Data analysis and risk assessment is core to many insurance services. The process of undertaking such assessments is improving through the adoption of artificial intelligence. One country that has rushed to adopt such technologies is China, where many firms are deploying fintech to provide risk management and anti-fraud services to insurance institutions.
Insurance is a huge market in China, where annual premium income has grown from $21.12 billion in 2011 to $46.77 billion towards the end of 2017. The market size of insurance, according to Daily Fintech, in China has surpassed Japan and is second to only the U.S. market.
Analytics, AI and risk management
An example of a company offering such a service is Tongdun Technology, which serves over 7,000 customers. The Hangzhou based company uses big-data analytics and artificial intelligence to run its risk management and anti-fraud services. One reason for such interest in digital fraud services, Asia Money reports, is because China lacks a comprehensive credit registry system. It is estimated that only 100 million people, from the population of 1.3 billion, can have their credit status checked. This leaves the system open to insurance fraud.
Tongdun’s integrated intelligent risk management system processes Application Programming Interface calls made by customers each day. The system contains a database of one million Internet potential fraud suspects.
As well as fraud protection, big data tools have other applications for the industry. Insurers are increasingly reliant upon live analytics to support more personalized engagements in line with individual customer needs
Cloud services
A second example is with Alibaba Cloud, which offers cloud services to domestic insurance and financial institutions. Alibaba Cloud provides a suite of cloud computing services that covers elastic computing, object storage, relational database, big data analysis and artificial intelligence. One different feature with the service is that for smaller insurance firms, such as those found in urban and rural areas, a shared cloud platform can be used. This enables smaller institutions to access cloud computing and big-data services in a more cost-effective way.
Furthermore, in 2017, Alibaba entered into a partnership with some 20 large domestic banks to create ‘Finmall’ — a fintech mall — to make its cloud services more easily accessible to the entire banking sector in China.
Other insurance companies can also sell their products through the platform and be supported by data analytics on their sales performance.
App based medical insurance
A third example of insurtech in China comes from Tencent Holdings Limited and through its platform WeSure. The company offers a medical policy called WeCare, which was co-launched towards the end of 2017 with licensed digital insurer Taikang Online. Wesure also provide customers with policy management services. Following medical services, the company aims to launch auto insurance in the near future.
With the service, users can make insurance purchases, or inquiries and claims, directly via platforms on the instant messaging and lifestyle platform WeChat or through the instant messaging platform QQ.
