Inside Asia - The Online Insurance Treasure Trove in China

Tuan Ming and Elayne Grace discuss the rapid growth of online insurance in Asia and the Chinese appetite for product innovation and business opportunities in this area.This is the second instalment in our ‘Inside Asia’ podcast series which aims to explore the experiences of actuaries working in Asia or moving between the Australian and Asian markets.On 27 August 2018, Elayne Grace, CEO of the Actuaries Institute, and Tuan Ming, Head of ASEAN, China, HK and India Regions at Gen Re (for Life & Health), met in Sydney to discuss what some of the innovative Chinese insurance market players are up to.The Chinese appetite for new forms of online insurance – both among internet giants like Alibaba, and traditional insurance players ­– is generating many examples of innovation in the insurance industry.China is the world’s second largest insurance market and growing fast. As someone who’s been working in Asia for over 20 years, Tuan has witnessed how the Chinese market has changed. “It is just unimaginable, from a small market, [it’s] grown to become the second largest market in the world. I feel that it is a privilege to be part of the industry [that] contributed to the growth. And we are seeing that the industry is delivering the real insurance and protection insurance to the Chinese consumers,” said Tuan.Alibaba earned 168 billion yuan (or US 25 billion) in 24 hours of the ‘Double 11 shopping Festival’ in 2017. On the same day, over 600 million policies of Shipping return insurance were sold. This is a world record for number of transactions of a single product line in a single day.The first online-only insurance company launched in China in 2013 - Zhong An. Several others have opened since. Tuan described how such companies are leading the way in terms of product innovation and creating new business opportunities.“They are property and casualty insurance companies and can only sell and distribute their products online. That gave them the extra motivation to do well. They sell a lot of shipping insurance policies for the Chinese consumers who buy their products online. Some of the other products that are becoming popular are, mobile phone screen insurance protection and flight delay insurance is becoming very popular,” said Tuan“This first retrocession for Life & Health industry appeared in 2016 when Zhong An had a successful medical insurance product which we co-develop with them.”Shipping return insurance has been a major premium generator for Zhong An. In 2014 it contributed 77% of total premium, but two years later that decreased to 35%, due to market competition and the development of other product lines.The online insurance market – with its lack of regulation and structure also poses threats to consumer needs and to insurers. Ping An Group – a traditional insurance and financial powerhouse in Asia - has invested billions in FinTech and HealthTech. Last year, it announced the launch of:Ping An Life - an AI Customer Service to solve the problems of slow identification and slow claim process; andPing An Health – an “AI Doctor” that accumulates millions of online diagnoses data for use in online medical pre-diagnosis, triage and consultation.Ping An’s transformation to a technology-driven enterprise reflects that the core of insurance is not just the products, but more about the services to people.“Ping On is increasing the interaction with its customer. For example, the customer can use the app to access some basic medical information or even be buying some basic medical equipment online. It has also developed to a stage where some of the basic medical advice can be provided online as well. By that, Ping On is trying to position itself not only as an insurance company, but also as a health management partner of their consumers.”“Ping An also triggered other...