Alibaba combining innovation with a large customer and technology base for a potentially compelling new insurance product for an under served market.
While this type of shared insurance began as early as 2016 in China with dozens of players back then, the fad didn’t last long.
Many policyholders quit in a year at that time due mostly to 1) insufficient size (size of the policyholders poll is critical to sustainability, the more the merrier); 2) lack of transparency; and 3) insurance frauds, all these issues rendered the business model unprofitable.
Alibaba's approach changes all that.
Ant Financial’s mutual insurance product offering is set to disrupt how the traditional insurance sector works, with its large customer base, advanced big data/blockchain technologies, and an unconventional concept, it could reduce some of the insurance premium costs and make insurance products way more affordable than they are today. On the other hand, the company also need to avoid the pitfalls its predecessors fell into, by making good use of its technologies, providing a transparent claim process, as well as designing a viable policy.