ZhongAn will blaze a trail that will transform the market
ZhongAn Online Property & Casualty Insurance has already generated waves in the insurance market in China and further afield but what we have seen so far is really only the start.
Backed by Alibaba-affiliated Ant Financial, internet and social media group Tencent Holdings and Ping An, one of China’s largest insurance groups, the group raised USD1.5bn on the Hong Kong Stock Exchange in September, in the world’s first insurtech IPO.
ZhongAn’s growth story has been spectacular. It has taken an almost brand-new product – e-commerce return courier fee insurance – with tiny premiums (think five to ten cents) but massive volume (think 10 million policies per day), and catapulted itself into the general insurers in China within just two years of launch.
We expect premiums to continue to sky-rocket in 2018, causing interest and investment in insurtech to ramp up across the market.
The key to ZhongAn’s success is its proprietary systems and three distinct areas of technology.
First, the core capabilities required by any online insurance players such as enabling mobile payment transactions, policy distribution and claims handling.
Second, blockchain infrastructure meant to facilitate digital assets circulation, transaction clearing, data storage, identity verification and anti-money laundering.
And third, artificial intelligence-related applications such as image recognition that help speed up authentication processes, machine learning for better understanding of user behavior, and automated chatbots to streamline traditional customer services.
Now these technologies have been established they can be deployed into other areas of the market, further disrupting the insurance industry. Established insurers and technology start-ups alike will be watching these developments with interest, and scrambling to catch up.
2018 will be the year insurtech takes off.