This insurtech start-up wants to compete with ZhongAn, Ping An by targeting China’s wealthy
CareVoice, China’s first review-based social platform for health care, hopes to compete with bigger rivals by targeting a younger generation of affluent, tech-savvy consumers
Competition in China’s emerging insurance technology scene is getting fierce, drawing several new players who want to tap the world’s third largest insurance market with its large mobile and digitally savvy consumer base.
CareVoice, China’s first review-based social platform that helps people make better health related decisions, is the latest insurtech start-up to attract investors, as it hopes to compete in the market by targeting a younger generation of affluent, tech-savvy consumers.
The Shanghai-based start-up recently completed its first major round of funding from China-based Haitao Capital and US-based SOSV, one of the world’s largest seed investors. It has so far raised a combined US$3.2 million from an earlier angel round and the current venture capital-backed round and hopes to reach US$100 million in sales within the next five years amid booming demand for private health care and the rapid growth of online insurance.
“The macros in China are very favourable,” said Sebastien Gaudin, chief executive officer and co-founder of CareVoice, in an interview with South China Morning Post. “There are around 150 million affluent consumers who are perfect clients for getting private medical insurance directly or through their employers. [As such] the mid to high end medical insurance market should reach US$4 billion in premiums by 2020 and continue to grow.”
China’s insurtech industry is reaping the rewards of the rapidly growing insurance sector.
ZhongAn Online P&C Insurance, the country’s first internet-only insurer, went public recently and has become a heavyweight with a HK$105 billion market cap, just four years after its birth.
Ping An Insurance, the country’s second largest insurer, has also been aggressively expanding into the insurtech sector by leading R&D in AI, blockchain, and big data and exporting the technologies to other insurers.
“ZhongAn and Ping An are mostly addressing needs of the mass market across insurance lines,” Gaudin said. “But we are [eyeing] the mid to high private insurance market, which is still a niche and represents a great business opportunity for a start-up like ours.”
What makes CareVoice competitive is that it offers more customer-facing, digital solutions for insurers who want these solutions to help them improve clients’ health care experiences.
“They [ZhongAn and Ping An] remain insurer players. So even though they are aiming to bring tech based services to other insurers, it may be more tricky for them to get deals and bring onboard clients for digital services.”
Gaudin said that because the Chinese are wary of their national health care system and often do not fully trust their medical professionals, only the most reputable public hospitals are in demand, while lesser known public hospitals and private clinics remain underused.
In particular, the demand is big among a growing middle class who are keen to find trustworthy information and better level of care.
“That’s how I came with the idea for CareVoice, to build a trusted review and rating platform. Chinese consumers are particularly adept at social networking and are known to share and comment on their personal experiences, so I thought why not put the two together.”
CareVoice blends multiple data sources into a search algorithm designed to match specific care needs with specific care environments. Members can rate services of hospitals and clinics, post reviews, interact and refer to each others’ experiences. They can also access other information about services, such as costs, depending on the type of insurance.
CareVoice mainly derives revenues from insurance providers and corporate employers, who pay for annual subscriptions. It also works with health care professionals offering services for gaining patients’ trust, improving their services, and managing their reputation.
The platform currently has 350,000 users and expects to have at least 165,000 VIP insurance members on board in 2018.
So far CareVoice has signed five insurance companies as clients, including AXA, Ping An Insurance, and Chubb, and has partnered with over 100 health care providers and companies in China.
The short-term goal is to provide half a million individual policyholders and 200 corporate accounts across over 10 insurance companies within the next 12 months, Gaudin said.
The company also plans to use the newly raised money to expand in overseas market, as it’s in talks with insurers and investors in Hong Kong, Thailand, Singapore and Vietnam.
Geoffrey Handley, general partner for Haitao Capital, who has been involved with CareVoice for the past two years, said the start-up has adopted best international standards from more mature Western insurance markets to China.
“Meanwhile, it’s also benefiting from China’s advances in mobile technology and digital innovation solutions in the insurance industry.”