And so we’re still pretty confident that we will go for a short term adjustment. But the medium to long term outlook in terms of demand for insurance product in China still remains very, very robust. So look, obviously we think these guaranteed return products will put pressure on insurers investment capability in the declining interest rate environment. And as a result, we foresee that we could see some product mix changes going forward as well. For example, we see annuity products as a very attractive product category. We see elderly health insurance as an untapped market. Although, we have a large amount of people in China entering 60 years or above category, this is still a pretty young age group given China’s improving life expectancy.
And it could be a good risk category for insurers to underwrite health insurance. And lastly, we think the industry will also move towards more customized and differentiated products. We think what will be standardized is really these investment products, but we also see the opportunity for insurers to offer differentiated products through services.
Ben Lin: And maybe I’ll just add to Mr. Hu’s point that obviously there are some voices out there that the regulator should encourage insurers to also develop participating products in a low rate environment. But obviously, the industry concern is miss selling once you go through a period of selling guaranteed products. There’s always concern about miss selling when you move towards non-guaranteed products. Our take is that the only way to reduce this risk is through professionalizing the salesforce. And this is an area that we are a very strong advocate of.
Yinan Hu : So in terms of how we work with our suppliers, our upstream, the manufacturers insurance companies, we are taking a more defensiated approach now. We want to work with suppliers who have strong solvency margin, good investment capability and service capability. And with those suppliers, our intent is to codevelop defensiated products and services to meet the demands of our clients. So in terms of the challenges facing by our Open Platform, the challenge is really also the opportunity for us. Right now the sales process over the last decade, the sales process in China has been driven by the mass agent model, and the focus on digital tools was not very prevalent. It’s all about recruiting. And so that has led to a series of problems and challenges that’s facing by the industry right now.
But we think that these constraints are basically opportunities for us, right? So for a lot of the brokers, they’re constrained by capital, in terms of capital investment into technology, they’re also constrained by the fact that in a lot of the commission agreements they have with insurance companies. There is no specific mandate for them to invest in technology. But we think as the industry goes from mass agent to professional agency with a small number of insurers serving still the same size market or growing market there will be a need for automation of the sales process. And so we think the industry needs to invest in infrastructure to support digital and also artificial intelligent based selling. And that’s an area where Fanhua we think we have the resources and the experience to do this.
I mean, what we’re doing in terms of Open Platform is obviously something that’s quite new, not only in China, in my view, but across the region. But as you can see from our results over the last two quarters. Our execution on our Open Platform strategy is leading to more and more people recognizing that it is a very viable strategy. It is now one third of our business in a very, very short period of. So since August, obviously the industry numbers are pretty bad, and we recognize that a lot of our peers are basically facing growth challenges. They’re looking for new modes of growth. They’re looking for new tools to help them grow. So on the 25 September in Xinjing at 1010 headquarters, we are going to host Fanhua’ Open Platform Day to basically illustrate all our capabilities and what we can bring from them.
