Zhong An – China’s First Online Insurance Company

ZhongAn is successfully leveraging emerging technologies like cloud and big data analytics along with the huge user base of its founding partners

Digital distribution, underwriting, processing and claims is the holy grail that has eluded many insurers who are still tied to legacy IT infrastructures and most importantly, culture. However a Chinese joint venture between established internet giants Tencent, Alibaba and Ping An has given rise to the first truly digital insurer to achieve scale. Zhong An, is based on the premise that the entire insurance value chain and user experience can be digitised. Barely three years old, Zhong An offers a comprehensive range of products including commercial property, cargo and liability insurance along with addressing a series of risks concerning e-commerce, mobile payments and internet finance.

Zhong An Online initially positioned itself as a service site providing cover for various risks relating to the internet economy. Its target customers include both corporate and individual clients, such as companies providing the e-commerce platform, internet service, online shopping consumers, and social network participants. Sales and claims handling are entirely online and the traditional distribution channels of insurance agents are shunned. Thus far, Zhong An has underwritten more than 1.6 billion insurance policies and paid out 369 million in claims. Zhong An is also successfully leveraging emerging technologies like cloud and big data analytics along with the huge user base of its founding partners, Alibaba, Tencent, Ctrip, Zhaopin and Ping An.

Benefit to Customers

• Access to simple, affordable and relevant product and services
• Coverage for risks related to internet economy
• Better claims experience
• Anytime anywhere access

Benefit to the Insurer

• Unparalleled distribution capability
• Low fixed costs and highly scalable business model
• Keep ownership of customer to gain greater share of customer lifetime value
• Faster claims servicing time
• Cross industry collaboration that benefits from the competitive position of participant companies
• Insight driven customer segmentation for acquisition, cross-selling and retention

Ultimately, Zhong An is a great example of the synergies that can be achieved by combining internet platforms that have already achieved scale and legacy insurers that have the infrastructure to facilitate a completely digital user journey. In order to avoid competition from unrelated, but agile and flexible new players like Alibaba, Tencent, Google and Facebook, traditional insurers will increasingly enter into collaborative partnerships with them. However, as the allure of digital distribution is its direct to consumer nature, insurers will need to tread carefully so as not to forge an unbalanced relationship with online distribution players who can potentially regulate insurers to mere capital providers and therefore dictate the terms of such distribution partnerships.

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