Similar to the many garages where important technology companies have started, a London cafe may be considered as the cradle of the modern insurance industry. Lloyd’s Coffee House, near the River Thames, was a gathering place for mariners, merchants, and ship owners to discuss matters of interest to the community, including ship brokering, foreign trade, and the establishment of an auction market for the insurance market that later became Lloyd’s of London. From the burial of gold for use in the afterlife by the pharaohs of Egypt and the disaster relief reserves of ancient Babylonia, to modern insurance mechanisms, the insurance industry has constantly evolved with human society to meet everyone’s security needs.

In recent years, higher levels of income have improved the standard of living for many people. One result of this phenomenon is the decision to buy insurance as a means to manage risk. However, the complicated nature of insurance products can easily dampen the desire of new customers to buy insurance. Further, traditional insurance marketing methods, such as cold calling, telemarketing, and face-to-face promotions are not keeping up with the fast-pace of Internet era business relationships. People are no longer merely obsessed with insurance clauses — they are more willing to pay for their ideal way of life. Therefore, the insurance industry of the future will face more long-tail customers and have to deal with more scenario-based personalization and customization needs. Driven by a variety of factors in the current market, traditional insurance companies face the need to restructure their operating paradigms based on current customer behaviors and update their business models for greater innovation. By doing so, they will be positioned to provide customers with smart, one-stop insurance services through all marketing channels, from consultancy to purchase, and insurance claims to renewal.

The challenges confronting the legacy insurance industry are rising due to pressure from Internet start-ups that are opening new sales and marketing channels. Rising operating costs and increased efficiency are everlasting topics against the backdrop of an overall growth in business volumes year after year. Traditional insurers are looking for a more ideal way to survive.

Exploration and Breakthrough: CPIC Joins with Huawei to Move Towards Digitization

China Pacific Insurance (Group) Co., Ltd. (“CPIC”) is a Fortune Global 500 company. Founded in 1991, CPIC has grown into an integrated insurance services company with a full range of licenses that span life, property and casualty, pension, health, and agricultural insurance and asset management. Headquartered in Shanghai, CPIC has over 5,400 branches and a workforce of more than 90,000 employees. CPIC provides risk assurance solutions to over 100 million customers through a nationwide marketing network and diversified service platform.

With the rapid development of mobile Internet, CPIC is constantly exploring new technologies to improve business operations and customer services and, in 2017, officially announced its ‘Digital CPIC’ strategy. Core tenets of this strategy include a focus on ‘customer requirements-driven’ transformation by providing products and services based on customer insights; developing client applications through the creation of a smart technology engine; establishing a business and management sharing platform to create new tools, paradigms, and sectors. CPIC is committed to quickly implement its ‘Digital CPIC’ strategy and accelerate digital transformation in ways that embrace the Internet and integrate new technologies into the financial services sector.

Huawei is a high-tech giant with unmatched technical strengths that never stops researching, developing and exploring new technologies. An industry-leader in R&D and cutting-edge technology deployment in cloud computing, Big Data, and converged communications, Huawei shares with CPIC a strategic business focus that is dedicated to empowering digital transformation across industries.

With similar development philosophies and the aim to provide customers with better services, CPIC and Huawei signed a strategic cooperation agreement in September 2014. Subsequently, the two companies have set up a technology applications laboratory to jointly explore how new ICT technologies might be used in the insurance business.

Guided by the strategic cooperation agreement, executives from both parties frequently interact and communicate with each other. In June 2017, Kong Qingwei, Chairman of CPIC and Huawei Founder Ren Zhengfei met in Shenzhen, China and, two months later, again in Shanghai. Both parties have expressed the intention to fully capitalize on the joint laboratory to unleash the full potential of the two companies’ combined advantages. The shared goal between CPIC and Huawei is to provide consumers with a complete insurance service experience and to lead the next growth period for the insurance industry.

Omni-channel Digital Services: The ‘Digital CPIC’ Strategy

Unlike food, clothing, or housing, insurance is not a basic necessity of peoples’ lives. It is for this reason that the insurance industry will always face challenges in the marketing phase. Traditional marketing tactics relied upon personal referrals and door-to-door promotional approaches — neither of which scale efficiently and are better suited to one-time purchases. However, in today’s cloud computing and Big Data era, the insurance industry has innate data advantages, as it now more possible than ever to deeply mine and analyze business data, customer information, and media information to create 360-degree customer profiles. The result is the ability to more accurately target potential customers and discover a wider range of opportunities by market segment or channel to make product innovations and gain better insights into the dynamics of the insurance market. Markets become more competitive when insurance companies are willing to reshape their business models and service patterns.

In 2016, CPIC and Huawei launched a finance and insurance solution that was built on an IT infrastructure and Big Data platform. CPIC quickly set up a ‘Customer Data ATM’ processing system to mine and analyze hundreds of millions of customer-level data points, including age, education, income, family, and insurance purchase history. Based on the results, front-end business applications are fine tuned to deliver individualized customer insights with a single click. The system supports 4,000 nodes and delivers insight into customers’ personalized demands and assurance solutions.

In the past, when service activities for targeted insurance customers needed to be paused, the target customer groups needed to be selected and extracted from the database manually. This approach was inefficient, time-consuming, and constrained by the systems’ minimal concurrency capabilities. Customer service personnel were often unable to fulfill the potential needs for the affected customers within a shortened time period. Today, CPIC is making a difference by using open-source Solr and Spark database technologies that provide real-time batch data processing for applications with an average query response time of 3 seconds. CPIC’s customer service system is built on this platform to support multi-level, multi-dimensional keyword searches that achieve ‘instant results and second-level rendering.’ These new database technologies are paving the way for transitioning to more intelligent insurance services.

In addition, CPIC deployed Huawei’s Enterprise Cloud solution to optimize and upgrade its enterprise cloud. A new hyper-converged architecture that implements Software-Defined Storage (SDS) has greatly improved the response time for CPIC application systems. And, to accommodate an expected increase in concurrent access by future customers, CPIC and Huawei have designed and verified a Software-Defined Networking (SDN) solution for its data center network with good results.

Through 2017, CPIC and Huawei are continuing to deepen their cooperation in multiple fields, including data center and enterprise cloud construction, Big Data and Artificial Intelligence (AI), and digital security. The two companies are working closely to promote the construction of CPIC’s cloud data center infrastructure, create innovative industry applications, and improve digital security. Both CPIC and Huawei are expected to jointly explore and research further innovations for the ‘CPIC cloud,’ ‘smart customer services,’ and ‘digital risk control.’ Combined, all of these efforts are helping to accelerate the completion of CPIC’s digital transformation.

“For traditional financial services companies, digitalization is neither a label nor a trend, but a key factor that is crucial to the long-time survival of an enterprise,” said Yang Xiaoling, CPIC Vice President and Chief Digital Officer. “The CPIC digital strategy aims to innovate business models by leveraging technical advantages. CPIC is firmly walking the road to digital transformation, and we will continue our collaboration with Huawei to provide customers with convenient, high-quality insurance services.”

In recent years, Huawei has reported a fast growth of sales revenue in China’s financial services markets, with a Compound Annual Growth Rate (CAGR) of over 90 percent. Huawei’s products and solutions are being utilized by many customers in the insurance industry to help them fulfill their digital transformation goals. In the future, Huawei will leverage its forward-looking position in the technology industry to deliver strategic insights for its financial services customers to achieve digital transformation and further enable the transformation of the entire finance services industry.

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