Insurance companies seize the fast train of digital transformation

Recently, the State Administration of Financial Regulation announced the main regulatory indicators for the banking and insurance industries in the first quarter of 2023. As of the end of the first quarter, the total assets of insurance companies reached 28

Recently, the State Administration of Financial Regulation announced the main regulatory indicators for the banking and insurance industries in the first quarter of 2023. As of the end of the first quarter, the total assets of insurance companies reached 28.4 trillion yuan, an increase of 1.22 trillion yuan or 4.5% compared to the beginning of the year. In recent years, the insurance industry has been operating steadily, actively participating in the construction of multi-level social security systems such as healthcare and elderly care. Financial technology empowerment has been continuously strengthened, and the quality and efficiency of serving the real economy have been further improved.

Insurance technology is changing rapidly

In recent years, more and more insurance companies have started to increase investment in financial technology. On the one hand, new technologies such as Big data and artificial intelligence have gradually penetrated into all links of the insurance business chain, helping insurance companies reduce costs, increase efficiency and achieve sustainable growth. On the other hand, technology enables the insurance industry to better meet new risk needs in new scenarios, innovate product development cycles and categories, and further improve risk protection for a wider range of people.

In 2017, the International Association of Insurance Supervisors (IAIS) defined insurance technology as a branch of financial technology in the insurance field, which combines various emerging technologies and innovative business models with the potential to change the insurance business.

According to the annual report of Ping An Insurance, Ping An has continued to build leading scientific and technological capabilities through R&D investment, widely used in the main financial industry, and accelerated the construction of the ecosystem. As of the end of 2022, Ping An has a first-class technology talent team of nearly 30000 technology developers and nearly 3900 scientists; The cumulative number of technology patent applications has reached 46077. In 2022, the sales scale of Ping An AI seat driven products increased by 25% year-on-year to approximately 344.4 billion yuan; The AI agent service volume accounts for 82% of the total customer service volume.

In May, the Digital Intelligence Research Institute under China Taibao officially released the "Tai Shu Tong" digital intelligence integrated empowerment platform. According to the relevant person in charge of China Taibao, the "Taishutong" platform can provide digital empowerment for scenarios such as underwriting and claims automation, intelligent risk control, personalized recommendation, intelligent consultation, and digital employees. Taking the rapid claims scenario as an example, "Taishutong" provides a full process optimization solution to make claims quick, accurate, and efficient. In the submission of claim materials, "Taidatacom" automatically classifies image materials, automatically corrects images, and intelligently detects forged materials; In the information input process, "Taishutong" automatically converts bills into structured data input systems through intelligent input technology; In the claim review process, "Taishutong" combines the claim model to achieve automatic review.

According to statistics from research institutions, the total financing amount of global insurance technology from 2012 to 2022 reached 49.648 billion US dollars. 2021 is the peak of insurance technology investment transactions, with a total cumulative investment of 15.8 billion US dollars. Wang Yuxiang, vice president of China Insurance Association, believes that digital reform will become the New normal of the development of the insurance industry. The insurance industry should take advantage of the opportunities brought by the rapid development of information technology to improve the commercial sustainability of insurance services by improving the availability of services, providing innovative and low-cost insurance products and services, and enriching the system diversity of insurance ecology.

It is worth mentioning that the deep application of insurance technology has greatly reduced the threshold for users to accept insurance services. In the field of property insurance, from telephone car insurance to internet car insurance, insurance company salespeople and car owners can complete the entire process of insurance without having to face each other. In the field of personal insurance, inclusive insurance such as "Beneficial Insurance", "Flexible Employment Insurance", and "Exclusive Commercial Pension Insurance" have flourished, playing an important role in serving specific groups such as new residents and further supplementing the social security system. Jiang Xing, CEO of ZhongAn, said, "No matter how technology develops, the most important thing will remain unchanged. New technology is used to help us do difficult and correct things, better stick to our original intention, and do a good job in financial inclusion".

Internet insurance is thriving

According to data from the China Insurance Industry Association, from 2013 to 2022, the premium scale of internet insurance has increased from 29 billion yuan to 478.25 billion yuan, with an annual compound growth rate of 32.3%. Wang Yuxiang believes that from a technological perspective, internet insurance utilizes information technology to effectively optimize business processes, improve operational efficiency, reduce operational costs, enhance customers' online full process service experience, and enhance traceable management of internet insurance sales behavior, thereby effectively promoting the development of traditional insurance technology in the field of insurance.

As the first internet insurance company in China, Zhongan Insurance has chosen the "digital" route since its establishment, connecting the application of technology in various stages of insurance front, middle, and back office. By the end of 2022, ZhongAn had issued more than 50 billion policies, with premium income of 23.65 billion yuan, ranking among the top ten property insurance companies in China. In 2022, Zhongan's R&D investment reached 1.345 billion yuan, a year-on-year increase of 19.4%. The cumulative number of technology patent applications reached 599, including 174 overseas patent applications, and 196 authorized patents were obtained, with a year-on-year increase of 69%.

Xu Xian, Director of the Risk Management and Insurance Department at Fudan University, believes that internet insurance plays a very important role in the digital and technological application of the current insurance industry. In recent years, internet insurance companies have trained many talents for the insurance industry, especially for technology companies and startups, many of whom have experience working in internet insurance companies. This is the important value that internet insurance provides to the Chinese insurance industry. Industry insiders have stated that after more than 10 years of development in internet insurance and insurance technology, the industry may no longer narrowly discuss internet insurance in the future, but rather the entire insurance industry will need the internet even more.

Several industry insiders stated in an interview with Economic Daily that internet insurance has broken the geographical restrictions of traditional insurance companies and provided online channels and digital services. In the future, with the continuous awakening of public awareness of security and the deepening of technological empowerment, internet insurance can lay out a wider product line, further increase penetration rate, and expand market share.

Last year, the former China Banking and Insurance Regulatory Commission issued the Guiding Opinions on Digital transformation of the Banking and Insurance Industry, which proposed to build an operation management system for Internet customers, strengthen customer experience management, enhance online customer demand insight, and promote online intelligence in marketing, trading, service, and risk control.

At the beginning of June, in order to promote the expansion of the third pillar of commercial pension supply, China Life Pension Insurance Company's commercial pension business was launched on the Alipay platform. Policyholders can experience one-stop services such as commercial pension account opening, purchasing, and rights inquiry through the "China Life Pension Insurance" direct sales mini program, and obtain professional pension finance knowledge. The 24-hour online customer service of the direct sales mini program and the China Life Insurance customer service hotline collaborate to provide more efficient and convenient consulting services. The relevant person in charge of China Life Pension Insurance Company stated that the company fully utilizes the advantages of wide coverage and high reach rate of internet platforms to provide customers with more convenient, fast, and safe pension financial products and services, aiming to further enhance people's awareness of pension planning and pension reserves, and improve the availability and convenience of pension financial products and services.

Industry transformation and acceleration

With the development of mobile internet, insurance companies have relied on technological strength to develop more new insurance products that combine with digital life scenarios, meeting users' new risk protection needs. Among them, there are both property insurance industry and personal insurance products. At the same time, small and medium-sized insurance companies expand their business through online channels, and more and more Insurance broker companies and insurance brokerage companies start their business through the Internet.

During the interview, the reporter learned that on the one hand, the development of the Internet has given rise to various new insurance application scenarios, including e-commerce shopping, airline and hotel reservations, online diagnosis and treatment, etc. On the other hand, the "post-90s" and "post-95s" have gradually become the main consumer groups of insurance products. These "Internet Indigenous Peoples" have a stronger sense of protection, but their values and consumption views differ greatly from the previous generation, and there are many new risk protection needs.

The internet insurance brokerage platform Yuanbao Group has launched "Digital Intelligence Employees" to meet customer needs. According to Fang Rui, CEO of Yuanbao Group, "Digital Intelligence employees" integrate Robotic process automation with AI capabilities such as voice interaction, Natural-language understanding and image recognition, covering more than 80% of business scenarios, and are widely used in product innovation, precision marketing, user refined operation, intelligent customer service, intelligent claims settlement and other links. Unlike static "digital people," Yuanbao's "digital intelligence employees" no longer complete simple and rigid conversations based on set keywords or established procedures, but possess stronger expressive, recognition, and perceptual comprehension abilities through automatic deep learning. Regardless of whether the user is speaking in voice or text format, whether the question is standard or not, and even if the user has a strong local accent, "Digital Intelligence Employees" can provide intelligent interactive services that are "understandable, quick to respond, and accurate to answer". At the same time, Yuanbao also launched an "intelligent marketing system" that can accurately recommend suitable insurance products for users, effectively solving the industry pain points of traditional insurance homogeneous sales and supply and demand mismatch, greatly improving marketing efficiency.

Huixuan Insurance Brokerage Co., Ltd. has pioneered a model of customizing products from domestic third-party platforms to insurance companies. At present, Huize has maintained cooperative relationships with over 100 insurance companies and collaborated to create popular products such as the "Darwin series", "Huixinan", and "Guardian". Customized products have also become an important support for Huize's business growth. In the first quarter of 2023, Huixuan's customized product premiums accounted for over 60%. Taking the company's first customized product "Darwin series" serious illness insurance as an example, it has served over 300000 customers and paid nearly 450 million yuan in compensation since its launch 5 years ago.

It is worth mentioning that with the improvement of technological level and the application of technological achievements, some new insurance products have also emerged, among which the most representative is network security insurance. Network security insurance is an insurance product where the policyholder causes economic losses due to attacks on the insured computer or network equipment, and the insurance company compensates for the corresponding losses according to the contract agreement. The "Research Report on Cybersecurity Insurance" released by the National Industrial Information Security Development Research Center shows that the scale of China's cybersecurity insurance premiums in 2022 was about 140 million yuan, double the 70.8 million yuan in 2021. At present, more than 30 insurance companies have filed 78 network security insurance products.

From the perspective of industry development, the coverage of existing network security insurance products is still limited, with severe homogenization. However, there are significant differences in network risks faced by different industries and enterprises, and there is still a mismatch between insurance products and actual demand. At the same time, many enterprises have a weak understanding of network security risks, and have a vague understanding of the required protection content and amount. The need for risk protection still needs to be cultivated.

The former head of relevant departments of the China Banking and Insurance Regulatory Commission has stated that it is necessary to accelerate the construction of industry infrastructure services. It is necessary to strengthen the strength of the whole industry, accelerate the construction of unified infrastructure services in the industry, widely used in product design, process management, precision sales and other aspects, and comprehensively improve the service level, supported by new technologies such as Big data and artificial intelligence.

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