Many of us use apps to choose a good restaurant. Comparison sites such as Policybazaar, CompareAsia and GoBear have brought the same concept to financial products. Now the service is taking off in China—with the ambitions in scale and data-crunching to match.
This week, Phoenix Finance—a financial investment platform of parent Phoenix Television group—is launching one of the first such platforms in the China market, under the brand Intellinsur. Phoenix Finance already has eight million users on its wealth-management app, and it is now extending its capabilities into insurance.
One difference between Intellinsur and other digital insurance services is that Intellinsur won’t sell any insurance products. It’s a pure third-party advisory platform.
This is in contrast to simple general-insurance products covering flight delays or car accidents, which the likes of Zhong An and other internet companies have mastered. End-to-end automation, from purchase to claim, is more difficult for life insurance. So a wave of “smart consulting” providers has emerged.
Zhong An itself is getting in on the act: earlier this year, it launched Zhong An Elf (众安精灵), to help users select suitable policies. But for now, at least, Elf is limited to Zhong An products. Intellinsur covers over 4,000 products, says Duan Hongyi, senior director for insurance at Phoenix Finance in Beijing.
“We don’t sell products,” said Vince Zhang, president of Phoenix Finance. “We must make it a completely neutral platform and solve the problem of users’ trust.” Part of that is offering this at zero fees, and monetizing the service as it gathers users and their data.
A successful business model, according to Zhang, would be like dianping.com, the dominant restaurant review website in China (similar to Yelp in the U.S.).
Intellinsur combines neutrality, A.I.-based product recommendations, and what the company calls the “K factor”, an algorithm for choosing products offering the best value to a given customer.
DigFin tested the trial version of Intellinsur. After answering a dozen questions around age, gender, profession, health habits and financial status, the platform depicts an overall picture of the customers’ health and financial risks.
“We compare personal answers with industry data to give a personal risk assessment,” said Duan.
We don’t sell products. We must make it a completely neutral platform
Intellinsur then recommends a combination of insurance products to address these risks.
For critical illness insurance, Intellinsur suggested DigFin’s reporter buy two critical-illness products, one for lifetime coverage, and the other for coverage to the age of 65, in order to cover expected medical expenses as well as to compensate for the loss of income when the user falls ill. The algo works out a budget to combine the pricey lifetime plan with a more pragmatic age-based one, assuming this reporter won’t be making income in retirement.
Such outcomes are based on Duan’s sales team collecting customer feedback over the past three years, but the A.I. is constantly being augmented.
“No book or training teach you to buy critical illness insurance in this smart way,” she said.
The firm also deploys natural language processing to train its A.I. to understand and explain the features of the thousands of products on its database. It presents descriptions in plain Chinese alongside the insurance provider’s technical information.
The final ingredient is the firm’s “K factor” to choose the ultimate product per customer, based on a net premium-to-price ratio. It’s based on calculation of products’ net costs by Phoenix actuaries. “This is our competitive edge,” Duan said.
She believes such “smart consulting” will revitalize insurance sales in mainland China. As we know, a lot of mainlanders rush to Hong Kong to purchase insurance products and count for half of the Hong Kong markets' sales. Phoenix believes the biggest pain point for consumers is choosing suitable products against a backdrop of low trust in traditional sales channels. Even friends-and-family recommendations are viewed with suspicion in China, she says—an attitude that has fuelled the coffers of global insurers in Hong Kong selling to mainlanders.
Duan argues that, while a human is needed for financial planning at the family level, A.I.-based services can deliver better outcomes than human salespeople for individuals, with results delivered in minutes.