China's Insurtech Development from the Perspective of Digital Transformation: Current Status and Suggestions

The "2023 Insurtech Insight Report" was released for the first time at the 2023 China International Fair for Trade in Services, which analyzed the overall development of China's insurtech from a macro perspective. The overall situation and characteristics of China's insurance technology In recent years, China's insurance technology has developed by leaps and bounds, and its market has also shown "four major trends and four characteristics" in the process of development. (1) Four major trends The first of the "Big Four" is the rise of insurtech platforms. China's insurtech platforms have risen rapidly in the past few years. For example, the WeChat platform has partnered with Ping An Insurance to launch the "Micro Ping An" insurance service, which allows users to purchase various insurance products through WeChat mini programs to achieve online one-stop insurance services. This insurtech platform based on mobile Internet and social media has greatly improved the convenience and experience of users' insurance purchase, and has achieved good market response. 

The second is the use of artificial intelligence to assist claims. Artificial intelligence has also made important progress in the field of insurance claims. Ping An, for example, used natural language processing and image recognition technology to develop an intelligent claims settlement system that can automatically review and quickly close claims materials. This intelligent claims process greatly improves claims efficiency and accuracy, reduces human error and disputes, and provides customers with a better service experience. In addition, the application of blockchain in the insurance industry is becoming more common. Blockchain technology is also widely used in the insurance industry. For example, China Pacific Insurance Group, together with a number of partners, has built an insurance business traceability platform using blockchain technology to achieve transparency and traceability of insurance data, and improve the security and credibility of data.

 In addition, blockchain can also streamline the insurance claims process, improve efficiency, and provide more possibilities for risk management in the insurance industry. Finally, there is the development of insurtech startups. China's insurtech startups are also booming. For example, Weibao, a mobile insurance service-focused startup, provides personalized insurance products and services through mobile apps, as well as intelligent risk assessment and claims services. This innovative business model and technical means have attracted a large number of young users to participate in insurance purchase and use, and have achieved rapid growth. On the whole, China's insurance technology has shown a rapid advancement trend. Through innovative business models and advanced technical means, insurtech is improving the convenience, personalization and intelligence of insurance services, and promoting the digital and intelligent transformation of the insurance industry. (2) Four major characteristics The "four characteristics" of China's insurance technology are mainly reflected in the following aspects. First, the penetration rate of mobile Internet is high. China has a huge mobile Internet user base, mobile payment and smart phone penetration rate is high. This provides a broad market opportunity for insurtech. Taking Ping An's "Micro Pingan" insurance service as an example, they have created an online one-stop insurance service using the WeChat platform and mobile payment technology, allowing users to purchase insurance products anytime, anywhere through mobile devices. This mobile Internet-based insurtech feature makes insurance services more convenient and accessible, and meets the personalized needs of users. Second, big data is widely used. China's insurance industry data is large and diverse, and the use of big data analysis technology can extract valuable information and insights from it. Chinese insurtech companies widely use big data technology to help insurers conduct risk assessment, accurate pricing and personalized recommendations.

 For example, Chinese life insurance companies use big data analysis technology to evaluate consumers' medical information and provide customers with tailored medical insurance products. This personalized pricing and recommendation based on big data enhances the accuracy and market competitiveness of insurance products. Third, innovate business models and technical means. Innovative business models and technical means have emerged in China's insurance technology field, bringing new development opportunities to the insurance industry. For example, Weibao, a start-up company focusing on mobile insurance services, launches personalized insurance products and smart claims services through mobile apps, and realizes flexible and personalized pricing of insurance products through embedded technology. This innovative business model and technical means meet the needs of young users for convenient, flexible and personalized insurance services. Fourth, the integration and development of financial technology and insurance technology. China's financial technology and insurance technology are integrated with each other and jointly promote the development of the insurance industry. For example, Alipay has partnered with Ping An to launch the Alipay insurance service, where users can purchase insurance products through the Alipay App and enjoy the convenient payment and claims services provided by Alipay. This cooperation model between fintech and insurtech enhances users' insurance purchase and use experience and promotes the development of insurtech. In summary, China's insurtech has the characteristics of high mobile Internet penetration, wide application of big data, innovative business models and technical means, and the integrated development of financial technology and insurance technology. These characteristics give China InsurTech unique advantages and potential in meeting the personalized needs of users, improving user experience, and promoting the transformation and upgrading of the insurance industry. The Future of InsurTech Development: Directions and Countermeasures Although China's insurance technology has developed rapidly and achieved certain achievements, its future development still faces many difficulties that need to be overcome. 

These difficulties can not only further determine the development direction of insurtech, but also directly promote the progress of insurtech. First, there are data quality and privacy protection. Insurers face data from a large number of external data sources (such as social media, sensor data, etc.) and need to analyze this data to provide personalized insurance products. However, the varying quality of data sources, combined with privacy concerns for users, makes it difficult to use and share data. Therefore, insurtech enterprises need to establish a sound data quality management system, screen and clean external data sources, and ensure the accuracy and credibility of data. At the same time, the privacy of users is protected by the use of technologies such as encryption and anonymization. In addition, establish a transparent data sharing mechanism with users, so that users are clearly aware of how their data will be used and give users the right to choose. Secondly, it is the combination of technology landing and traditional insurance. Many insurtech companies, while their innovative technologies have potential, face certain challenges in integrating with traditional insurance businesses. The lack of understanding of the traditional insurance industry and the complexity of technology implementation make it difficult to implement technology. Therefore, insurtech companies should establish cooperation and partnerships with traditional insurance companies to jointly explore and implement new technologies. Integrate technology with business with a deep understanding of the business processes and needs of the traditional insurance industry. At the same time, insurtech enterprises should provide technical support and training to help traditional insurance business personnel adapt to new technologies and promote the wide application of technology. Then there's the regulatory and compliance requirements. Insurtech companies face challenges with regulatory and compliance requirements. Regulators require insurtech companies to operate in compliance and protect users, but technological innovation may go beyond traditional regulatory frameworks. Therefore, insurtech companies should actively communicate with regulators to understand regulatory policies and requirements, and ensure that their operations comply with regulations. At the same time, establish a risk compliance team to conduct internal compliance assessment and supervision to ensure the legality and compliance of business operations. In addition, there is market competition and innovation pressure. The insurtech industry is highly competitive, with many businesses chasing innovation and technological breakthroughs. In such a market environment, insurtech companies need to continuously improve their innovation capabilities to maintain a competitive edge. Therefore, insurtech companies should focus on technology research and development and innovation, and continuously introduce new products and services that meet market demand. At the same time, establish a good innovation culture and teamwork mechanism, encourage employees to put forward innovative ideas, and provide corresponding support and resources. Equally important and unresolved is the shortage and development of talent. The insurtech sector needs talent with technical and insurance expertise, but the current supply of talent in the market is relatively inadequate. Insurtech companies face the challenge of talent acquisition and development. In response to this difficulty, insurtech companies can cooperate with universities and training institutions to jointly cultivate insurtech talents. Attract more talent to join the insurtech industry through relevant training courses and internship programs.

 In addition, insurtech companies can offer excellent career development and training opportunities to attract and retain talent. Finally, there is user acceptance and marketing. The promotion of insurtech products and services faces challenges in user acceptance and market recognition. Many users have doubts and distrust of new technologies and products. Therefore, insurtech companies should strengthen marketing and user education to improve users' awareness and acceptance of insurtech. Through promotional activities, user case sharing, etc., to show users the advantages and value of insurtech. At the same time, it provides excellent customer service and user experience to enhance user trust and satisfaction with insurtech. To sum up, to solve the difficulties in the development of China's insurance technology, it is necessary to comprehensively consider data quality and privacy protection, technology landing and traditional insurance, supervision and compliance, market competition and innovation pressure, talent shortage and training, as well as user acceptance and market promotion. Through cooperation and partnerships, strengthening the integration of technology implementation with traditional insurance, strengthening user trust and risk management, actively responding to regulatory and compliance requirements, and focusing on market competition and innovation capabilities, talent training and user education, we can promote the development of China's insurtech and overcome corresponding difficulties.