Insurance Firms Embrace Follow-the-Leader Strategy?
On November 22nd, AIA announced new personnel changes through two internal letters. In the letter, AIA Group's Chief Executive Officer and President, Lee Yuanxiang, announced that Zhang Xiaoyu, CEO of AIA Life, was promoted to Regional CEO, responsible for AIA's business in Mainland China, South Korea, and Vietnam. At the same time, the letter also welcomed the addition of Yu Hong, who is expected to succeed as CEO of AIA Life, reporting directly to Zhang Xiaoyu. In September of this year, Yu Hong officially announced her retirement after being rehired for one year as General Manager of Ping An Life Insurance.
This personnel change seems to be a microcosm of the changing times, reminding people of the era when foreign financial insurance executives were once "preaching" in China in the 1990s. Times have changed, and now Ping An Insurance Group, a domestic giant, has become a new source of talent for foreign insurance companies.
In September of this year, it was announced that Chen Xinying, former Co-CEO of Ping An, joined Canada's largest life insurance company, Sun Life, as its CEO. This is the first time in Sun Life's history since its establishment in 1865 that a professional manager with a background in Chinese financial institutions has been appointed as an executive, attracting global attention. In 2019, AIA Insurance even paid a "sky-high transfer fee" to poach Lee Yuanxiang, who was then Co-CEO of Ping An. Since then, some veterans from Ping An's subsidiaries have also been poached to AIA, until Yu Hong joined AIA after retiring. Personnel changes are constant, and the flow of water brings vitality. Although Ping An has been known for many years as the "Whampoa Military Academy" of China's insurance industry, it has recently become a new "cradle" for global financial and insurance talents. Its talent management strategies have also shown new trends with strategic upgrades, which are worth exploring.
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On the other hand, with Lee Yuanxiang at the helm of AIA as CEO, the company's personnel strategy has also shown a clear "Ping An" tendency, and its strategic and business orientation seems to be moving closer to Ping An. As a foreign insurance company with a relatively unique strategy and business model, AIA is also undergoing a series of obvious changes. What is the mystery behind this? It is also worth delving into.
/ 01 / The insurance industry is moving towards the "insurance+" development stage, and Ping An is cross-industry in personnel training to cultivate "cross-industry talents"
The upgraded "Wells Fargo + UnitedHealth" model is Ping An's strategic direction, which is the strategic benchmark that Ping An's management has been constantly communicating externally over the years. In fact, not only Ping An, but also major domestic insurance companies such as Taikang, China Life, and Taibao are all moving towards the "insurance + health care" business model.
From the perspective of national policy, the five major articles required by the state for the financial insurance industry also require the insurance industry to respond to the new expectations of the state for the financial insurance industry in multiple directions such as pension finance, technology finance, digital finance, and green finance. "Insurance+" has become the direction of strategic transformation for the entire industry. The difference is that Ping An is "comprehensive finance+", while other insurance giants are "insurance+". In addition, Ping An has established a technological capability background over the years, emphasizing digital empowerment and upgrading, which is equivalent to digital "comprehensive finance + medical and elderly care". The complexity of its model is higher than that of general insurance peers. This strategic model also determines the complexity of its personnel strategy, and the use of cross-industry talents has become its distinctive feature.
First, at the group level, Guo Xiaotao, who holds the title of Global Partner and Managing Director of Boston Consulting Group, joined Ping An more than five years ago and quickly rose from the subsidiary level to the group. Last year, he succeeded Chen Xinying as Co-CEO of the group, responsible for leading Ping An's core insurance business, medical and elderly care business, and technology empowerment-related strategies. As a young and vigorous post-70s generation, he is highly regarded within Ping An for his "strong strategic planning ability, systematic design ability, and organizational driving ability". Along with Guo Xiaotao, Fu Xin, a quasi-post-80s female general, was also promoted to the Executive Director of Ping An Group this year. Before joining Ping An, she also came from the top international consulting firm Roland Berger. After joining Ping An, she was carefully trained and successfully took over the daily operations, planning, finance, and other related functional modules previously managed by the former Co-CEO Yao Bo.
Looking at the changes in the team of Ping An Life Insurance, with a group of post-60s such as Zhao Fujun, Wang Guoping, and Yu Hong retiring, Cai Ting, a post-85s, became the Deputy General Manager of Ping An Life Insurance, in charge of the channel center, product center, and financial enterprise center. Cai Ting also has a background in consulting companies and used to work at Accenture. After joining Ping An, he has gone through multiple positions in Ping An Group's Strategic Development Center, Human Resources Center, Ping An Bank, and other positions, serving as the Deputy Chief Financial Officer of Ping An Group and Assistant General Manager of Ping An Life Insurance. Wu Jianwei, the former Deputy President of Zheshang Bank, joined Ping An Life Insurance across industries and is expected to serve as the Deputy General Manager, taking on the heavy responsibility of the bank insurance business division. Gong Qiuwei, who has a background in retail business at Alibaba and other internet companies, became the Special Assistant to the Chairman of Ping An Life Insurance. Before that, Ping An Life Insurance also internally promoted a General Manager Assistant, Zhao Jin, who is a veteran of Ping An, having worked his way up from the grassroots to become a front-line backbone, serving as the General Manager of Ping An Life Insurance's Hebei branch and Zhejiang branch, among others.
In addition, to meet the needs of medical and elderly care + cross-industry talents, Wang YuKe, who has rich international elderly care industry experience, joined Ping An Life Insurance four years ago. In terms of medical talent, Ping An has a complete team of talents from Peking University International Medical Services. Li Dou, who previously worked at Procter & Gamble and Alibaba, also worked in the management of Ping An Life Insurance and served as the Chairman of Ping An Health last year.
Ping An Group Chairman Ma Mingzhe has classic personnel thinking in the industry - to use different talents at different stages. He has expressed on many occasions that Ping An used to be a small sampan sailing in a small river, and he was the captain of the sampan. After continuous development, today's Ping An is already an aircraft carrier sailing in the ocean. The skills needed to drive an aircraft carrier are naturally different from those needed to manipulate a small sampan, so it is necessary to find professional talents such as first mates, second mates, and sailors to help the captain drive the giant ship. Looking back at Ping An's development over the past thirty years, almost every major change has been accompanied by strategic adjustments, organizational changes, and talent upgrades. Currently, it is in the process of strategic upgrading to "comprehensive finance + medical and elderly care", and Ping An's personnel strategy includes both "pure Ping" cadres cultivated and promoted internally, and a large number of "parachutists" from other industries, becoming a new feature of its personnel strategy.
/ 02 / International insurance giants are all eyeing Ping An's talents
"Ping An's development strategy over the years has attracted the attention of many international companies," a senior insurance industry figure told reporters. The insurance industry is an ancient industry with a history of hundreds of years, but the direction of transformation and upgrading is facing various different path selection issues. For example, in recent years, a large number of American companies represented by insurance + medical health have grown rapidly, and Ping An's model is more unique, focusing on new trends in China's wealth and the pain points of medical care and elderly care, and deploying a comprehensive finance + medical and elderly care strategy, benchmarking Wells Fargo + UnitedHealth. Such a strategic model is not only unique in China but also globally.
In addition, Ping An's technological innovation over the years has also led the global financial industry. Its patent applications for financial technology and digital medical technology have been at the top of the world for many years, and its in-depth self-researched digital and intelligent capabilities and applications in financial insurance and medical health have also attracted the attention of many international financial enterprises.
"The above strategies and capabilities are the direction that the industry collectively thinks about and deals with. Poaching people from Ping An, even retired veterans, can relatively easily understand the essence of these models and strategies," said an expert in the field of human resource consulting.
That being said, Ping An is not the only one with a high status in China's financial industry. "This is because Ping An has a unique difference from state-owned enterprises," the expert believes. Ping An is not a state-owned enterprise but the most typical mixed-ownership enterprise in China, and its personnel strategy has always focused on both internationalization and localization. Ping An Chairman Ma Mingzhe often uses "inclusive" to describe Ping An's personnel approach, and as long as it is the right talent, regardless of background or nationality, Ping An will boldly introduce and open up for use. For example, before joining Ping An, Li Yuanxiang and Chen Xinying worked at Prudential Insurance in the UK and the top US consulting firm McKinsey, respectively, both of which are international companies.
In fact, in addition to Li Yuanxiang and Chen Xinying, in the past two years, international giants have also poached Ping An executives, including Chen Liming, who is now the CIO of Zurich Insurance and previously served as the CEO of a technology company under Ping An Group. Zurich Insurance is also a 150-year-old veteran international insurance giant. There is also Huang Yuxiang, who serves as the Chief Information Officer of DBS Bank and is also a former Ping An executive.
/ 03 / Industry follows cross-industry? AIA uses Ping An "old people"
Perhaps for the above reasons, AIA poached Li Yuanxiang with a high salary to serve as CEO five years ago. The AIA controlled by Li Yuanxiang has also undergone obvious changes compared to the past. For example, AIA has also proposed an insurance + elderly care ecosystem in recent years, increased "elderly care planners", cooperated with external health care service organizations, and launched comprehensive elderly care solutions. This year, it even followed and launched a residential elderly care section, which looks a bit similar to Ping An's one-stop "medical health + home elderly care + high-quality elderly care community" elderly care layout.
However, the industry evaluates that due to the lack of in-depth layout and integration in the early stage, it appears "similar in appearance" but "different in spirit". The resource preparation and system structure are still very weak, and it is only an extended value-added service, and there is no deep synergy with the insurance business. Absorbing Yu Hong to join highlights AIA's emphasis on the Chinese market and strategic layout, and on the other hand, it also indirectly proves the effectiveness of Ping An's recent life insurance reform, channel management, and digital transformation, which is recognized by the industry.
Will Yu Hong continue to poach talents from Ping An? "This possibility is not ruled out, but in fact, Ping An has experienced many industry-wide poachings. Ping An has a mature talent cultivation concept and mechanism, and its personnel operations are also systematic." The expert said: "People are relatively easy to poach, but in fact, Ping An's culture and system platform cannot be poached. This is also why one Li Yuanxiang is difficult to change AIA. Adding a Yu Hong, or a few Yu Hongs, may not be able to completely replicate Ping An's internal mechanism."
On the contrary, some investors in the capital market are slightly worried. An international investment bank insurance analyst believes that AIA has introduced many old generals from Ping An, including retired veterans, indicating that it is a follow-up strategy in terms of strategy and operations. AIA may only be able to follow Ping An step by step in the future, but "it lacks its own characteristics and advantages, which may not be a good thing for a foreign insurance company developing in China." Is AIA a follower? There are also many discussions among AIA insiders. But the future industry competition trend seems to be becoming clearer and clearer.