Interview: Gavin Li
This month we speak to Gavin Li of Bihu Technologies, a Beijing based InsurTech.
Q.1 In the face of increasing competition in the Chinese insurance industry, how can western insurers compete with Baidu, Alibaba, and Tencent (BAT)?
First, western insurers can collaborate with BAT by taking advantage of BAT’s mature technology and online platforms while utilising the global resources of western insurers to provide more attractive and special services for Chinese consumer groups with BAT, but not compete with them, through combining global resources, mature technology, and advanced insurance.
Q.2 Which will have a bigger impact on the insurance industry, blockchain or AI?
I see clearer use cases for AI, especially as it relates to customer service and claims management for simple products such as auto and travel insurance. Customer service and claims are a significant burden for insurers and the addition of AI enabled chatbots and claims processing will impact retention rates and profitability directly. For blockchain, there are still questions around security and the exact use cases for insurers. There are a lot of ideas, but we need some more time to identify the potential of blockchain.
Q.3 The notion of an ecosystem seems especially relevant in China (Ping An Good Doctor or China Life retirement homes). Why do you think we don’t see the ‘ecosystem’ phenomenon in the west?
I think we see clearer cases of ecosystems in China because China has developed so fast in the past 30 years that companies could quickly jump into adjacent industries that were at an early stage of development and so competition had not been entrenched. For example, credit cards in China were bypassed in preference for mobile payments and then using transaction data to cross-sell insurance and other financial services. In the west, it took longer for these industries to develop and so competitors became more entrenched and it was, therefore, more difficult for companies to move into adjacent industries.
Q.4 The China Banking Insurance Regulatory Commission (CIRC) is imposing strict regulations on the development of digital insurance in China. Do you think there is a risk that CIRC could stifle innovation through too many rules and restrictions?
It’s important to remember that the regulator is trying to manage a lot of development currently so there may be instances where CIRC over regulates an emerging trend in order to protect consumers. One example of this is the current proliferation of ORC (Online Reciprocal Communities), startups selling low price low limit critical illness reimbursement through WeChat groups. In this instance, CRIC has made sure that these startups do not market themselves as offering insurance, but instead must communicate that this form of insurance is not provided by an actual insurance company and therefore not guaranteed protection.