Insurtech is hitting critical mass
28 Nov 2017
The wisest insurance incumbents will seize the collaborative opportunities springing from this new environment.
Launched in 2013, Chinese non-life insurer ZhongAn has already reached a market cap of US$13.6 billion on the Hong Kong Stock Exchange, where it started trading in late September this year. ZhongAn uses artificial intelligence and big data to generate mass market sales over the internet. Its flagship product is a policy that covers the cost of returning products bought on shopping platform Taobao.
ZhongAn has sold over 7 billion policies to 490 million customers so far. While it has yet to turn a profit, its runaway revenue growth is a sign of things to come in the insurance industry: , but a major activity supported by millions of customers.
Read the full article by INSEAD Knowledge.
About the authors
Christophe Angoulvant is Senior Partner and Global Head of Insurance at Roland Berger.
Karel Cool is the BP Chaired Professor of European Competitiveness at INSEAD.
Brian Rogers is Senior Business Development Manager at the Swiss Re Institute.
Blockchain technology has infinite possibilities. Since Satoshi Nakamoto published his white paper on bitcoin, a cryptocurrency housed on a decentralized database, the idea of blockchain technology has captured the minds and imagination of entrepreneurs and business leaders around the world.
The world is on the brink of an important socio-technical revolution involving freedom advocates, FinTech, as well as dark markets customers and drug dealers. The criminals, as well as the academics, are an important part of the revolution. Or more precisely, an evolution, as it may take a while for us to fully understand the implications of the technology's wide-ranging capabilities. The single keyword for this new evolution is the blockchain. From the technical standpoint, blockchain technology is relatively simple, although it required a number of breakthroughs in peer-to-peer technology, cryptography, as well as the existence of the Internet itself. We still have many technical issues to resolve. And in fact, it is the dark side that drives some of the innovations forward.
For much of the past year, Swiss Re has been working on proving if blockchain technology could be viable for the insurance industry. It has been a year full of belief, promises and hands-on experience, which has enhanced our perspective and enabled us to be ready at every stage of this evolving and promising technology. Needless to say, this would not have been possible without the dedication of many in the company and strong collaborations with leading thinkers outside the company. Leadership commitment has also been a key success factor.
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Just as the sharing economy is disrupting many traditional economic models and relationships, it is also creating misalignments between existing regulations and the harms they are meant to prevent.
The insurance industry has not seen much innovation over the last few decades. The few innovations on the market have not come from the big insurance companies, but from small Insurtechs (Insur for insurance and tech for technology) offering new approaches to industry problems.
Bought By Many is a free, members-only service based in the UK that helps people find insurance for the out of the ordinary. Its motto is “Insurance made social.” The company creates groups for people who need niche personal insurance - eg travel insurance for people with diabetes or pet insurance for owners of French bulldogs. It then uses social media and search engine optimisation to find people to join. The company negotiates with insurers on behalf of its more than 150000 members. The result can be coverage for people who previously could not get it or standard offerings at better prices.
The underlying assets of the booming sharing economy – cars, houses, people – will all still need insurance coverage. However, as consumption and employment habits change, so insurance requirements will change – and it is here that insurers are playing catch-up with their customers.