China Life Insurance and Ping An Insurance, the two largest players in the Chinese insurance market, have announced long-term investment plans into “insurtech,” the streamlining of their insurance sales and distribution practices with the use of the innovative technology.
In late August, China Life Insurance and Baidu, China’s most widely-used web services company, revealed that they would be working together to form a 7 billion yuan (about US$1 billion) private equity fund under the title of the “Baidu Fund Partnership.” The Fund, composed of 1.4 billion yuan in contributions from Baidu, will be devoted to investments in internet and other technologies, including artificial intelligence.
China Life Insurance’s profile jumped 17.8 percent to 12.242 billion yuan (US$1.84 billion) between January and June, an increase that many are contributing to its newfound partnership with Baidu.
Meanwhile, Ping An Insurance, China’s second largest insurer, confirmed that it would continue to invest US$1 billion into internet development annually.
The company has reportedly already seen an increase in overall coverage due to such investments, as Jessica Tan confirmed in an April interview with South China Morning Post, as 22% of its new costumers “came from the internet.” Ping An currently boasts 346 million online users, who use the company’s electronic platforms to manage their finance, insurance, and health care policies.
Tan elaborated that Ping An’s loan book includes a total of 1.5 trillion yuan (US$220 billion), and that, if the company is successful in helping banks launch platforms to serve even 10 percent of their customers, the business would be three times bigger than Ping An’s Bank.
This recent interest in insurtech, especially on the part of China’s largest insurers marks a departure from their former, more traditional emphasis on staffing a large team of agents: in the past China Life has made much of the fact that their team includes as much as 1.58 million agents, as compared to Ping An’s 1.1 million.
In the wake of these recent announcements, both companies appear to have shifted away from stressing their intentions on hiring even more agents, and towards emphasizing their commitment to enhancing their technological capabilities and diversifying their businesses.
The successful implementation of China Life and Ping Ans’ technology-focused business strategies has the potential to transform the relationships between Chinese citizens and their insurance providers: from relationship between customer and agent, to relationship between customer and algorithm.2 - Readers Like This Post