Thursday 05 June 2008
Thursday 05 June 2008
With 4,000 agents and 630 staff internationally, the current CEO of Sun Life Everbright China, a 50/50 joint venture (est. 4/22/02) insurance company with China Everbright Group (a state-owned financial services company in banking, etc. since 1983, whose CEO is the son of the former VP of China)), was promoted to the CEO position approximately 9 months ago after being involved in sales and distribution for the last 3 years, 3 years in marketing, with involvement in forming the company beginning on 9/11/00. He is from Hong Kong and had earned a degree in economics. He joined the Hong Kong government after school and investigated corruption for 8 years prior to moving to Canada. There, he became a licensed agent and moved up through the ranks of Sun Life in Canada.
Sun Life is in China, India, Indonesia, and the US (highest population countries with huge growth in the first three). He predicts that Tianjin will become the financial center for the north of China. The high speed rail that will come on line within 1 month’s time will reduce the transit time to Beijing from 75 minutes to around 30 and they expect to have trains leaving every 3 minutes during rush hour.
Each city has different regulations on top of the National and Provincial laws. Thus licensing can take some time and they have a VP dedicated to “government affairs.� 40% of the 11,000,000 people live in Tianjin proper with the remaing 60% being distributed in the more rural area. Given average monthly salaries of 2,500 RNB (recall 6.9 RNB/$), the products tend to be smaller and he estimates that 50% of the population can afford to purchase their products. The product mix consists of Endowment or Investment products, Health Insurance products (hospitalization, surgical, critical disease lump-sum payouts—no outpatient insurance), and life insurance (least favored by the Chinese). There is no disability insurance in China at the moment.
The growth in the company’s premiums is reported to be 110% per year over the last 6 years. The company’s stock is not yet listed as they are required to show a profit for the last 3 years prior to listing, and the breakeven for this venture is 7-10 years.
As CEO, his attention has shifted as he must (1) set the direction of the company by rolling out a strategy for various departments to follow, (2) act as a link between the company and its Chinese and Western shareholders, and (3) interview direct reports and their direct reports as he builds the right team to the point of feeling like an HR director. His leadership challenge involves the diverse, yet Chinese thinking of his employees and the way they communicate; he must adjust his style to that of the Chinese way. His statement reinforces the previous HR lecture. Many more questions, so little time. Good visit.
Afternoon lecture at Nankai University about Family Businesses in China. In the ‘80’s when China permitted businesses to form, most educated people were uncertain of the business environment and therefore chose not to enter into any kind of business. Thus, the only people who began businesses were those who were uneducated without other opportunities and those who, for example, were recently released from prison. Thus there is an “original sin� associated with most businesses as they had to bribe lots of people to exist and profit. Now, most Chinese look at the very rich with suspicions stemming from these earlier days. In fact, most business students at Nankai like to take jobs at the big state owned companies in electric and telecommunications and banks. However, this professor’s MBA students take jobs at the private family businesses after they learn of the opportunities from their professor. The original founders often have need for professional management given their lack of original knowledge. I was uncertain as the professor’s belief in the invisible hand of capitalism moving the economy forward, given his excessive talk of additional stake holders and charity. Interesting lecture.
Dahui bought the group and Chinese students dinner at Ding Ding Xiang hot pot restaurant. Good fun. Later met up with a friend at a coffee shop and eventually Hanks Place.