In our previous blog, we did a comprehensive study on the SWOT Analysis of the largest broadband communication company in the United States, Spectrum. Here we will understand the SWOT Analysis of China Life.
Leading Life Insurance Group in China – China Life operations are carried out through the following segments: Property and Casualty Insurance business, Life Insurance, Reinsurance Business, and Other Businesses. And The Life Insurance segment engages in the underwriting of direct life insurance policies.
Another aspect that made China Life the massive it is now, is its marketing efforts. As the world goes online, marketing is changing and if you are curious about learning about the latest – check out our Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.
In this case study, we will learn about the SWOT analysis of China Life. But first, let us know about the company and the product better.
About China Life,
China Life Insurance Firm Limited is a Beijing-based Chinese company that offers life insurance and annuities. China Life is ranked 94th on the Fortune 2015 Global 500 list. China Life, with 70 per cent state control, is the largest life insurer in China in terms of total assets. It was incorporated in 1949 in Beijing China.
The company has a strong Chinese Central Government background despite being incorporated in Beijing. China Life’s major businesses are reinsurance, life insurance, property and casualty insurance, asset management, reinsurance brokerage, pension management, real estate manager, etc.
|Founder||China Life Insurance Group|
|No. of Employees||99,500+|
|Market Cap||$92.34 Billion (2022)|
|Annual Revenue||$116.639 Billion (2020)|
|Net Income/ Profit||$8.434 Billion (2019)|
Products & Services by China Life
China Life has been financial Industry for more than a century, and so it provides plans & services in:-
- Home insurance
- Auto insurance
- Motorcycle insurance
- Business insurance
- Life insurance
Competitors of China Life
China Life competes on a global level with many other insurance companies. The top 5 competitors of China Life are
- Aviva India
- Globe Life
- Midland National Life Insurance
- Physicians Mutual Insurance
- Ohio National Financial Service
Now, we have a clear picture of the company’s core business. Let’s talk about the SWOT Analysis of China Life.
SWOT Analysis of China Life
SWOT analysis examines the strengths, weaknesses, opportunities, and threats that a firm faces. SWOT Analysis is a tried-and-true tool that enables a company like China Life to compare its business and performance to that of its competitors.
It will give us a strategic analysis of its internal and external environment, which is crucial for understanding the SWOT Analysis of China Life.
To better understand the SWOT analysis of China Life, refer to the infographics below:
Below is an explicit guide to the SWOT analysis of China Life.
Strengths of China Life
China Life, being one of the leading companies in its industry, has several benefits that help it flourish in the marketplace. These strengths not only help it retain market share in existing areas but also help it break into new ones.
- Leading in its Segment: The second most powerful transnational corporation in terms of corporate control over global financial stability. Also, the list of leading insurance companies itself is one of the biggest strengths of China Life.
- Global Presence: China Life has worldwide recognition in more than 18 countries because of its strong work performance and reputed brand name that it has gained over the years.
- Affordable Insurance: China Life insurance company is the market leader and serves the people in France with insurance products that are low in rates but of superior quality.
- Financial Position: China Life has a very strong financial position in the market with consecutive profits over the years along with accumulated profit reserves which can be utilised for future expenditures or marketing activities.
- High Level of Customer Satisfaction: China Life has gained the trust of more than a million clients and has a very strong customer relationship management team through which they keep their current customers very satisfied and also enjoy a good brand equity status among potential customers.
Weaknesses of China Life
The weaknesses are a major drawback that stops the organisation from performing at its optimum level. They are the areas in which businesses can make improvements. The major drawbacks are as follows:
- Research and Development: China Life has a good share of expenditure on the research and development department but it is spending way less than a few of the players within the industry which have benefitted as a result of their innovative products.
- Market Share Dropped: After the Chinese government liberalised the insurance industry, hundreds of new rivals entered, and China Life’s market share has dropped by about half since 2007, from 50% to roughly 26%, according to Morningstar.
- Diversity in the Workforce: The local workers contribute to the majority of the workforce at China Life making it difficult for outsiders to adjust and hence resulting in the loss of talent.
- High Employee Turnover Rates: China Life has a very high employee turnover rate as compared to its competitors which means it spends a lot on training activities as employees keep leaving and joining.
- Low Interest: Low-interest rate structure in Hong Kong decreases the profitability of people buying insurance from China Life.
- Low Investments in Customer-oriented Services: Low investments in China Life Group’s customer-oriented services rivals may acquire an edge shortly. The China Life Group must enhance its research and development spending, particularly on customer service-oriented apps.
Opportunities for China Life
Opportunities are the favourable external factors that may give the organisation a competitive advantage over others. The opportunities of China Life are as follows:
- Possibilities in the Online World: Clients’ increasing acceptance of online services will allow China Life Group to offer innovative services to customers in the Insurance (Life) market.
- Social Media: Over the years the number of active users on social media channels has increased and with this China Life can make use of its social media handles to promote its products, interact with customers and even provide after-sale services.
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- Future of Insurance Company: Global life premium insurance growth is predicted to rebound to 3% with increased risk awareness owing to COVID-19 and global economic recovery set to accelerate the demand for life insurance products.
- Future Trends: The next 10 years will see the insurance industry moving from traditional to more customer-centric products. In the post-pandemic era, due to personalised services, the products are given based on information collected from external sources and devices.
- Transport Industry: The transport industry has been booming and is expected to boom in the next few years as well which has resulted in more auto insurance which is helpful for China Life to scale its business.
Threats to China Life
Threats are those factors that have the potential to provide harm to the organisation in any form. The threats to China Life are as follows:
- Technological Advancements: The technological advancements by a few competitors can pose a threat to China Life as today’s customers are more attracted to new technological advancements and may be lost to competitors’ offerings thus reducing the market share of China Life.
- Competition: There is always an ongoing competition that puts downward pressure on the prices. This could lead to lower profits if it makes changes in the price or may also result in lower market share if it doesn’t make price changes.
- Fluctuating Interest Rates: The interest rates keep on fluctuating and don’t provide a stable financial and economic environment.
- Illegal Selling: China’s top insurers, People’s Insurance Co. of China Ltd. and China Life Insurance Co. are accused of illegally selling insurance, overstating policy sales, inappropriate claim settlements, unlawful commission distributions, and “grey money” – off-the-books profits that business leaders shared among themselves. Without transparency, trust in firms that are revealed to be doing shady business is swiftly eroding.
- Exchange Rate: The exchange rate also keeps fluctuating and makes it difficult for a company like China Life because it extends service internationally while its suppliers are local.
- Gig Economy: Most organised companies across the world offer group insurance. Various online-based and reputed companies like Fiverr, Amazon Mechanical Turk, and others have entered the ‘freelancer’ population who work without any formal company allegiance. This has resulted in an enormous loss for the insurance companies.
This ends our complete SWOT analysis of China Life. Let us conclude our learning below.
China Life is a well-known insurance brand with a significant global presence. In the SWOT analysis of China Life, we observed that the company is heavily reliant and enjoys strong brand recognition and trust with its customers. It has a strong distribution network and has reached across all the markets it serves, but suffers from an increasing number of suppliers in the same space and better R&D efforts by its competitors.
Also, one point not to miss out on is that China Life is in line with its marketing effort. It has created a customer base for itself by tapping into the digital era and creating a social media presence on several platforms. If you are interested in learning digital marketing, don’t forget to check out IIDE’s 3 Month Advanced Digital Marketing Course.
We hope this blog on the SWOT Analysis of China Life has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.
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