This article only represents the author's own views.
For companies operating in China’s ever-evolving insurance market, the ability to trim fat can be just as critical as policy sales. Nothing shows that more clearly than the latest results from three of the country’s top online insurers, Waterdrop Inc. (WDH.US), ZhongAn Online P&C Insurance Co. Ltd. (6060.HK) and Fanhua Inc. (FANH.US). Among that trio, the purely digital pair of Waterdrop and ZhongAn are having greater success in taming costs than the older-school Fanhua.
At the end of the day, all of these companies are coming to realize that investors may like growing premiums, customer numbers and revenues. But they like big profits even more – especially growing profits from the group’s core insurance business. That can be hard to do while spending aggressively to find new customers, especially in a fickle Chinese environment where frequent new rules can sometimes send short-term chills through the market.