“Insurtech has shaped a new industrial model in insurance. New technologies have empowered the traditional insurance industry while driving the development of a new ecosystem. With the support of cutting-edge technologies, the insurance industry has expanded, become more open and integrated. This new organizational model focuses on risk management services and has insurance institutions at its core. Jin Chen, CEO of ZhongAn Insurance, the world’s largest insurtech startup, said (if you can still call it startup): a tech company first and foremost, with hundreds of insurance products, millions of customers in just a few years, backed by some of the biggest names in Chinese technology, such as Alibaba, listed on the Hong Kong Stock Exchange, with a market cap of about HKD 25 billion (USD 3.2 billion). ZhongAn is also one of the few companies to have also obtained a virtual bank license in Hong Kong a few months ago.
Obviously the CEO of such a company can only firmly believe in digital and insurtech model, an insurance scheme where technology leverage is the basis of everything: risk management, business organization, distribution, business model, services, claims, marketing, customer relationship.
Digital brings so many and such benefits to the insurance world that insurtech is the only possible model for the future of the industry, this model allows this industry to grow and prosper, quickly seizing all the opportunities that come from a market influenced by mega-trends such as population and middle class longevity and growth.
KPMG China agrees with this approach and together with ZhongAn Fintech Institute has published a very interesting report: Insurtech: Infrastructure for New Insurance.
The report, which draws its findings from Chinese market data and a series of interviews with industry managers, notes that Chinese insurance business has grown dramatically in recent years, and although traditional operators and channels are leading the way in terms of market share, the speed and pace at which digital insurance is growing is much higher, as is also the case in other countries.
Interviews show that ‘insurtech’ is an issue that will have a big impact on industry professionals, and the timing of the changes are estimated over a five-year period on average.
Digital transformation has just begun
Technologies like Big Data, Artificial Intelligence, IoT, Cloud, Blockchain, 5G, can have a huge impact on the insurance world and although they are already used by Companies, this digitization is just beginning. A more advanced use of these technologies is needed, their mastery, as they will be the fundamental basis for shaping the new insurance value chain and developing new ‘production’ approaches.
The paper analyses the impact of major insurance technologies and how they can still be exploited to improve the industry, bringing efficiency, stability, humanity, diversity.
In the past, says the report, we have spent a lot of time learning how to use new technologies, but with the development of artificial intelligence, machines have begun to adapt to human habits and meet the needs of human beings. In the new insurtech insurance system, insurance companies can use technology to achieve a more humanized interaction with customers and move from an “after compensation” model to a “prevention and participation” one. To this end, insurers should aim to offer humanized products that enable them to work together with clients to reduce losses.
Insurtech will help make insurance accessible to all, improve efficiency and reduce costs. In the future, these technologies will make it possible to offer diversified, high-frequency insurance products and services at lower prices. Ultimately, insurtech will make financial services more inclusive, according to Walkman Lee, Head of Insurance, KPMG China.All rights reserved