Interview: Lex Tan – CEO of MotionsCloud
Lex Tan is the CEO of MotionsCloud. MotionsCloud provides an intelligent claims solution for property and motor insurers to streamline and automate claims processes.
Q.1 The fact that car insurance premiums and UBI based pricing are still regulated in China has restrained the development of innovative car insurance products and services here. Many cite a fear of unprofitability as the reason for regulatory caution regarding the deregulation of pricing. What do you think can be done about this?
There are different kind of view we can discuss it. From regulatory committee point of view and mindset, I can understand where they are from. It is very new in the western countries especially the UBI, and the rollout of it usually started within regulatory sandbox. At the end, the regulatory committee would like to protect the interest of insurers as well as the insured, so caution about the deregulation of pricing would ensure the balance and sustainability of the insurers at least at this moment. On the other side, deregulation of the pricing would come in the future, so insurers would need to be prepared for it especially cutting internal cost as well as working toward automation of many repetitive processes from sales, underwriting, customer service and claims management. Soon I believe regulatory would introduce sandbox where innovative insurers or new insurtech company can sign up to test new innovative insurance product which would have a very competitive pricing, great services and customer centricity.
Q.2 Although auto insurance accounts for 70% of non-life insurance premium in China, this sizable market is counter-balanced by the high fraud rate experienced by state-owned property insurers. How can loss adjusting solutions such as MotionsCloud address this systemic problem?
Insurance fraud itself can be its own industry, is not just a huge problem to address, it also a very challenging problem to solve. Utilizing different kind of technologies such as mobile, live video as well as computer vision technologies to cross-check the possibility of the fraudulent claims. Collecting vast amount of data and records of data and timestamp of pictures, events, video, audio as well as sensors in cars, and phones would make the identification of effectively spotting out the fraudulent claims. Identification of fraudulent claim is one aspect, prevention of fraud would be another aspect. Claims processes can be design based on behavioural economic where would reduce the likelihood with bad intention, including charity and goodwill causes along with sales and claims management processes would be plus.
Q.3 In the face of increasing competition in the Chinese insurance industry, how can western insurers compete with Baidu, Alibaba, and Tencent (BAT)?
Chinese market it is a very special market with it pace and demand, which is slightly different from the west. I would predict some of them are exploring the possibility to work together with good terms instead of competing. In order to Western big company compete in the Chinese market, Western company would need a local chinese team that understand the dynamic, culture, relationship in the market, this would be a fundamental steps to be taken. Western business model and concept may not be applicable in Chinese market, western company would need to be flexible about it to meet the market demand.
Q.4 Which will have a bigger impact on the insurance industry, blockchain or AI?
In the term of impact, I would say both of them have to be combine to bring the greatest impact in the insurance market. AI would automated most of the repetitive processes and blockchain would secure each and every events and transaction without information leakage through different channel.
Q.5 The notion of an ecosystem seems especially relevant in China (Ping An HaoChe or Autohome). Why do you think we don’t see the ‘ecosystem’ phenomenon in the West?
In my point of view, we would see the ‘ecosystem’ phenomenon in the west as well, especially B3i consoutium for blockchain, many insurers, reinsurers are part of it with the effort to bring blockchain use cases into the reality. Comparing the west to China, western insurers are keeping up the pace.