Fosun Investment Philosophy

Fidelidade Human Touch: The ultimate competitive advantage.


By: Jorge Magalhães Correia, President, Fidelidade

Today, three years after Fosun’s acquisition of Fidelidade, it does not make sense to talk about integration anymore. We feel and we are proudly part of Fosun family!

Still, going back to 2014, the integration was smooth and very successful. We have built strong business, operational and cultural ties both with Fosun and other portfolio companies very quickly based on a relationship of trust, cooperation, strong communication and mutual understanding. All these elements were key to achieve this.

For example, today we work extensively with Peak Re, one of our main reinsurers, we sell insurance to ClubMed, Fosun is helping us setup our China representative office in Beijing, and we have leveraged relationship with Chinese insurers to promote new business for us in Africa. Fosun also helped us improve our investment methodology and sourcing of financial and real estate investments with a global perspective and with outstanding results.

 On the strategy and acquisition front, we cooperate extensively with Fosun teams in their projects namely in insurtech and provide them with further insights based on our insurance know-how. Also, we enjoy extensive support from the strategy, finance and legal teams on our international expansion projects in Africa or Latin America.

Overall, the fit between Fosun entrepreneurial DNA and Fidelidade strategy, skills and culture has proven very good. We had outstanding results based on this cooperation. We have reasons to be very satisfied and very proud to be part of Fosun family.

At Fidelidade our strategy definition starts, always, with a basic assumption: that a vast and speedy technological revolution is under way. In fact, when in April 2013, at a Fidelidade commercial meeting, I presented the image of what an autonomous car might look like, I could hardly have imagined that just three years later, in 2016, this car would no longer be just a project, but actually a reality, and that it would have managed to drive itself, autonomously, from the city of Vigo, in northern Spain, to Madrid. When, in the year 2000, President Bill Clinton presented the results of 10 years’ work and an investment of 4 billion dollars to decode the human genome, I also couldn’t have imagined that it would now be possible to do that in 24 hours, using a small machine that costs around 200 USD. When, in 2002, Larry Page, the founder of Google, was asked about the aim of Google, a company which at that time was making a loss, he replied that the aim was to create Artificial Intelligence, something which few people knew about then.

Well, who could have imagined that Artificial Intelligence would now be present in our daily life, on the phone we carry in our pocket, which gives us tips on what to read, which music to listen to, which route to follow, and so on?

There’s little doubt that we have entered a phase of exponential acceleration in knowledge and technology. I’m not sure if we’ve reached the stage that some authors refer to as singularity, where humans and machines merge, and I’m not sure if we should reach that stage.

But even though that that time is coming, the reality is that our brain, the brain of all the people in the world, hasn’t changed in the last few millennia. And it hasn’t got bigger, it weighs around 1.5 kilos, and it doesn’t have more neurons, or a greater processing capacity, which are about 100 billion instructions per second.

A lot has changed in the world, but there are literary works, like the Odyssey by the Greek poet, Homer, that we have been marvelling at for almost 3000 years. Or philosophical works, such as the teachings of Confucius, taught to his students around 2500 years ago, which remain current and continue to be a source of inspiration. Or artistic works, like the paintings of Hieronymus Bosch, which you can see in the Museum of Ancient Art in Lisbon… Paintings which, 500 years later, even the most imaginative surrealist painters cannot beat. Or even works of scientific thinking, like the theory of relativity that Albert Einstein came up with using a simple pencil and paper, and his brain, which is something the most powerful computers are still checking. In other words, the essence of our being hasn’t changed and is indifferent to technology.

We continue to love our children, just as our parents loved us. Grandchildren, despite their smartphones, still love, and learn from, their grandparents. We are capable of making some more consensual choices. And, sometimes, less consensual…

Deep down, we are all looking for the same thing. We are all looking for love. We are all looking for someone we can trust.

And it’s for all these reasons that at Fidelidade we believe that the companies of the future will have to be technologically advanced but also truly human.

Being technologically advanced, for an insurance company, means using information intensively. An insurance company is merely a collection of information organised to predict the future. The development of the insurance industry has gone hand in hand with the development of the science of statistics.

I think the incumbent players, like Fidelidade, have a big advantage investing in C2M: we already have the trust of the clients and the credibility of our brand. That said, Fidelidade is exploring C2M in two ways: product and distribution channels. On the product side we are going to launch this year a new innovative online savings platform, a product that will allow tailor-made saving goals, with several level of guarantees for different risk appetite. On the distribution side, Fidelidade is exploring C2M through optimization of distribution channels, implementing an Omni-channel model that will ensure a seamless and consistent customer experience for all clients, according to their preferences.

But, Fidelidade will also have to be a company which is truly human. And so, what exactly does that mean? It means, first of all, that it has to be an authentic company, because nowadays there’s less and less room for propaganda and showing off: you either are, or you aren’t. Pretending won’t cut it. Then, it also means that it has to be a humble company, since we are here to serve our clients. Humility is compatible with pride in a job well done, but it’s not compatible with arrogance, which, in fact, is the virus that kills most organisations. And, lastly, it means being an example of citizenship. On this point insurers have an advantage. We don’t only need to have consideration for our clients, naturally, but we also need to have consideration for people who have been harmed and who are not are clients (for example, victims of traffic accidents caused by our clients). We treat everybody the same way, with the same care, and we have demonstrated this in thousands of cases every month, and probably in over a million cases in the last decade. Is it worth asking why we act in this way? We act in this way not only because we believe in these values, but also because we know that it’s better for business. It’s not a question of philanthropy. It’s a question of doing business in the best way. And that’s what I would like to stress.

Contrary to what one might think, this way of being at Fidelidade has proved to be highly profitable, not only because we become less dependent on price than our competitors, who have little to offer to the community in terms of service quality and humanism, but also because we mitigate the reputation risks that are common in the insurance business, which, as we know, intervenes in many situations of conflict and even hostility.

At Fidelidade, to be humble, human, responsible, are not just some fancy theoretic words. We put all these concepts into practice. Firstly, through an attitude or stance which makes the entire organization flexible, from the Chairman to the assistant. An attitude that we have called “We Care”. “We Care” is a kind of seal of commitment. We try, not only, to meet our obligations as insurers, but we go beyond that and exceed our clients’ expectations. This central pillar in our activity is then complemented by a range of specific actions distributed to and developed by different areas of the company, which I, myself, coordinate directly, as CEO, to guarantee that we never lose the focus from our unique and truly competitive advantage: our extraordinary human touch.

The new Chinese year will be the year of the dog, the symbol if Fidelidade. So we believe that will be a good year for Fidelidade. We continued focused on long term value creation and international expansion. We will keep investing in innovative protection solutions and promoting high standards of service quality. Regarding our financial targets, despite the challenging environment ahead, we aim to increase our Life and Non-Life premiums, improving our technical margin, combined ratio and net income and profits. I think Fidelidade keeps on the right track of growth, but it is fair to say this could only be true with Fosun teams strong support in different areas, such as investment, capital and M&A. And more than anything else we have to thank Fosun for the trust and autonomy consistently given to our management team.