Technological advances have the potential to radically change the way life insurers interact with consumers and also help them better assess and price risks. The rapid spread of internet-enabled wearable devices and ubiquitous connectivity are enabling new ways of communication and information sharing. The amount of digital data generated automatically, inexpensively and non-intrusively is growing exponentially. So too are new tools to analyse the data and extract useful insights on consumers. Developments in artificial intelligence and cognitive systems also create opportunities for innovation. And advances in medical technology have the potential to improve health outcomes and extend lives, thus changing risk pools.
Insurers in China can use this technology to offer services outside the bounds of traditional insurance. Some life insurers already offer health screenings, preventative consultations, discount cards to pharmacies and other types of assistance, positioning themselves to provide family, health and wealth services to consumers. The Figure below depicts a range of a brave new world of services that sophisticated technology platforms could open up to insurers.
Possible tech-enabled product and service offerings open to insurers
In China, insurers are active participants in the fast-growing life and health ecosystems. For example, Ping An has integrated a range of participants (hospitals, third-party intermediaries, primary care clinics, insurers, and advertisers) into its ecosystem. At the end of the user experience, consumers can provide feedback on quality through a user-review system, which in turn can incentivise medical teams to improve the quality of care.
Insurers can benefit from customer loyalty to such ecosystems. For example, Aviva recently partnered with Tencent, to test the online distribution of critical illness policies. Aviva brings underwriting expertise that lies outside Tencent’s core competency, but Tencent offers Aviva increased reach through its ability to target specific segments and mine WeChat user behaviour.
Utilised more fully and intelligently, digital ecosystems present an opportunity for the insurance industry to reinforce its relevance to its clients whose tastes and protection needs are changing. However, insurers will have to redefine the role they can play in these structures that comprise a heterogeneous assortment of businesses from different sectors. This environment requires distinctive capabilities and relies heavily on access to data and the capability to model risks. True leverage will only be created in combination with other assets, such as key partnerships with suppliers and other firms that allow insurers access to ecosystems.
Contact us to know how Swiss Re is supporting Chinese insurers and their digital partners to extract value from their digital ecosystem with solutions targeting the existing China life and health protection gap.
For more details, read the Swiss Re Institute publication titled “Digital ecosystems: extending the boundaries of value creation in insurance”:
 “Hong Kong’s first pure digital insurance venture, Tencent-backed Blue, to start selling policies”, South China Morning Post, 12 September 2018, https://www.scmp.com/business/banking-finance/article/2163792/hong-kongs-first-pure-digital-insurance-venture-tencent