online Insurance Premium
16

USD Billion
13.62

14
12
10

8.02
8
5.60

6
4.62
3.75

4
2

0.86

0
Online insurance Premium

Online P&C Premium


2013

2014

Online Life Premium

Internet Insurance in China


Highlights of Chinas Online Insurance

Fast-growing premium
Online life premium surpassing online P&C premium by 25%, reaching USD 7.1 billion
Car insurance taking up 42% of online premium VS Universal & Unit Link 42%
Online P&C premium backed by insurers website VS online Life premium sold from
B2C Portal
Increased competition
Product Innovation
Online Insurance Product Type Breakdown by Premium
Volume
2.46%

Online Insurance Business Model

2.00% 2.54%
17

Car insurance

8.60%
42.30%

Universal life&Unit link

Insuers'Own websites

Participating Life

B2C Portal

PA&Health
42.10%

Traditional Life
Other P&C

52

16

Both

Table of Contents

Overview of Chinas Insurance Market


Internet Insurance in China
Introduction on C-ROSS
China Re Life and RMB Insurance

C-ROSS
China Risk Oriented Solvency System
Risks which can not
be regulated

Risks which can be


regulated

Inherent Risk

Control Risk

Quantifiable Risk

Unquantifiable Risk

Insurance Risk

Operational Risk

Market Risk

Strategic Risk

Credit Risk

Reputational Risk
Liquidity Risk

System Risk

1st Pillar
2nd Pillar
3rd Pillar

C-ROSS
C-Ross Rules
One Supervision
Emerging Markets
Risk-Oriented with Value
Consideration

Quantitative
Capital
Requirements
1 Actual Capital
2 Minimum Capital
3 Liability Valuation
on
Life Insurance
4 Minimum Capital on
Insurance Risk(Non-Life)
5 Minimum Capital on
Insurance Risk(Life)
6 Minimum Capital on
Insurance Risk(Reinsurance)
7 Minimum Capital on
Market Risk
8 Minimum Capital on
Credit Risk
9 Stress Test

Qualitative
Supervisory
Requirements

10 Supervision by
classification(Overall Risk
Evaluation)
11 Solvency Risk
Management and
Evaluation
12 Liquidity Risk

Market
Discipline
Mechanism

13 Solvency Disclosure
14 Solvency information
Exchange
15 Credit Rating of
Insurance Company

C-ROSS
C-Ross Framework
Quantitative
Capital
Requirement

Quantifiable Risks
Insurance Risk
Market Risk
Credit Risk

Supervision Tool
Quantifiable Capital
Requirement
Actual Capital
Evaluation
Capital Classification
Stress Testing
Supervision Measures

Regulatory Indicator
Overall Solvency Ratio
Core Solvency Ratio

Qualitative
Supervision
Requirement

Unquantifiable Risks
Operational Risk
Strategic Risk
Reputational Risk
Liquidity Risk

Market
Discipline
Mechanism

Risks which are


difficult to supervise

Supervision Tool

Supervision Tool

Integrated Risk
Rating(IRR)
Solvency Aligned Risk
Management and Risk
Assessment(SARMRA)
Liquidity Risk
Inspection and
Analysis
Supervision Measures

Company Information
Disclosure
Regulatory Body
Information Disclosure
Credit Rating

Regulatory Indicator

Market Indicator

Overall Risk Rating


Risk Control Score

C-ROSS
Impacts on Insurers Operation

Business Strategy

Pricing Management

Liability Management

Business Valuation

Investment

Risk Management

Table of Contents

Overview of Chinas Insurance Market


Internet Insurance in China
Introduction on C-ROSS
China Re Life and RMB Insurance

China Re Life
Company Overview

A subsidiary of China Re Group


Approved by China Insurance Regulatory Commission on 28 February 2003 and
established on 18 December 2003
The only SOE life reinsurer in China
Headquarter in Beijing, 2 branches in Shanghai and Shenzhen
Credit Rating: A.M. Best , A; S&P A+
Solvency Ratio: 243% ( June 2015).

China Re Life
Services we provide

Reinsurance we provide

Product development, marketing and


management

Proportional business on life, health,


accident and annuity.

Arrangement of reinsurance strategy

Facultative reinsurance service

Consultation and training service

Data support of product pricing

Reinsurance auditing

Business and experience analysis

E-underwriting manual support

YRT
Coinsurance
Modified Coinsurance
Non-proportional on life, health and
accident.
CAT
Stop loss
Financial Solution
Cash deal
Non-cash deal

China Re Life
R&D Strength
Mortality Table Revision (2nd and 3rd round)

CI Incident Rate Revision (1st round)

China Insurance Disability Standard

China Re Life
Active Product Development
Internet Insurance
Establish strategic relationship
with
biggest
e-Commerce
service provider - AliBaBa group
Create a platform for internet
insurance sale
Explore new internet consumer
groups

Internet Insurance
Mom & Baby Insurance
Long-term CI products for kids
Pension Product

Health Product
LTC
Cancer Insurance
High-end Medical Care
Preferred Life Insurance Project

RMB Insurance
What is RMB-denominated policy?

RMB Insurance
Product Features
Currency
Denominated in RMB
Target Markets
High-net worth individuals
Overseas Chinese nationals
Product range
Savings-type : endowment, universal
Product term
vary from 3-5 years (short-medium term) to over 10 years
Competitive yields over local solutions

RMB Insurance
Development in RMB Business
China Re Life was approved by Central bank of China as the only reinsurer
2010 for RMB cross-boarder settlement
2010
2011
2013
2014
Future

First offshore RMB reinsurance transaction completed


RMB business introduced in Singapore
Over RMB 27.5 billion in premium income from offshore reinsurance
China Re Life made a breakthrough in Taiwan
China Life Re keeps exploring opportunities in Singapore, Taiwan, Europe
and US markets.

RMB Insurance
Success Case in HK
Billion
RMB

HK RMB Insurance Revenue

10

9.46

9.15

RMB products effectively


increased demand in HK
insurance market

New business volume showed


strong growth since 2010;

Longer term products became


popular

18 HK insurance companies
participated in RMB business

9
8

7.39

7.18

7
6
5
4
3
2

1.39

1
0
2,010

2,011

2,012

2,013

2,014

RMB Insurance
Operation Process
Premiums to be
collected in RMB

Policyholders

Bank
Commissions

Gross Premiums to
be paid in RMB

Premiums less reinsurance


commissions

Local Insurer

China Life Re
Reinsurance claims to
be settled in RMB

Thank you