China InsurTech firm ZhongAn targets Japan

A Hong Kong-listed mainland China provider of online-delivered insurance products (InsurTech) that are underwritten from consumer data harvested via digital financial technology (FinTech), is targeting Japan as its first overseas market, said a senior executive at the Finovate Asia 2018 conference in Hong Kong.

Wayne Xu is chief operating officer of ZhongAn Online P&C Insurance Co Ltd. The group, better known simply as ZhongAn, was founded in 2013 and floated on the Hong Kong bourse in 2017. The firm specialises in non-life risk and insurance for Chinese consumers, and argues it has created a market in that jurisdiction – where none existed before – for affordable coverage of everyday niggles such as shipping return cost risk for buyers, health insurance, cover for motorists and travel cover.

The prospective foray into Japan involves offering to apply ZhongAn’s digital platform to that market, rather than trying to make existing insurance products designed for the China market work in Japan, said Mr Xu.

His comments came during a discussion panel called “Insurance Providers’ Debate: how new tech is disrupting the insurance value chain”, held during the Finovate Asia conference at the Hong Kong Convention and Exhibition Centre. It was part of Hong Kong FinTech Week 2018, presented by InvestHK, Hong Kong’s inward investment agency, and organised by Finovate.

“In this international market the only thing we wanted to focus on was ex-party technology. The regulations, market, etc are so different. But the importance of technology is consistent,” Mr Xu told delegates to the Finovate event.

He stated: “We try to [provide] ex-party our technology to other insurance companies and financial institutions to help them better embrace the digital world. So, starting from this year we are entering the international market. Right now, we are focused on Asia, and Japan is our very first [international] market to target.”

Mr Xu said ZhongAn had been using data analytics “not just for underwriting but also for targeted marketing and customer services”.

“Everything about the user: the policy, the browsing history, and also the information from our partners – is already correlated with this user ID, instead of correlated to the policy ID. That is the basis for our data analysis,” he noted. “Commonly… we strike a deal with a partner, and we have our program as an algorithm running within the ecosystem.”

Consumers’ interests, trust

The concept of collaboration – both between traditional providers of insurance and InsurTech businesses, and between InsurTech providers and existing digital platforms that already have access to large numbers of consumers – ran throughout the expert debate.

A representative from one of those insurance sector incumbents – Aegon Group, a multinational life insurance, pensions and asset management company that is based in The Hague, Netherlands – gave her perspective on such matters.

Samita Malik, vice president of business development for Aegon Asia BV based in Hong Kong, told the delegates: “If your strategy is to come up with an app to sell something, you are about 10 years too late. Trying to get on someone’s cell phone – that valuable space – with an app; you better spend US$100 million on marketing or forget about it.”

Referring to the possibility of insurers teaming up with existing social media, she stated: “Increasingly around the globe, a few platforms are starting to dominate people’s time and people’s lives. If you can figure out how to partner in the right way, and are present there, I think a lot of the [consumer] adoption challenges can be better dealt with.”

Frank Desvignes, a former digital entrepreneur, has been given responsibility for helping to lead change at another traditional insurer, France’s AXA Group.

As chief executive and founder of AXA Lab Asia, one of his areas of concern is maintaining and building consumer trust regarding issues such as use of their data and confidentiality.

Referring to browser cookies – small pieces of data sent from a website and stored on the user’s computer by the web browser in order to identify preferences and behaviour of that consumer – Mr Desvignes said: “We should not introduce some cookies if we do not need [the data collected by] them. And that is exactly the same for gathering and analysing the data of all our customers. We should really try to find a way to find the right granulation of data we need.”