Ping An dangles insurance jobs to laid-off teachers and tutors from China’s edtech crackdown to replenish its shrinking sales force
- As many as 10 million teachers are set to lose their jobs after the latest crackdown by Beijing on private tutoring, analysts say
- New policy sale amount fell 12 per cent year on year in the first half while the number of its agents decreased 23 per cent, or almost 270,000, during the period
“Education is one target segment for our agency recruitment, as [teachers and tutors] generally have good academic qualifications and personal communication skills” that are essential for success in insurance, said Ping An’s co-chief executive Jessica Tan Sin-yin, during a phone interview with South China Morning Post. “We also want to create new employment opportunities to the teachers who need to develop a new career path due to the new regulatory environment.”
The plan underscores the realignment in China’s labour force amid the slowest economic growth pace in decades, after the government unexpectedly unleashed a wide-ranging slew of reforms last month that essentially turned edtech, online education platforms and tuition centres into non-profit organisations. As many as 10 million teachers stand to lose their jobs, Credit Suisse said in a report last week, adding that the layoffs could be a fount of talent for Ping An and other insurers with good training programmes, such as AIA.
“Insurance is viewed as a potential career alternative for tutors, as both professionals emphasise interpersonal skills, and play an inspiring and mentoring role,” Credit Suisse said in its note.
Sales of new insurance policies fell 12 per cent in the first six months of the year, while the number of Ping An’s agents shrank 23 per cent, or by almost 270,000, from 1.15 million at the end of June 2020 to 877,751. The shrinking sales force was due to the agency reforms that Ping An introduced last year as it sought to improve the quality of its agents and manage out the unproductive people. The Shenzhen-based company raised the bar of hiring to keep only those with good academic qualifications and those who can pass through intense training and tests.
“That was a painful process, but we believe that it is the right direction to go,” Tan said. “The speed of hiring high-quality agents is slower than the speed of cutting down the poor performing ones. This has affected our sales in the short term but we believe such a strategy would bring in healthy development for our company in the long term.”
Ping An’s first-half profit also fell because of a provision of 35.9 billion yuan (US$5.54 billion
) for impairment losses and adjusted valuation of its investments in China Fortune Land Development, a developer that counts the insurer as its second-largest shareholder.
Ping An, which owns 25 per cent of Fortune Land, has already made a provision that represents over 60 per cent of its total exposure in the developer as it struggles to repay the interest and principal of loans estimated at 82 billion yuan, Tan said. The insurer may need to have more provision in the second half but it would not be substantial, she said.
“The lesson we learn from this experience is not to have a high concentration of investment in a single company,” Tan said. “We will review our risk management system to prevent the same mistake from happening again.”
