The insurance industry is on the brink of a major transformation, driven by factors such as macroeconomic development, changing consumer expectations, technological innovation and increased competition, according to a recent insurtech report by jointly published by ZhongAn and KPMG.

In recent years, China’s insurance market has grown rapidly. In 2017, total primary premiums in China hit RMB 3.1 trillion, making China the second largest insurance market in the world. Online insurance has achieved even faster growth than the industry in general.

Over the last 5 years, total online insurance premiums in China have increased by nearly twentyfold, from RMB 11.07 billion in 2013 to RMB 183.53 billion in 2017

However despite that, traditional distribution channels still occupy the largest share of the market. In the life insurance sector, agents and bancassurance have accumulated over 90 percent of premium income.

Compared with traditional channels, online channels are characterised by more scenarios, more customer interaction, and stronger buying initiatives. However, the value per customer transaction is relatively low.

New Technologies to Shape the Next Era of Insurance

The report posits that technologies like cloud computing, big data, artificial intelligence, blockchain and IoT will be key in shaping the insurance industry of the future.

It pointed out that cloud computing cloud computing technology has developed, the demand for the accumulation, management and analysis of large amounts of data has stimulated the demand for big data technology.

The technology has also brought in many benefits including the ability to implement more precise and intelligent operations in customer marketing, product development, risk pricing, and underwriting and claims.

There were several examples of how these technologies were being deployed in China including how PingAn uses a combination AI, big data and cloud computing to enable customers instantly make insurance claims for their vehicles.

After a customer uploads pictures of the vehicle damage, the system automatically determines the part of the vehicle that was damaged. It then provides repair opinions on that part, sends the information to local repair shops, and displays their working hours and price quotes.

Thanks to this the entire claims process is automated and the system boasts to have an accuracy rate of over 90%.

“For the last couple of years, insurtech has been broadly promoted and applied. For now, as we step into the intermediate stage of insurtech, insurance and technology will integrate even more closely,” said Jin Chen, CEO of ZhongAn Insurance.

“Based on the constant evolution and application of new technological innovations, we believe that the insurance industry in China will continue to upgrade and new systematic solutions will continue to emerge, bringing new growth.”

Shanghai-based ZhongAn was co-founded in 2013 by China’s most prominent businessmen: Jack Ma (Alibaba), Pony Ma (Tencent) and Mingzhe Ma (Ping An) with the idea of creating China’s first insurance company that sells products over the Internet.

Today, the company boasts more than 400 million customers with over 10 billion policies sold, is part of five major ecosystems with more than 307 ecosystem partners, and there’s talk of an overseas expansion into Japan.