ZhongAn, China’s largest online insurer, sees Ping An as an insurtech rival it can learn from
China’s insurtech market is set to hit US$211b by 2021, with 5 key technologies to reshape the industry – blockchain, AI, internet of things, big data and cloud computing
ZhongAn Online P&C Insurance, China’s first and largest online-only issuer, said it wanted to learn from its rival and early investor, Ping An Insurance Group, which has taken the lead in research and development in insurance technology.
With its scale and rapid pace of expansion, China’s insurtech market would have room for everyone, said Chen Wei, chief executive of ZhongAn Technology, the online insurer’s technology incubator.
“China’s insurtech market is so huge that no single company can gain a dominating share, ” he said in Hong Kong on Wednesday. “The Chinese market is big enough to contain both ZhongAn and Ping An.”
ZhongAn Technology was set up in November 2016 to focus on research and development (R&D) of fintech, with the aim of exporting these capabilities to the insurance industry that is being disrupted by technology.
“Financial technologies are transforming and upgrading the traditional insurance industry,” said Chen. “Ping An Insurance is a competitor that we can learn from.”
Ping An, China’ second-largest insurer that holds 10.2 per cent of ZhongAn Online, has also been aggressively expanding into the booming insurtech market. It has not only led R&D in artificial intelligence (AI), blockchain and big data through its fintech subsidiary, Ping An OneConnect, but also exported the technologies to other insurers.
China’s insurtech market is expected to hit 1.4 trillion yuan (US$211.66 billion) in value by 2021, with five key technologies to reshape the industry – blockchain, AI, internet of things, big data and cloud computing, according to a report jointly released by ZhongAn Technology and Oliver Wyman on Wednesday.
Cliff Sheng, partner for Oliver Wyman, said China’s insurtech market could be divided into three segments – selling traditional products on the internet, upgrading existing products via new technologies, and creating innovative products from big data analytics to tap unmet needs, such as products for good returns on e-commerce sites or “traffic congestion” scenarios.
Sheng said ZhongAn Online mainly targeted the third segment, and Ping An’s insurtech business centred around the first and second.
Although Chen said ZhongAn had not encountered a similar player in the past few years, the company welcomes competition in the insurtech market, which allows players to learn from one another and facilitate progress. He added that ZhongAn had worked with Ping An on online car insurance products.
“We have used technologies to improve and innovate insurance products, activating market needs that traditional insurance players have not tapped on,” Chen said. “This is our strength.”
To illustrate, he said claims settlement for some of the ZhongAn’s products had been automated, where big data analyses client behaviour and “quantifies” the risks.
“By using the data from the internet, we can have a better profile of our clients and manage risks more efficiently.”
ZhongAn Tech is currently applying for 15 patents in insurtech, Chen added.