Jun Liu / Chief Strategy Officer
Perspectives from a life in leadership.
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When China's maximum pricing rate for life insurance is cut, insurers race to sell the old rate before it disappears. The rush looks like good business for a quarter. It is a decision to carry a liability for forty years, and boards should treat it as one.
Read the essayWhen China's maximum pricing rate for life insurance is cut, insurers race to sell the old rate before it disappears. The rush looks like good business for a quarter. It is a decision to carry a liability for forty years, and boards should treat it as one.
Chinese life insurers attach rights to live in their retirement communities to large savings policies. Issued without a count of the apartments behind them, those rights become promises that cannot be kept. They should be capped by capacity and reported to the board as commitments.
Chinese life insurers still compare themselves by premium income, and banks allocate shelf space partly by the same table. For a mid-size insurer, chasing rank through single-premium bank savings destroys more value than it creates. The scoreboard should be value per partner and capital consumed.