Alibaba, Amazon India investment in insurance!
" Amazon India wants to start by selling life, health and general insurance, according to its filings with the Registrar of Companies. The Seattle-based giant said it aims to carry out the business of soliciting, procuring and servicing insurance as a corporate agent.
India’s insurance industry is expected to be worth $280 billion by 2020, according to estimates by an Assocham-APAS report. Walmart-backed Flipkart has sought approval from the regulator to sell life and general insurance covers. SoftBank and Alibaba-backed Paytm already has a corporate agency licence." Bloomberg September 17 2018
Alibaba, Tencent et al are all proven insurance Platform innovators whilst SoftBank continues to invest in insurtech and insurance.
But there is no reason why they should steal a march on Western insurers which have the customer base, insurance products, regional and global coverage and capital strength. They are,however, limited by cultural and strategic timidity not to mention the constraints of legacy systems 15, 20 and more years old.
But they have the opportunity to be first movers and fast followers this year and next. But surely, you say, the first movers are already on a digital march.
I contend that they do this only in a limited way, maybe deploy Slice here, TROV there and deploy some snazzy eFNOL app there.
That is not digital transformation; it is a digital toe in the analogue water. The only way the CEO and Board members can truly say they are digitally transforming the business is if they are reforming: -
- Products for the ways consumers want to consume and buy them AND
- The means to buy online simply knowing they are getting the best price from the insurer AND
- The means to make mid-term adjustments fast and effectively AND
- The means customers can register and manage self-service claims always with recourse to a human claims handler when empathy and re-assurance is needed AND
- Real-time status updates to avoid need to call and ask "What's happening" A ND
- Communication with and orchestration of internal claims, fraud, underwriting and supply chain teams and the whole supply chain AND
- Fast cash settlement or fast repair and replacement
For simple and complex products and claims; for not just Auto or Home & Contents but also Pets, Travel, Healthcare, Vehicle Warranty and Recall and so on.
The good news is that the technology is proven, scalable, cost-effective and deployable now so there is absolutely no reason why Eastern Insurers and tech giants should steal a digital match on western insurers.
Unless, of course, they prevaricate and let it happen. Which is a danger.
Is East Asia leading? Opening markets outside the US may be instructive. East Asia has proven to be a good market and has shown a remarkable progress. Alibaba, Baidu, lINE, Rakuten and Baidu are offering their own insurance products. These enterprises verify the identities, enforce trust and can also access behavioural and financial data which are necessary to provide better policies. Insurance may not be a lucrative business for tech giants in short term but in the long run, tech giants will use their troves of data to compete with their competitors. So, for the time being, we can expect tech giants to form their alliance with the insurance companies wherein both will benefit each other.