Understanding What’s Behind China’s Booming Insurtech Scene

Understanding What’s Behind China’s Booming Insurtech Scene

by November 4, 2019

In 2013, ZhongAn was established as the first online-only insurance company in China. Since then, the insurance industry has undergone tremendous changes driven by advances in technology.

China’s insurance market has grown rapidly over the past few years. In 2017, total primary premiums in China hit RMB 3.1 trillion, making the nation the second largest insurance market in the world, according to a report by ZhongAn Fintech Institute and KPMG China, titled Insurtech: Infrastructure for New Insurance.

Online insurance has achieved even faster growth, with online insurance premiums increasing by nearly twentyfold over the last five years from RMB 11.07 billion in 2013 to RMB 183.53 billion in 2017.

China’s booming online insurance has been supported by the nation’s innovative insurers which have not been afraid to experiment with new technologies.


ZhongAn: China’s first online insurer

For ZhongAn, China’s first and largest insurance company to offer and sell products through the Internet, digital innovation has been at the heart of the company’s strategy.

ZhongAn’s powerful digital capabilities allow the company to settle claims nearly instantly, and its use of behavioral data from more than 300 partnerships enables it to identify moments in which the customer can use an insurance product. ZhongAn Elf, an intelligent insurance consultant, leverages artificial intelligence (AI), cloud computing and big data to determine relevant issues based on the customer’s verbal statements, and then provide an insurance plan according to the customer’s specific life plan and needs.

ZhongAn has also been an early adopter of blockchain, establishing in 2016 ZhongAn Technology, an incubator to research AI, blockchain and cloud computing, in partnership with Ethereum. The company is also engaged in the Shanghai Blockchain Enterprise Development Alliance, a group of 50 companies looking to promote technical co-creation in the space.

These digital capabilities not only allow ZhongAn to make its processes very efficient and save costs, but also create channels through which the carrier can sell its insurance products.


How incumbents are embracing insurtech

Though ZhongAn was the first pure player to enter the market, incumbents such as Ping An Insurance, Taikang Insurance Group, and Sunshine Insurance Group have too been innovating, not only by partnering with small innovative companies, but also by driving innovation internally.

Ping An, the world’s largest and most valuable insurer, uses cloud technology to link its underlying customer databases, core claim management platforms, and an AI risk management system with the goal to create an intelligent motor insurance claims-handling system. Claims can be settled online in under three minutes, and chatbots answer callers’ inquiries with 95% accuracy.

Ping An has invested US$7 billion to date into technology and research and development (R&D) and plans another US$15 billion over the next decade.

Taikang, the fourth largest life insurer by premium income in China, has created Health Cloud, an integrated insurance and health ecosystem aimed at connecting thousands of “data islands” to create a single customer relationship management (CRM) system with common IT, infrastructure, and data standards.

Taikang also uses Baidu’s facial recognition technology to verify customer identities online. The method is used to sell insurance through WeChat, provide after-sales services, as well as to conduct insurance confirmations, return visits and other processes.


New entrants to keep an eye on

Besides the established insurtech players, several relatively new companies have emerged over the past years. These include for example Baoxianshi, an insurance platform developed by Weiyi Technology. Baoxianshi develops tools that streamline lead generation for agents whilst also providing a white label platform for agents to manage their customer base.

iYunbao is an Internet insurance product platform developed by Shanghai Leopard Cloud Network Information Service Company designed to enable insurance agents with technology abilities. The platform offers mobile insurance, convenient claims processing and an online settlement function.

Tencent’s insurance platform WeSure said in December it had attracted 20 million monthly active users, while Xiang Hu Bao, a health care coverage product by Ant Financial, has gained 65 million clients since its launch in October. Ant Financial’s Xiang Hu Bao product enables users to pay a small monthly fee that goes into a pool to help members stricken by serious diseases.