Trying to find a success story in the financial industry from the past few years can be nearly as difficult as trying to untangle the global economic mess. With so many firms lying in ruin, it is a surprise to come across one that has managed not only to grow in its home country, let alone entering foreign markets.
Cathay Life, based in Taiwan and with a steady growth record since 1962, has achieved in the last five years a feat unheard of among its competitors: entering the larger China and Vietnam markets.
The accomplishment owes thanks to the winning combination of strategic organisation, a well rounded risk management framework, strong cross-selling capability, and a clear focus on customer satisfaction.
Cathay Life, a member of Cathay Financial Holdings, recorded a total asset of NT$2,742.87bn in 2009 and boasted over seven million customers holding ten million policies. The company is the leading life insurer in Taiwan and has been dominating the industry for more than 40 years.
Notwithstanding a global recession, the company has managed to maintain growth and expand to larger markets in emerging Asia. “For the last five years, Cathay Life has successfully entered the China and Vietnam markets at full speed, and Cathay Life is the first Taiwanese insurance company to expand into these countries,” states Chang-Ken Lee.
“Cathay Life began to develop business in Shanghai in 2005 and there are now eight branches (including the head office) in China. In 2008, Cathay Life also began to develop in Ho Chi Minh City and there are now five branches (including the head office) in Vietnam. Cathay Life strives to become the best financial institution in Greater China and emerging Asia.”
Key elements of success
It is in organisation and dedication that this insurer excels, as it seeks not only growth for the company but also profits for the investors.
“Cathay Life defines long-term success as our abilities to enhance shareholder value, to meet customer needs, and to keep the best talent in the industry,” Chang-Ken Lee explains.
Cathay Life stands among the Forbes Global 500 on its strength in the five key areas including a well-rounded risk management framework, strong cross-selling capability, new business value creation, innovative service processes and a culture of sharing.
“Cathay Life exercises strong enterprise risk management to control its major risk exposures. As the largest domestic life insurer with a good business track record, Cathay upholds a prudent risk management philosophy along with a proactive practice.
“Riding on strong financial strength and cross-selling synergy, Cathay Life’s new business premium income achieved a 27 percent yoy growth at a 28.3 percent market share with an all-time high of NT$261.6bn in 2009. Institutions to survive this crisis with their financial strength intact are taking over market shares from their weakened competitors.”
In terms of new business value creation, it includes face-to-face communications by which the agents design tailored financial solutions for individual customers. A sales force of 27,000 is the largest in Taiwan, producing a market share of 32.2 percent in terms of new business premium from the agent channel in 2009.
“In terms of the agent channel, Cathay Life holds the largest market share in the industry. Moreover, Cathay Life takes the lead in the industry and develops the most diversified distribution channels including banks, direct marketing call centres, business service counters in airports and the student group insurance service network to create new channel value and profits.”
Maintaining competitive advantages
Cathay Life is very proud to be offering services that run across a multi-channel service platform, providing clients with a more user friendly communication portal. They employ sales agents to offer not only advice on a variety of topics including how to minimise financial risks, but also a comprehensive financial planning service.
Furthermore, the call centres provide customer care regarding enquiry or feedback, whilst the company website offers extensive information.
Agents are provided with a state-of-the-art learning platform to encourage personal growth and development. This platform offers the employees of Cathay Life online learning opportunities as well as an in-house satellite channel through which all agents in the company can “share their own knowledge and experience”. Indeed, one of the company’s goals is to be a “learning organisation”.
Strengthening customer relations
It is not just about reaching the top of the financial sector that has been the force driving Cathay Life. The company also harbours strategies to ensure that it stays there.
“We believe we have achieved sustainable growth because it is based on the value that we bring to our clients,” Chang-Ken Lee points out. “Life insurance is a people-oriented business. Cathay Life is devoted to fulfilling all aspects of customer needs.”
For more than 40 years, Cathay Life is constantly motivated by its commitment to serving the customers while strengthening the communication channels. The company’s practice of human resource management and corporate social responsibility makes Cathay Life the brand of choice for many in the market for life insurance.
“Our decision making process is customer-orientated and we make the best effort to ensure timely and accessible services. Cathay Life has realigned its brand promise in recent years to ‘Customer First in Pursuit of Excellence’ as we are eager to create value for customers and to exceed their expectations.
“Last but not least, consistent, innovative and value-added services as well as fast and satisfactory solutions for client complaints further demonstrate Cathay Life’s long-term commitment to our customers.”
A culture of ongoing service innovation is the backbone of Cathay Life’s competitiveness. Some examples of success include outbound customer care, one-stop services, online applications offering company updates and payment advance services which allow hospitalised customers to claim medical expenses advance payments to cover the costs of treatment without going through a formal claim process.
Moreover, a customer complaint management service is in place to provide attentive and courteous assistance. As a member of Cathay Financial Holdings, Cathay Life enjoys the advantage of shared resources from other member companies which are made available to its policyholders in a variety of benefits including 24-hour free towing services and complimentary triennial physical examinations for VIP customers.
The wide array of benefits and services offered by Cathay Life has impressed not only the consumers in Taiwan but also those in China and Vietnam, a fact that positively fueled the company’s ambition for further expansion.
Risk management at Cathay Life
Constant vigilance as well as flexibility and adaptability are all encompassed in Cathay Life’s strong suits. The ability to control major risk exposures earned the company a score of Strong in Enterprise Risk Management by Standard & Poor’s in 2008.
Consequently, Cathay Life has remained a profitable business during the global recession rather than exiting the market as many of its competitors did.
“The unsettled economic environment brought a company’s financial stability into focus like never before, especially with regard to certain key factors – net worth, liquidity, and the quality of investment portfolios. In 2009, we bolstered our net worth and liquidity positions, both to enhance our ability to pursue business opportunities and to provide ourselves with a buffer against adverse conditions. Our net worth rose from NT$53.9bn to NT$113.1bn and we overweighed cash position from 11 percent to 16 percent of our invested assets during the year.”
It is the future of Cathay Life that holds much intrigue. The emphasis on a close partnership with the customers is most admirable and the company’s commitment in this aspect is evident.
“In adherence to our promise of ‘Customer First in Pursuit of Excellence’, Cathay Life will continue to safeguard customer rights by employing well-educated and dedicated professionals and providing excellent agent training and by upholding marketing ethics.
“We aim to satisfy customer needs by providing a regular and active telephone consulting service as well as various customer-friendly services.
“We intend to increase marketing and service efficiency by integrating resources under Cathay Financial Holdings and by employing the advantage of CRM (customer relationship management) to find our target customers. Also, we will continue to develop business in China and Vietnam while monitoring trends and opportunities in other overseas markets and aiming to become the best insurance company in Greater China and emerging Asia.”
Ultimately, Cathay Life wishes to expand upon their proven business plan and offer a variety of products and services to be enjoyed by consumers throughout Taiwan, China, Vietnam and perhaps one day further afield, a vision driven by an emphasis on building customer relations.
“Based on the long-cherished principle of dependability, Cathay Life Insurance will continue to offer quality services with professionalism and innovation, part of our existing business philosophy. Moreover, we aim to build lifetime partnerships with our customers and remain committed to continuously outperforming ourselves towards becoming the best financial institution in Greater China and emerging Asia.”