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Prof. Shangmei Zhao on “Chinese Insurance Hot Dialogue”:How to Achieve Breakthroughsand Development for Small and Medium-Sized Insurance Companies?

Publish Date: 2016/11/28 09:25:12    Hits:

Prof. Shangmei Zhao, Head of Department ofFinance at BUAA SEM, was invited as special guest to attend the 27th "ChineseInsurance Hot Dialogue" held on October 27, 2016 in Beijing. This dialoguewas co-organized by China Insurance News and ChinaInstitute for Actuarial Science of Central University of Finance and Economics.  

During the high-level dialogue, Prof.Shangmei Zhao discussed about “how to achieve new breakthroughs for small andmedium-sized insurance companies in the new pattern of marketization, specializationand diversification of insurance enterprises and how to enhance thecompetitiveness of insurance enterprises”.

Prof. Shangmei Zhao thinks that thecompetitiveness of insurance companies can be enhanced over the ways of specialization,internalization and market segmentation. On one hand, the current domesticinsurance industry has the single product structure and competition means. Onthe other hand, there are many areas where insurance industry is yet to enterand provide insurance protection services. For example, property and autoinsurance products have a large market share and are strictly supervised, whichhas become the Red Sea market. And there is an obvious shortage of supply inthe third party liability insurance, family property insurance, credit and guaranteeinsurance and comprehensive umbrella insurance products, etc. With theenhancement on public consciousness of insurance and the popularity of theInternet channels, these insurance areas will have a lot of room to develop.

Prof. Shangmei Zhao pointed out that largeinsurance companies and large Internet companies continuously explore and tryin these insurance areas. In order to take advantage in the current fiercecompetition, small and medium size insurance companies need to rely onshareholders, and universities or scientific research institutions forefront-endR & D needs (Beihang University has advantages in big data, Internet, blockchain technology, financial engineering and risk management, etc.). Small andmedium size insurance companies need to save the cost of human capital, and focusits resources on the part of the professional market segments and plates, whichwill take the advantages of flexible operation to expand the professional marketand obtain a relatively stable market share and underwriting profit. Specialization,internalization, market segmentation with professional management will be necessarychoices for the insurance companies to enhance the competitiveness in thefuture.

By Dr. Junhuan ZHANG, Department ofFinance, BUAA SEM.