Securities Times reporter Pan Yurong
Accidentally, Guo Qi became the most popular person in the Shanghai community this spring - "the head of the group".
"Materials fluctuate with market prices, and mood fluctuates with logistics." Guo Qi, head of a community in Pudong, Shanghai, told reporters.
She does group purchases for the residents of the three surrounding communities. She spends most of the day looking for sources of goods, sorting out forms, receiving and distributing materials, and it is common to be busy until midnight.
However, the feedback from the neighbors when they received the supplies made her feel it was worth it.
When the epidemic began, three of Guo Qi's family volunteered in the community.
Later, the situation became severe and supplies gradually became tight. Guo Qi became the head of the group and quickly became acquainted with the neighbors in the community.
Guo Qi has another identity: Taiping Life Insurance Agent.
Because of the inability to visit customers, during the epidemic, many of Guo Qi's colleagues became volunteers.
About 50% of the Wei Zhengxi team of Taiping Life Huangpu Branch, where she works, are volunteers.
In the team of Zhuang Meijie of Xuhui branch, about 30% of the business partners are volunteers.
They are also misunderstood at times.
Song Aiying from Jilin Middle Branch went to the community to report to the community and encountered a small embarrassment: community members heard that he was from an insurance company and thought he was here to sell insurance. changed attitude.
Insurance agents who are on the front line of the fight against the epidemic are trying to combine public welfare and insurance.
They went to the community when everyone needed them and helped the people around them to rescue and relieve difficulties. Some even became the middle force in the local volunteer team and gained the trust of the neighbors.
This kind of trust relationship is a force worth cherishing at a time when the insurance industry is undergoing deep adjustment.
"No policy, no income"
"Who has the logistics resources from Kunshan to Shanghai?" On April 22, Zhou Zhongzhi, an insurance agent in Suzhou, Jiangsu, asked in a circle of friends, helping his urgent customers find a little hope.
Zhou Chongzhi is also a volunteer.
Like many agents, during the epidemic, he was busy in the community while carrying the performance pressure of billing.
In mid-April, Zhou Chongzhi encountered a customer who lowered his insurance plan.
Because the client company had some difficulties, the original plan to pay a policy of 500,000 yuan per year may be reduced to 200,000 yuan.
Under the epidemic, all walks of life have been hit hard.
Insurance is one of them.
A business director in Shanghai said that because of the suspension of customer visits, the performance of some business partners has dropped to zero in the past few months.
From the questions he asks every morning, he can sense the anxiety of his colleagues.
On April 12, a reporter from the Securities Times sent out a questionnaire to the insurance agent group with the theme of "Insurance Industry under the Epidemic".
As of April 21, a total of 467 questionnaires have been recovered, and the top 5 provinces (cities) where the respondents are located are Shanghai, Jiangsu, Guangdong, Zhejiang, and Beijing.
Among them, the proportion of old agents who have been in the industry for more than 3 years accounted for nearly half.
When answering the question of "the biggest impact of the epidemic on your work", 34.48% of the people chose "influenced visiting customers", and 36.83% of the people chose "the customer's mentality has changed".
Among other supplements, "no insurance policy, no income" and "company treatment shrinkage" were mentioned the most.
When answering the question "The impact of the epidemic on compensation," an impressive 51.61% of agents chose "a reduction of more than 50%."
12.21% chose "reduced salary by 40%~50%", while only 4 people chose "raised salary", accounting for 0.86%.
In terms of "the most needed help at the moment", 60% of people hope to have measures to ease the pressure of assessment.
Regarding the survey results of "more than 50% of agents' remuneration has dropped by more than 50%", the business directors of many large life insurance companies in first-tier cities told reporters that this is not surprising.
Two directors added that since the COVID-19 outbreak in 2020, the income of salespersons has been very differentiated, and the performance of a few outstanding agents has still achieved considerable growth.
In this survey, since the samples are concentrated in Shanghai and Jiangsu areas that have been greatly affected by the epidemic, the above figures may not represent the national level.
But since the outbreak of the epidemic in 2020, the survival of insurance agents across the country has not been ideal.
This is the backdrop for the falling share prices of listed insurance companies (Figure 1).
Since the beginning of 2020 since the outbreak of the epidemic, the insurance index has fallen by 43.6%.
4 million agents lost
As incomes fell, a large number of agents left the insurance industry.
On February 23 this year, the China Banking and Insurance Regulatory Commission announced the practice registration of insurance company sales practitioners at the end of 2021. There are 5.907 million sales agents in the industry, a decrease of 2.521 million from the end of 2020.
Compared with the peak of 9.12 million at the end of 2019, the number of agents decreased by 3.21 million, or 35%.
According to a reporter from the Securities Times, in the first quarter of this year, the number of registered insurance salespersons in more than 50 small and medium-sized insurance companies decreased by nearly 500,000.
The listed insurance company with the largest number of agents did not disclose the latest data in the first quarterly report, but it is speculated that the number of agents lost in the whole industry in the first quarter has reached 1 million according to the internal communication data of the industry.
It should be noted that the number of registered agents officially disclosed each year is the net worth after the entry and exit of the year are offset. If only those who left the insurance industry are counted, this number will be much larger.
It is roughly estimated that since the outbreak of the epidemic at the end of 2019, the loss of insurance agents has reached 4 million.
Of the 2.521 million agents lost in 2021, 1.65 million are leaving the individual life teams of the five largest listed insurers.
Compared with the peak period around 2019, the number of agents of Ping An, China Life and PICC Life has halved (Table 1).
In the first-tier cities where insurance giants compete for every inch of land, most of the agents recruited at a high cost have not been retained.
Taking the Shenzhen branch of Ping An Life Insurance as an example, there were more than 40,000 agents during the peak period in 2018, but it dropped to 15,000 at the end of last year.
A business department of China Life Insurance in Shenzhen had more than 1,200 people at its peak in 2020, but now there are only about 300 people left.
The agent is called the field office in the insurance company, and the counterpart to the field office is the back office, which provides middle and back office support for the field office.
Field work has been drastically reduced, and internal staff are also facing layoffs.
It is reported that a large life insurance company plans to reduce back office by 20% this year.
With the reduction of internal and external staff, the business outlets of insurance companies are also withdrawing, transferring and merging.
Due to cost considerations, insurance companies will evaluate the required workplace space based on the number of agents in the next few years. After the workplace leases in some business areas expire, they will not renew the leases.
In 2020, Ping An Life started to merge business areas with agents below a certain number in some cities.
The Shenzhen branch of Ping An Life has merged from more than 50 business areas in 2020 to more than 40 last year, and further reduced to more than 30 this year.
In order to understand the situation across the country, the reporter counted the data on the administrative approval data of the banking and insurance regulatory bureaus in various places for the cancellation of business outlets of insurance companies in 2020.
In 2020, there will be 617 replies for revocation, which will increase significantly to 1,158 in 2021.
As of April 22, 2022, there were 244 approvals.
In terms of regional distribution, the top 5 with the most approvals for revocation of business outlets are Hebei, Jiangsu, Zhejiang, Hubei, and Sichuan (Figure 2).
Staff attrition is transmitted upwards
As the world's second largest insurance market, 70% of my country's insurance industry premiums come from personal insurance, and 60% of life insurance premiums come from personal agency channels.
The growth curve of China's insurance industry is highly related to the development curve of the agent team.
What kind of adjustment of interests has been caused within the insurance company due to the decline in the number of agents?
How will it affect the fundamentals of the industry?
The basic law of dismantling insurance companies can be seen more clearly.
In 1992, AIA first introduced the personal agent system to mainland China, ushering in a new era of life insurance marketing in mainland China.
The essence of the personal agency system is a set of basic laws for the performance appraisal, promotion, and salary distribution of agents.
The basic laws of domestic insurance companies are generally similar. Usually, agents are divided into salespersons, supervisors, managers, and directors.
Therefore, most insurance companies have agent ranks of 9, often referred to as the "pyramid structure".
The salesperson is the first rank after the agent joins the job. After reaching the company's performance indicators, he can be promoted to the supervisor.
Supervisors can recruit new people, which is the basic unit of organizational development. After the supervisors reach the corresponding premium and increase targets, they can be promoted to managers, and high-level managers can be promoted to directors.
There are two main incomes for agents, one is direct commission, which is the commission earned from selling insurance policies, and the other is indirect commission, which is organizational benefits such as management allowances, staffing allowances, and growth allowances that supervisors receive due to team management. Supervisors may also receive Renewal commissions for departing salespeople in the team (Figure 3).
Although the "pyramid structure" has 9 ranks, it is not "layered".
Each rank above the supervisor can add new employees, but the superiors of the new salesman are the supervisors and deputy supervisors who have a "blood relationship" with them. The agents of other senior ranks in the team do not participate in the commission distribution of the salesperson.
This design takes into account the flat management efficiency while encouraging organizational development.
Under the guidance of the Basic Law to encourage additional staff, developing manpower has become an important way for agents to obtain high salaries and promotions.
In the past few years, every major development of the life insurance industry is inseparable from the expansion of manpower.
However, when the vigorous "reinforcement campaign" turned into a "downsizing campaign", the whole process was reversed: salesmen who had no new orders and no management allowances tended to leave first, resulting in the division of commissions by supervisors, management allowances, etc. Organizational interests are reduced; new recruits are difficult to recruit during the epidemic, supervisors’ assessments are difficult to achieve, and they face the pressure of demotion.
The renewal commission of the resigned salesperson may be able to subsidize the superior supervisor to a certain extent, but each company distributes this part of the benefit differently, and some insurance companies will hand it over to the development team, thus breaking with the supervisors relation.
Dismantling the Basic Law is not difficult to find that the supervisor is the basic business of a life insurance company.
The 3-year epidemic has made some executives who have been in the industry for many years unable to stand it. Even with the cushion of renewal commissions, they are still unable to maintain a decent income.
This is the biggest difference between this round of agent loss and the past.
A manager who has worked in China Life for more than ten years told reporters that after the epidemic, he tried to transform the mobile Internet, operate the WeChat public account and Douyin for online transactions and increase staff, but with little success.
"The world of young people, I'm not used to it anymore, I feel like I'm going to be abandoned by the times."
A few months ago, Wan Feng, the former president of China Life, expressed his concerns in an internal sharing.
The core issue for agents, he said, is income.
Risk signals have now emerged.
The first half of 2021 will be the loss of salespersons. Starting from the fourth quarter, it will be the managers who will lose.
If the loss of supervisors continues, the life insurance industry team will not be able to stabilize and stop falling in 2022, and the future prospects are not optimistic.
Forcing the "Basic Law" to change
The core of the life insurance industry is the agent, and the core of the agent is the issue of income. How to distribute the income is determined by the Basic Law.
In the past, the Basic Law, which was oriented to the number of staff, had to be adjusted.
Under the epidemic, the increase of insurance companies encountered the largest waterloo in history.
Taking the industry exchange data learned by the reporter as an example, in the first quarter of this year, more than 50 small and medium-sized insurance companies added less than 100,000 employees, a year-on-year decrease of nearly 60%.
Affected by this, the first-year scale premiums and first-year standard premiums of the above-mentioned company groups in the first quarter both decreased by about 10% year-on-year.
In response to the new situation, companies such as China Life, Ping An, China Pacific Insurance, and Xinhua Insurance have stepped up their efforts to adjust the Basic Law. The mainstream direction is to change the distribution of benefits from encouraging organizational expansion in the past to increasing direct commissions and linking them to long-term performance.
In the new version of the Basic Law in 2020, China Life divided individual insurance into two teams: a marketing team and a development team, focusing on improving the quality of the team.
As of the end of December 2021, among the 820,000 individual insurance sales force, the sales force was 519,000, and the sales force was 301,000.
This year, China Life proposed to "drive business development with an effective team".
In 2020, Ping An of China has also optimized the Basic Law, which includes three specific measures: First, using cities as a unit, divide institutions into three categories: reform capacity-based, balanced, and human-based. Production capacity and manpower focus on high-quality additions to achieve differentiated management; the second is to stratify foreign agents, giving different policies to different agents, increasing allowances for newcomers, increasing incentives for outstanding performance, and increasing excellence with excellence. The third is to increase long-term investment, covering the three categories of newcomers, blue-chips and supervisors, and increasing the weight of some long-term indicators.
After CPIC Life welcomed Cai Qiang, the former regional CEO of AIA, in 2021, it also implemented the revision of the Basic Law.
The new version of the Basic Law, implemented on January 1, 2022, emphasizes improving team productivity, guiding sustainability, and encouraging long-distance runners; linking bonuses to the policy continuation rate and setting a guaranteed minimum value; linking the benefits of supervisors to the performance of newcomers in the next three years , to guide the supervisor in the cultivation and retention of newcomers.
What makes people in the industry remember deeply is that Cai Qiang led AIA more than ten years ago to get out of the bottleneck of the reform of individual insurance channels.
In 2009, during Cai Qiang's management period, in order to concentrate resources on serving high-end customers, AIA took the initiative to retire part-time staff and retained high-quality and high-capacity elite marketing staff. The scale of agents continued to shrink, from 24,000 in 2010 to 15,000 in 2013.
This "reverse action" at the time allowed AIA to experience the pain of declining premiums, but it laid the foundation for the rapid growth in the following years.
AIA is also the insurance company that has been less affected by the epidemic so far.
Basic Law reform, behind the redistribution of commissions and management benefits.
It will take time to see whether mainstream insurance companies can implement the Basic Law reform, avoid returning to the old road of "pulling people", and lead the industry to truly move towards long-termism.
bottoming out question
The glorious past 30 years of China's insurance industry are the result of "great miracles".
Ten years ago, senior executives in the insurance industry shouted that the "big in and big out" crowd tactics can no longer continue, and it has seriously damaged the credibility of the industry.
But at that time, it was not that the insurance companies did not want to change, but the "washing people" model of high recruitment and high turnover still worked. Reform meant taking the initiative to sacrifice and give up the current market share, whether it was shareholders, management, or grassroots organizations. It is difficult to have enough concentration to resist the temptation of interests.
Today, the gray rhino in the insurance industry has actually come to every practitioner.
The willingness of young people to enter the insurance industry is declining; the rise of inclusive insurance such as Internet insurance and Huimin Insurance has also increased the difficulty of traditional insurance sales.
In 2021, the insurance premium income will be nearly 4.49 trillion yuan, a year-on-year increase of 4.05% on a comparable basis.
The industry-wide data on new single premiums has not been disclosed, but according to industry exchanges, new single premiums fell for the third consecutive year last year, which means that the time for the insurance industry to climb out of the bottom will be delayed.
If the premium is the face of the industry, the new business value is the inside.
The new business value rate is an indicator to measure the profit rate of new insurance policies. In 2021, the five listed insurance companies that account for 60% of the life insurance market share will all have a decline in the new business value rate of more than 20% (Table 2).
At the beginning of 2021, some branches of large insurance companies have formulated double-digit growth plans according to the situation of previous years.
But at the end of the year, I had to bow to reality and apply to the head office for a lower performance target.
At the beginning of 2022, when the company formulated its annual growth plan, the expression "percentage of the maximum allowable loss" appeared.
It is understood that one of the operating goals of a large life insurance company this year is to control the decline in new business value within 24%.
"Seizing the opportunity to adjust the business structure and formulating a reasonable negative growth plan is also the correct way of development." Wan Feng appealed to the managers of insurance companies. The business development of life insurance companies is a slow job that requires continuous accumulation and development. The so-called "leapfrog development", " "Extraordinary development" is to dig a hole for oneself.
As insurance returns to protection, and as products shift to pension and health insurance, the rearrangement of industry seats will surely come.
The slogan of the transformation of the insurance industry has been shouted for many years. As the epidemic enters a critical stage, has the worst time for the industry come?
When can I see the bottom?
To observe the indicators that the performance of insurance companies has bottomed out, one is that manpower has bottomed out; the other is that per capita production capacity has increased.
When the increase in per capita production capacity can make up for the decrease in new orders caused by the reduction in manpower, it means that the premium for new orders will stabilize, the quality of the retained team will improve, and it will have the initial strength to get out of the trough.
The reporter learned from interviews with personnel of many life insurance companies that in the first quarter of 2022, the decline of agents of various companies continued, and there was no sign of bottoming out.
However, as insurance companies vigorously promote the transformation of sales force to specialization and professionalization, the signal of per capita productivity improvement has appeared.
In 2021, the per capita first-year premiums of Ping An Life's agent channel will increase by more than 22% year-on-year, the monthly per capita first-year insurance business income of CPIC Life's agents will increase by 42.3% year-on-year, and the monthly average per capita comprehensive production capacity of New China Insurance will increase by 4.1% year-on-year.
However, some people in the industry pointed out that the per capita production capacity of different types of life insurance products is not comparable, such as protection products and wealth management products are not the same.
The main products of each company are different, and the per capita production capacity will also be different, and this difference is not caused by the sales ability, but caused by the characteristics of the product itself.
The per capita capacity indicator still needs to be viewed with caution.
Another phenomenon worthy of attention is that the threshold for adding members of insurance companies is changing.
A business director of Ping An told reporters that not long ago, two young people with excellent basic conditions wanted to join Ping An Life. Both supervisors and managers had passed the interviews, but they were rejected during the company interview because "the supervisor's ability is not good". .
This reason surprised many business partners, but the business director believes that the recruitment conditions set by the company are justified. Some problems are not exposed in the early stage, which will cause greater losses to the team later.
Zhuang Meijie, director of Taiping Life Insurance Shanghai Xuhui Branch, told reporters that when her team recruited business partners, they valued whether the other party had a certain level of income before joining the company. Such newcomers can do business with a more calm and pure mentality. It can better connect with customers with economic strength, and it is easier to retain.
"The insurance industry really doesn't need so many people." Zhou Chongzhi believes that what the insurance industry needs most at the moment is a group of people with self-esteem, self-confidence, self-love, and a sense of awe for the industry to join and rebuild the industry's image.
The essence of insurance is mutual assistance.
During this epidemic, many insurance companies' internal and external staff went to the front line of anti-epidemic, and practiced the industry values of "everyone for me, I for everyone".
Wei Zhengxi, an old insurer who has been in the industry for more than 20 years, said that from the perspective of "not forgetting disasters and not wasting crises", every insurer should think about what they can do in the face of disasters.
The insurance industry should gather strength and play its due value in the face of disasters.
As insurers often say, "We've run so fast over the past 30 years, it's time to wait for the soul."