AI News, Chinese Giant Ping An Looks Beyond Insurance To A Fintech Future artificial intelligence

Insurance beyond digital: The rise of ecosystems and platforms

Insurance companies have the opportunity to create new sources of revenue by rethinking their traditional roles and adopting an ecosystem mind-set.

The pace of change has accelerated thanks to tremendous increases in the volume of electronic data, the ubiquity of mobile interfaces, and the growing power of artificial intelligence.

Airbnb amassed an inventory of one million rooms a staggering 50 years faster than Marriott did, and WeWork has sublet ten million square feet of office space globally since its inception in 2010.

McKinsey research shows that while digital technology propels some companies to become clear market winners, it depletes corporate earnings and overall value for many others.

In this new world, while insurance could be featured as the risk-mitigation service for each of these 12 ecosystems, there’s no reason why insurance companies could not constitute their own subecosystems that cater to individuals and institutions (see sidebar “How ecosystems could help cyberinsurance prosper”).

Ecosystems typically provide three types of value: For insurers, shifting from an industry to an ecosystem perspective requires a significant change in how they define their role in the economy.

For example, the personal-mobility ecosystem offers a range of opportunities to expand into areas such as vehicle purchase and maintenance management, ride-sharing, carpooling, traffic management, vehicle connectivity, and parking.

The institute articulates its mission as follows: “We are dedicated to making automobiles safer, more affordable, and more accessible to everyone, regardless of age or ability, and to expanding the benefit of mobility technology beyond automobiles, for example to in-home support of older persons and those with special needs.”

Innovation has caused significant disruption, resulting in the emergence of four natural stakeholders in the ecosystem: original equipment manufacturers (OEMs), high-tech players, insurers, and telecom providers.

As mobility evolves, first movers will have the opportunity to transition from stakeholders to orchestrators in three key areas: customer relationships, network and service management, and analytics.

(For an example from the agriculture industry, see sidebar “John Deere: A pioneer in agriculture ecosystems.”) Insurers already have a strong foundation in mobility thanks to their current customer base, distribution power, and stock of personal data from auto insurance policies.5 5.Markus Löffler, Christopher Mokwa, Björn Münstermann, and Johannes Wojciak, “Shifting gears: Insurers adjust for connected-car ecosystems,”

To position themselves as true ecosystem players and to fend off moves by other stakeholders, insurers need to build capabilities in a number of areas, including mobile sensors, analytical tools, and customer interfaces.

As more OEMs conceptualize line-fitted telematics devices and ride-sharing providers such as Uber grow ever stronger in network management, it is incumbent on insurers to move from risk aggregation to risk prevention.

At the same time, executives must understand that while insurance products and related security services will always be at the core of the insurance business, services such as telematics are a way of developing meaningful customer relationships.

A stronger relationship with OEMs and high-tech players could allow insurers to assimilate risk into existing offerings: pay-how-you-drive and pay-as-you-drive modeling, loyalty and gamification, emergency and breakdown services, crash assistance, and theft reporting.

For reference, executives need look no further than their recent efforts to partner with Internet of Things (IoT) providers, which they pursued in an effort to offset their disadvantage from a lack of customer touchpoints and engagement.

Digital Partners (DP), a global venture established by Munich Re to win the confidence of and subsequently partner with insurance disruptors, is nurturing an ecosystem that supports the development of start-ups, including Trov, an on-demand insurance provider, and Wrisk, an insurtech venture that delivers motor, travel, and home insurance directly through smartphones.

Although these newcomers are populating every part of the value chain (Exhibit 2), their focus to date has been on the more easily accessible slivers of the industry—mainly distribution, particularly in property and casualty insurance.6 6.Tanguy Catlin, Johannes-Tobias Lorenz, Christopher Morrison, and Holger Wilms, “Facing digital reality,”

Since innovation from insurtechs actually aims to contribute to the insurance value chain (except distribution for large players), insurance executives should view potential partnerships with insurtechs as positive.

For example, in its bid to participate in the health ecosystem, Apple launched the Healthkit open platform, which offers Apple device users the option to share their health and activity data across affiliated applications on their smartphones.

This integration allows users as well as participants from the world of medicine—including physicians, researchers, hospitals, and developers of healthcare and fitness apps—to access valuable data to inform patient care, research studies, marketing, product development, and so forth.

A future as a sort of financial utility—ubiquitous but heavily regulated, unglamorous and marginally profitable—is hardly a gratifying outcome for banks.”7 7.S.P., “Why fintech won’t kill banks,”

A leading analyst firm anticipates that Google will remain active in the insurance industry, complementing its foundational, ad-based service with a new offering that leverages more of its core skills.8 8.Kimberly Harris-Ferrante, “Google to end Google Compare but not its focus on insurance,”

Insurers can harness consumer adoption of IoT to create opportunities for better and more frequent customer interactions (for example, through wearables) and improve efficiency through sensor-based automation (such as trigger-based claims payments and apps).

This offering could include predictive-modeling and optimization services that enable faster and smarter business decisions across all industries within the entire analytics value chain.

The insurer was able to penetrate international markets through the platform by partnering with AIA across all of Asia, Generali across continental Europe, and in several local markets such as withManulife in Canada, Ping An in China, and Sumitomo in Japan, resulting in 31 percent annual growth in international markets.

One of the primary reasons Yu’eBao was able to become the world’s largest fund, surpassing JPMorgan’s US government money-market fund ($150 billion), was that Alibaba’s millions of users viewed Yu’eBao as a complementary service of a trusted brand.

Options include offering innovative hybrid solutions in insurance and services offerings with partners from other industries (for example, predictive maintenance, smart parking, and preventive care).

Ping An Insurance sees fintech and other technologies as key business development area

Ping An Insurance (Group), China’s second-largest insurer in terms of premiums, plans to make its technology business a key development area, building on a surge in profit from the division in the first half of the year.

The company has been steadily expanding its presence in fintech and other technology areas in recent years, and profit from the business rose ninefold to 4.2 billion yuan in the first half, representing 7 per cent of overall operating profit, compared with less than 1 per cent last year.

Ping An Insurance profit beats expectations as new sales and technology development drive growth The interim dividend payment also increased 24 per cent to 0.62 yuan per share, and the company plans to maintain high levels of dividend payouts.

Data tracking about to change the way insurance companies do business, says Ping An tech fund Jessica Tan, deputy chief executive of Ping An, said the company would continue to promote its so-called smart city projects in China, looking to expand beyond the current 200 locations.

With $1b war chest, Ping An set to become AI innovation giant

Chinese financial giant Ping An Insurance (Group) Co will spend more than 7.77 billion yuan ($1.16 billion) on technology research and development this year, ...

Live from Disrupt Berlin 2018 Day 1

TechCrunch Disrupt Berlin 2018 - Day 1.

FinTech Faceoff: A Transatlantic Debate on the Future of Finance.

Capgemini and LinkedIn in collaboration with 11:FS are thrilled to announce our inaugural debate featuring FinTech and Incumbent industry leaders and key ...

FinTech Faceoff: A Transatlantic Debate on the Future of Finance

Capgemini and LinkedIn in collaboration with 11:FS are thrilled to announce our inaugural debate featuring FinTech and Incumbent industry leaders and key ...