Insurance brokers in China, which manage hordes of insurance agents on behalf of insurance companies, are building digital platforms to accommodate the shift in competition from traditional marketing to ‘Software as a Service’ business models.
In some cases, this is how companies struggling in the large but fiercely competitive domestic market think they can expand overseas.
“We have experience in marketing insurance products, and we hope to export our service with a SaaS model,” said Ouyang Kai, chief technology officer at Huize, a Shenzhen-based insurance broker with products from more than 80 insurers in their platform.
Right now the company offers comparisons on its site, but this year it will build a customer relationship-management (CRM) platform, where agents can manage their entire sales process, from pre-sale marketing to transactions and other post-sale services.
Similarly, Xiaoyusan, another insurance broker with a comparison tool, wants to offer risk management and claims management to insurers, charging a service fee as a complement to its current revenues. “We hope to use technology to remodel the industry,” said Xu Han, founder.
Insurance supermarket in China
China has many ‘insurance supermarkets’ that agents use to provide comparisons for customers. “But these websites are all about selling products,” said Pang Wenjun, CEO of Qibao Tech, a Shenzhen-based company that has already transformed into a SaaS business.
Comparison or supermarket sites have only limited utility, because customers must still go directly to the insurance companies if they want to settle claims. These insurers don’t know these customers, so they require people to go through another round of documentation to ascertain they own a given policy.
These businesses evolved this way before cloud computing became readily available, but now vendor databases can hold all party information, potentially eliminating these extra steps.
This is good news for insurance companies and for agents, both of which can simplify their processes and improve the customer experience. Insurers can also use these budding SaaS platforms to share data to improve risk management industry-wide.
We hope to use technology to remodel the industry
“A SaaS platform’s services let all parties communicate,” Pang told DigFin.
The platform requires data
It also heralds a shift among agents from selling products to selling a service, she says. But platforms only work if they have enough customer data, which can help insurers design better products and manage risk.
For example, if a customer is comparing flight-delay insurance on a broker’s comparison site, in China, this could serve as a red flag: normal behavior is to simply pick one and buy it, but multiple purchases could indicate a fraud, says Wei Dan, CEO of Baoxian.com, another Shenzhen-based insurance broker that is building a SaaS-type platform.
“If all insurers just stick to their own data, it would be difficult for them to properly measure the risks,” she said. “Some insurers are even buying customer data.”
As more brokers move to SaaS offerings, they hope to regain pricing power or be able to differentiate themselves, either by tweaking commissions or service fees, says Qibao’s Pang.
And just as Huize is looking to use the technology to break into markets beyond mainland China, Qibao is also looking at Hong Kong. Although Hong Kong has its own comparison providers, including those looking to expand into financial advice and execution, Pang says Chinese firms may have an advantage if they act now: “Mainland brokers develop fast, and the market here accepts fintech.”
Cigna reboots with WhatsApp/chatbot mashup
The U.S. firm is leveraging WhatsApp business API and A.I. to get a leg up in Hong Kong health insurance.
Cigna is the first insurer in Hong Kong to deploy
WhatsApp Business API allows an enterprise to manage one-to-one communication with customers using the messaging app. With over 1.5 billion monthly active users, WhatsApp is the largest messaging platform in the world. In markets such as Hong Kong, it is the dominant messenger (see chart*).
What’s the importance of APIs? Applied program interfaces connect two different networks. A Cigna customer would normally need to log into the company’s app or website to receive service. But Cigna has now linked its server to WhatsApp, the
WhatsApp built its Business API service for large businesses to easily handle big volumes of notifications. For example, Booking.com and Wish use WhatsApp API to send booking confirmations and shipping information to individuals.
Cigna took this a step forward. It has hired Hong Kong
Its first use case is to help customers find a doctor.
Yuman Chan, Cigna’s CEO for Hong Kong, says the company routinely gets such inquiries, and it wanted a way to automate the process. It was also an easy way to begin working with artificial-intelligence tools.
It chose Clare.AI because of its local-language capabilities and its reliable natural language recognition, says Johnson Wong, Cigna’s senior manager for transformation.
“For some other [vendor] solutions, if I asked a question a bit differently from the standard question, they can’t answer – especially if it’s in Cantonese,” said Wong.
Bianca Ho, co-founder of Clare.AI, says security and compliance are also important components to providing chatbots to financial institutions.
Clare.AI doesn’t keep or use data with personal information. It uses aggregate data to provide analytics.
WhatsApp’s messages are encrypted end-to-end. Therefore only the two parties in
For Business API, the data is stored on the servers of the corporate client (Cigna).
“It’s the consumer and Cigna and Cigna’s database that have the information,” Ho said.
Cigna launched its WhatsApp chatbot in April, and since then it has handled about 1,000 queries a week related to “find me a doctor”. The company is working to build out more functionality over the messenger, including claims submissions for both individual and group customers.
Wong says Cigna has the infrastructure ready for the automated process.
“If you ask about your claims, we can easily retrieve the data from the back end to the top. We’ve built the core already,” Wong said.
Its WhatsApp chatbot will then help it collect data based on customer questions, said Chan. For example, if customers ask about particular doctors, they could potentially be added to the insurer’s panel of clinics.
Cigna is also working with a Hong Kong telemedicine company called Doctor Now. This began as a voluntary service created by local doctors for elderly people. Cigna is the first insurance company to work with the service and commercialize it.
The idea is to let patients receive a consultation from licensed doctors via the app at home, instead of having to go to a hospital and wait in a queue. They can also get medicine shipped to their residence.
The business model is similar to Ping An Good Doctor, while Cigna aims at the health-insurance market for local, Cantonese-speaking residents.
Good Doctor is huge in mainland China, where it provides teleconsulting, appointment bookings, and medicine home deliveries. The app serves 265 million users, as of December.
The unit behind Good Doctor, Ping An Healthcare and Technology, listed in Hong Kong last year; the app is now available in Hong Kong and
WeChat’s parent, Tencent, has its own healthcare app in China called WeDoctor, or
Of course, in mainland China, Ping An and Tencent have built digital health empires on the back of poor traditional healthcare infrastructure, vast reservoirs of people (=data), and looser data privacy rules.
Hongkongers have access to doctors already. Its public hospitals have some of the same problems: with an aging population, doctors can be overwhelmed. But the system functions and is widely available. Cigna is a relatively small player in this market: according to Insurance Authority statistics (most recent data available only for 2017), it ranked 23rd in gross premiums. ( For direct medical business, it was ranked sixth in 2018).
It might be adding a feature similar to Ping An’s playbook but its real target looks to be gaining
*None of the internet companies release statistics but Hootsuite graphics and unattributable Reddit opinions suggest WhatsApp leads in Hong Kong thanks to a longer history and a local English-friendly culture, but WeChat is catching up and Japan’s Line also has traction.
Citi, Mastercard vouch for digital coupons
Mojodomo, a Hong Kong fintech, is helping insurers and banks engage directly with consumers.
Financial institutions are digitizing their product design, sales and operations, in order to cut through middlemen and reach end users. But one fintech is working with insurers and banks via their marketing departments.
Mojodomo is a Hong Kong-based company that digitizes coupons and vouchers, like gift certificates. Citi and Mastercard are introducing it to their B2B customers. The company is now raising an initial seed round of funding to help it expand to other regional markets.
“The Citi virtual card account lets us offer a redemption-based payment model to clients using our loyalty voucher platform,” said Dennis Shi, CEO of Mojodomo.
The insurance use case
The best way to understand what this startup does is to take one of its current use cases: insurance.
Enterprises, including insurers, banks and other corporations, pay hundreds of billions of dollars per year in coupons and vouchers, as a means of winning or rewarding consumers.
An insurance company may, for example, hand out supermarket coupons or vouchers for holiday mooncakes. Insurers might do so via their tied agents, as an incentive for agent networks.
We offer a redemption-based payment model to clientsDennis Shi, Mojodomo
But agents are also middlemen who own the customer relationship – an arrangement that insurance companies are keen to sidestep, particularly if they can avoid spooking the agents they depend on for revenues. Hence the vouchers as one way to engage with end users.
This activity is paper-based. It is based on pre-paid vouchers (the insurer buys loads of them from the mooncake shop), with no quantifiable return on investment. The insurer hands out the vouchers to its policyholders, but has no means of knowing who spent them. Many vouchers go unredeemed, or customers give them away to others.
Adding the retailers
Tyrone Lynch, chief investment officer at Mojodomo, says the company’s platform allows insurers to issue vouchers in the form of credit, with each tied to a token, similar to a credit-card number. Insurers can issue these digitally – perhaps as an incentive to get people to download their app – and they only pay the retailer when a voucher has been redeemed. With everything tracked, the insurer’s marketing team can get a precise hold on what’s working and who’s cashing in.
The mooncake shops would lose out on giant, up-front bulk sales. They’d only get paid for vouchers that redeem. But the payment would be instant, via Mastercard and the banking system, versus having to wait for the insurance company to send them the money owed. Today, retailers have a cumbersome audit requirement to report the vouchers they do receive, whereas there’d be no need with a digitized process.
We’re using digital tools to move into an open-loop platformTyrone Lynch, Mojodomo
Lynch says the company is in a proof of concept with a global insurance company in Hong Kong that wants to connect with its most lucrative policyholders, particularly when an independent sales agent quits. It is also working with mainland Chinese banks. These institutions can issue a voucher either directly via SMS, or from their app.
“They were getting only about 50% utilization of their prepaid vouchers, but now they’re redeploying their marketing budget and getting realtime feedback on their clients,” Lynch said.
Revenues from marketing budgets
Mojodomo is more of a marketing business than payments, at least in its revenue model. Instead of charging the merchants (the mooncake shop) like a credit-card company, it charges the marketers at the insurance company or bank 8% of the value of redeemed vouchers.
That’s a large fee – but Lynch says it’s worth it to marketing departments that need to deploy their budgets but haven’t been able to find reliable ROI measurements.
“Most enterprises are simply digitizing their paper-based vouchers,” he said. “They’re still operating in a closed loop. We’re using digital tools to move into an open-looped platform.” A closed-loop means customers can only convert with the issuer itself: like using a Starbucks voucher. But open-loop is based on credit, using a B2B payments model, so that now the retailers or other third parties are part of the circle.
Mojodomo’s tech itself is not unique: it’s raising money now to be first into various Asian markets, such as Taiwan and Singapore, while relying on partnerships with Citi and Mastercard to get introductions to clients – such as the global insurer in Hong Kong and the banks in mainland China. Citi has also provided a credit line, while it is relying on Mastercard’s virtual card and payments rails.
In the case of the Chinese banks, part of its selling appeal is digitizing vouchers that customers can redeem overseas, using QR codes at participating retailers. Using Mastercard, the company is giving Chinese banks a means of issuing loyalty points that customers can use abroad. The fintech is still working on a mechanism for foreign exchange.
The fintech is currently seeking a $2 million seed round but expects to immediately follow up with a $15 million Series A round early next year. The proceeds are to go to building a presence in multiple markets, including credit lines. To date the company’s founders have bootstrapped it by about $500,000.
MSIG’s Asia offices file separate claims to digital strategy
The insurance company is pursuing digital transformation, but that means different things to different local teams.
“Insurers are late adopters of fintech”, said Mack Eng, Singapore-based executive vice president of Japanese insurer MSIG. So insurers bring in third-party fintechs to help speed up their transformation.
MSIG’s claims system alone involves three partners: DBS Bank, NCS (a robotics company) and Laserfiche (enterprise software). Their services may overlap, but MSIG is open to explore with different partners.
MSIG’s example is in line with industry trends. Sanjay Varma, director for Asia Pacific at vendor FIS, says financial institutions in the region are increasing the number of third-party collaborations.
FIS just issued a report that says only 47% of Asian companies with clear leadership in digital transformation say their technological capability is sufficient to meet their growth plans.
Varma says the pattern is for companies to hire outsiders who bring change to the corporate culture; then they build internal digital platforms; and finally they bring in third parties to fill the gaps.
Singapore goes robo
MSIG has travelled down a similar road. Eng was hired in 2018 just after the insurer embarked on a digitalisation campaign for Asia. “It’s critical that leaders set the right tone,” Eng said, to ensure the urgency of the task is communicated to all levels.
Since then the company has built a foundation for a new generation in core infrastructure, and followed by partnering with outside players.
MSIG’s regional strategy has been based on robotic process automation (RPA), deploying computerised tools to handle simple, repetitive, time-consuming tasks, in order to save on human costs and reduce processing errors.
Business units can select what is most relevant for themMack Eng, MSIG
NCS, a subsidiary of Singtel, has tailored two bots for MSIG. One is called Zac, which processes travel claims submitted online, giving customers immediate emails back to acknowledge when a claim’s been filed. It cuts processing time of claims submissions from 14 minutes to 3 minutes, a time savings of 70%.
The second bot is called Velma, which enters details about automobiles for policies covering fleets. The time to log vehicle information has been slashed from about two minutes to 40 seconds.
Hong Kong’s holistic approach
Zac and Velma have been introduced to MSIG’s Singapore and other regional markets, although not yet to Hong Kong. That market has taken a different path: “Business units can select what is most relevant for them,” Eng said.
MSIG Hong Kong works with Laserfiche, which provides software that manages the overall flow of information through the enterprise (this is known as enterprise content management, or ECM; Oracle and IBM are industry leaders in this space).
ECM analyzes all kinds of information, including emails, documents, and images, in order to redesign workflows (as opposed to RPA, which simply improves existing processes but doesn’t change their function).
“It’s starting from scratch,” said Alan Yue, MSIG’s I.T. leader in Hong Kong. “We digitize our claim service to make it basically into a clean sheet.”
Hong Kong customers can now upload their supporting information instead of mailing hard copies when submitting a claim. The firm says 80% of online customers have used this channel. The software now also confirms submissions instantly via email or SMS, and it can forward them immediately to authorized insurance brokers or agents.
It’s starting from scratchAlan Yue, MSIG
ECM, in theory, should be a more strategic solution than RPA since it paves the way for artificial intelligence and cloud computing. ECM help companies transform data sourced from many places (including social media) into data that is structured, and therefore machine-readable for analytic purposes.
API -the payments piece
Finally, MSIG has partnered with DBS to enable real-time payments for claims that are approved. MSIG is the first user of DBS’s RAPID program, which launched in 2017. DBS customers can buy an MSIG policy on the bank’s website and enjoy real-time payment of claims, with DBS’s payment API integrated into MSIG’s claims process.
Having onboarded partners, MSIG now needs to make sure it stays on top of other relevant solutions in the market – not a simple task, given the ever-growing number of insurtechs and other tech providers. MSIG became a founding partner of startup accelerator Plug and Play’s insurtech platform in Singapore. Back in MSIG’s home market of Japan, other institutions are also joining this network, including Japan Post Insurance.
Eng says membership keeps the firm on top of emerging companies as well as mature vendors. MSIG has set up dedicated teams in Asia and Silicon Valley to manage its Plug and Play relationships.