insurance trade with china_updated

7/30/2019 Insurance Trade With China_Updated

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ChinaHealth Insurance

International MarketingAssignment The China Factor

Amit Mani Tripathi, Rollnu 11Shivam Mishra, Roll nu

10Nitish Narayan, Roll nu


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Where does china rank in terms of size?


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19.18% of

world population


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History... Ancient Chinese civilization

flourished in the fertile basinof the Yellow River in the

North China Plain. Earliestdynasty - Xia dynasty of theYellow River basin (approx.2000 BC)

In 221 BC, the Qin Dynasty

first conquered severalstates to form a Chineseempire

The Republic of China,founded in 1911 after the

overthrow of the Qingdynasty

In the 19461949 phase ofthe Chinese Civil War, theChinese Communist Party

defeated the nationalistKuomintang in mainland


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Sneak peak

Chinese proclaim themselves "Lung Tik Chuan

Ren" which translates to descendants of the

The dragon is regarded as the symbol of theChinese

It's easy to tell the difference between Chinese,Korean and Japanese dragons. Just count thedragon's toes. Chinese dragons have five toes

Korean dragons have four toes Japanese dragons have three toes

Enter the Dragon


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Sneak Peak

China surpassed the United States

as the world's largest automobilemarket in 2009 Annual car sales in China may rise

as high as 40 million by 2020

Side-effect of the rapid growth ofroad network a significant rise in traffic accidents in

2011, 62 thousand accident deaths Pollution

Car Nation

carboncredits

insurance

opportunities


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China will add 400 millionpeople to its urban populationby 2025

Urbanization rate increasedfrom 17.4% to 46.8% between1978 and 2009

Between 150 and 200 millionmigrant workers returninghome to the countrysideperiodically with their earnings

Training

IT

opportunities

Sneak Peak

Urbanization


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Trivial Crucial Facts

When you write your name in China you putyour family name first then your first name.

There are about 42,000 characters inChinese language. An adult is only

expected to know 5,000 of them.For example, meansAmerican marriages are made in china

30% of Chinese adults still live with their

parents.Approximately 200 million people in China

live on less than $1 a day.


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China is the source of 68% of theworlds "pirated" goods.

China produces 66% of the world's

garlic, 15 billion pounds in 2009. Nextare South Korea 6%, India 5%, andthe USA 2.5%.

Trivial Crucial Facts


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Social Environment

Peoples Republic of China VsRepublic of China

(1912) Qing Dynasty overthrown by

revolution under Sun Yat Sen. Republic ofChina established.

(1912-1946) Struggle between KMT andCPC

(19461949) Chinese Civil War.Communist Party of China establishPeoples Republic of China


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Social Environment

Population : 1.34 Billion

Population below poverty line: 2%

Literacy Rate : 90.92%

Life Expectancy : 71.44 yrs Male: 69.71 yrs

Female : 73.26 yrs


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Social Environment (contd.)

Labor Force : 812.7 million

agriculture40%

industry27%

services33%

Labor force distribution


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Social Environment(contd.)

Official Language : Mandarin

Other Major Languages : Wu, Yue(incl. Cantonese), Min , Xiang, Gan

and Haka Major Religions : Buddhism, Taoism,

Chinese Folk Religion

Strong sporting culture. Basketballgaining popularity amongst Youth.


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Cities


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Legal Environment

Under the World Trade Organization (WTO) framework,the Chinese government lowered entry barriers toforeign insurers, allowing them to establish joint-ventureinsurance firms in China

As of 2007, China had 100 insurance companies, 59 ofwhich are domestic-funded and the rest 41 are foreign-funded.

Investors may consult the Peoples Republic of Chinasembassies or consultants stationed in their respectivecountries or regions. Alternatively, they can contact thelocal governments Department of Promotion of

International Trade - the department in charge of thepromotion of foreign trade and foreign investment.


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Legal Environment (contd.)

Main Foreign Investment Laws andRegulations Law of Chinese-ForeignEquity Joint Ventures and itsimplementation regulations:

Law of Chinese-Foreign Contractual JointVentures and its implementation regulations Law of Wholly-Owned Foreign Enterprise

and its implementation regulations Law of Foreign-invested enterprises, the

income tax and its implementationregulations

Law on the Protection of TaiwanCompatriots Investment


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Economic Environment

GDP:- $ 7.3 trillion (2012 est. Nominal Value)

GDP growth:- 9.5% (2011 est.) (CIA World fact book)

Currency : Yuan ($1 = 6.3 Yuan)

Per Capita Disposable Income :- $3,243 (2012 est.)

Unemployment Rate:- 6.1%

Inflation rate:- 2.97%

Population below poverty line 13.4% (2012 est.)


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Economic Environment (contd.)

Labor force: 815.3 million (2010); agriculture 10.2%,industry 46.9%, services 43% (2010 est.).

Exports: $1.581 trillion (2010 est.): machinery and

equipment, plastics, optical and medical equipment, ironand steel.

Imports: $1.327 trillion (2010 est.): machinery andequipment, oil and mineral fuels, plastics, optical and

medical equipment, organic chemicals, iron and steel.

Ranked 8th in FDI as per CIA World Fact book in 2010


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Political Environment

The People's Republic of China, alongwith Vietnam, North Korea, Laos, andCuba, is one of the five remaining

official communist states in the world. The country is ruled by the Communist

Party of China

President : Hu Jintao Premier : Wen Jiabao


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Political Environment (contd.)

Government holds a strong power on theeconomy.

Insurance business in China is supervised by

the CIRC, under Insurance Law,

Provisions on the Adminstration of InsuranceCompanies, and Law of on Anti-MoneyLaudering.

Microinsurance policy backed up by theChinese government, experimenting in areasincluding Sichuan Province.


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Technology Environment

Internet users:-500 million (2011)

Internet hosts: 15.251 million (2010).

China Telecom alone serves 55 million broadband

subscribers

Tianhe-1A worlds fastest supercomputer developed in 2010.

China has been pioneering the deployment of pebble bednuclear reactors, which run cooler and safer than

conventional nuclear reactors.

In 2011, China unveiled a prototype train capable of reachingspeeds of 310 mph (500 km/h), the first ultra-high-speed traindeveloped solely by its domestic railway industry.


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Technological Environment (contd.)

In September 2011, the first Chinese space stationmodule, Tiangong-1, was successfully launched, markingthe first step in a decade-long project to construct a largemanned space station.

made its first attempt at the robotic exploration of Mars inNovember 2011.

China conducted a successful test of an anti-satellite

missile.

JL-2 missile, a new submarine-launched nuclear ICBMwith multiple-warhead delivery capabilities.


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Member at WTO

The World Trade Organization (WTO), like manyclubs, denies patrons the right of automaticreadmission.

Having quit the organization's predecessor shortlyafter the Communist revolution of 1949, Chinahad to wait 15 long years to gain entry afterreapplying in the 1980s.

The doors finally opened on December 11th 2001.The price of re-entry was as steep as the wait

was long.

China had to relax over 7,000 tariffs, quotas andother trade barriers.


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Healthcare Development in China

7371.468.667.9

57

35

0

20

40

60

80

1949 1957 1981 1990 2000 2005

Life expectancy at birth increased from 35y in mid-1950s to 73y in2005!


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Healthcare Development in China

1949 to 1960s Gradually established a health system inline with the national situation at thattime

1960s to late1970s Hardly any progress made except for inrural areas

Late 1970s tomid1990s

Reform exploring and progressing

Mid1990s up to now Further reforms have been being carriedout


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Grey Areas

Health insurance system: Some part of the population was still not covered

by the health insurance systems;

Lack of integration of different health insurancesystems, especially challenges from the mobility ofthe population;

Level of assurance and government investment arestill relatively low;

Reform is desirable in the mode of payment;


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To cover basic medical insurance system in an all-roundway, and ensure the participation rate of basic medicalinsurance scheme for urban and rural residents to reach90% or higher.

Basic Medical Insurance System for UrbanEmployees

Basic Medical Insurance System for Urban Residents

New Rural Cooperative Medical Care Scheme To raise the percentage of medical costs for

hospitalization in insurance, and incorporate outpatientfees of common diseases and frequent diseases intomedicare reimbursement.

To provide hassle-free insurance to university students,people employed flexibly, retirees from bankrupt state-owned enterprises, retirees and workers of ill-functioningcompanies, and farmer-turned workers.

To appropriately address medical insurance for migrantpopulation.

To improve the urban and rural medical relief system.

Key Reforms Required for ImprovingHealthcare Insurance


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China Regulator: To Open InsuranceMarket More To Foreign Firms: Wu Dingfu, chairman of the ChinaInsurance Regulatory Commission

The head of China's insurance regulator said China will furtheropen its markets to foreign competition, apparently addressingrising complaints among foreign financial institutions abouttheir shrinking shares in China's domestic market.

"China's insurance market will become one of the world's mostimportant markets in the coming years, and provide hugedevelopment potential for foreign insurers,

Wu said he expects China's insurance market, which is now theworld's sixth-largest insurance markets by premiums, to

keep high growth rates in anticipation of a robust economy in thecoming years.

"China will further open its insurance market to foreigncompanies, and let foreign insurers play a bigger role in the localmarket," Wu said, without elaborating.


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Product: Health Insurance Key Benefits

Comprehensive coverage for your family with floater benefit Flexibility to structure the premium as per individuals requirement

Entry age no bar- Minimum entry age 3 months

Guaranteed lifelong renewability

Option of choosing 1 or 2 year policy period as per plans offered

No medical tests for insurance cover below 25 years age Cashless claims facility at over 4,000+ network hospitals across

China

Continue to enjoy quality service even during claim settlementswith our own in-house health claim processing and wellness team

Avail tax benefits under China Income Tax Act 1961

Get additional bonus for every claim free year

EMI facility is available

Keep your family secured even against expenses forhospitalization due to Natural Calamities

Existing diseases will be covered under the insurance


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Emotional Benefits:

Sight: Our Offices will be attractive, modern and well architected. Specialwaiting rooms, comfortable chairs for customers and employee. (goodlooking agents)

Sound: In customer waiting room we will play soothing and relaxing music.

Smell: Use of room fresheners in all the offices

Skin: hygienic environment and comfortable chairs.

Simplicity: Offices and agents will be customer friendly. The handouts andbroachers will be deigned with utmost simplicity.

Snob Value: Acting in accordance with our beliefs and values, Completeprotection, immediate response during any complains.

Taste: N\A


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Apex Body Approval

The China Insurance Regulatory Commission (the"CIRC"), established on November 18, 1998

Formulate policies for developing the insurance industry

Scrutinize and approval of insurance companies,subsidiaries, insurance holding companies

Examine and approve the qualifications of managers of

various insurance companies Pricing regulation, insurance schemes

Supervise the financial health of insurance companies

Supervise policy-oriented insurance and compulsoryinsurance

Supervise fair competition in industry Supervise insurance companies with overseas operations

Create framework for insurance industry for information, risk,forecast, supervision.

To undertake other jobs delegated by the State Council


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Understanding Chinese Regulatory Strategy : A Key FirstStep in Approaching the Market

The regulatory framework for the insurance sector was codified inthe "Insurance Law of China," promulgated in 1995.

Nonlife insurance approval is required to establish a representativeoffice in China.

The Chinese policy regarding life insurance has been to require

foreign life insurance companies to form joint ventures with domesticcompanies with limit foreign equity share to 50 percent

Management control must also be shared.

Health insurance, foreign life companies (JVs) may be establishedonly in "open" cities (currently Shanghai and Shenzhen).


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Third Party Inspection


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Pricing:

The Chinese market for most products, including insurance, is highlyprice sensitive.

Product pricing is subject to approval by CIRC.

Companies are allowed to set prices within a limited range.

Currency Sensitivity: Chinese Yuan (RMB)will be the trading

currency Forex Rate: 1 Chinese Yuan = 8.7138 Indian rupees

Philosophy : Cost + Fair Play

We have four international Medical Insurance plans


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Place:

Corporate HQ and Insurance Office at Queen Marys Hospital Campus inHong Kong.

Tie up with Bethune International Peace Hospital and Peking Union MedicalCollege and Hospital at Beijing by setting up information kiosks and Salesoffice.

Nodal Office at Renji and Xinhua Hospital at Shanghai with suitably trainedpersonnel to assist Clients with their queries regarding the Insurance.

Partnership with Australia and New Zealand Banking Group Limited (ANZ) atDongcheng & Industrial Commercial Bank of China (ICBC) at XichengDistrict to gain access to customers from Rural Areas.

A Toll Free Number that operates 24*5 for any clarifications regardingpayment / Renewal & Cancellation.

A highly interactive and updated Web Interface customizable to both English,Mandarin and Cantonese which automates the entire policy purchaseprocess, with suitable payment options.


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Promotion:

Target Prospects, Customer, End User

Opinion Makers:

Private CompaniesBanks

Testimony Creators: Prestigious Users (Use of CRM)

Celebrity endorsement(Common Public)


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Promotion Medium:

Bancassurance : 50% Direct Sales: 10%

Telemarketing: 5%

Insurance Agent(Tied): 2%

Independent Financial Advisor: 3%

Brokers: 20%

Internet: 10%


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Packaging:

Free health coupon Discount coupon

Online chat with doctor, dietician and

Nutritionist e-consultation Specialist e-consultation with one

follow up session

EMI facility 24*7 Support


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People


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People (contd.)

Government only allows establishment of joint-ventureinsurance firms in China Choosing the right partner is of paramount importance. Following aspects need to be considered :

Market Focus

Target Market Business Stability

Financial Security Soundness and Structure

Does their process and practice fit with yours

Technical Expertise

What Knowledge do they have of you? What is their Partnership mentality?

Legal validation


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Policies

The Sales and Distribution policies willcenter around the following objective

Increase agent productivity

Improve recruitment of new agents andretention of existing agents

Improve customer retention and customerprofitability

Enable cross-selling and up-selling of products Explore new products and alternate channels

for sales growth


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Policies (contd.)

After Sales ServiceAfter sales service plays an important role

in customer satisfaction and customer

retention. It generates loyal customers Sales Professionals need to stay in touch

with the customers even after the policyhas been sold.

Give them the necessary supportwhenever they need , wherever theyneed.


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Policies (contd.)

Opening up multiple communicationchannels for customer issue redressal

It would be wise to adopt CRM


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THANK YOU

insurance trade with china_updated

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