The era of "big insurtech" is here

At the 2023 China International Service Trade Fair, the "2023 Insurance Technology Insight Report" (hereinafter referred to as the "Report") jointly written by Beijing Think Development Research Institute, Volcano Engine, and others was released. Representatives from various sectors of industry, academia, and research jointly witnessed the release of the "Report" and discussed the new future of global insurance technology.

The Era of "Big Insurance Technology" Comes

Ten years ago, the concept of "insurance technology" was first proposed. In 2021, with the release of the "14th Five Year Plan for the Development of Insurance Technology", the insurance industry's first medium to long-term special plan officially entered the historical stage. The era of "big insurance technology" has quietly arrived.

The report points out that from 2015 to 2020, China Insurance Technology can be defined as the five years of capital hot pursuit. At the same time, a group of well-known companies have rapidly developed with the help of capital. From 2021 to 2025, the Chinese insurance technology market has experienced a virtuous return in five years. Under policy guidance, it will achieve a return to value and original intention.

It is not difficult to trace the development trajectory of insurance technology. In the post pandemic era, the previously thriving insurance technology track gradually cooled down in the second half of 2021, making it increasingly difficult for insurance technology concept financing. Looking at the development pattern of insurance technology in both the world and China, the trend of "technology leading insurance" or "insurance+" has begun to emerge. This means that technology will shift from means to ends, penetrate all aspects of its industrial chain, and create more insurance demand.

The report believes that in the next five years, insurance technology will become more generalized, with technology no longer relying on insurance but infiltrating the development process of various industries. After reaching a certain stage of development, new risk management demands will inevitably arise, giving birth to a broader concept of insurance technology, namely "big insurance".

He Zhujun, Vice President of the China Insurance Asset Management Association, stated in his speech that after years of development, China's insurance industry has ranked as the world's second largest insurance market in terms of scale and volume for five consecutive years. The technological progress and digital transformation of the insurance asset management industry are ongoing, and the scale of technology investment by insurance asset management institutions has maintained a high growth rate for many consecutive years. The growth rate of technology investment has exceeded the company's operating income and profit growth rate, and the proportion of technology personnel is also in a continuous growth trend. Technology empowerment is an important driving force for the high-quality development of the asset management industry and a key variable for the reform and innovation of various institutions.

Gan Yutao, Executive Director of Beijing Think Financial Development Research Institute, stated that, In 2023, the global insurance technology market remains optimistic, and the power of technology and digitization remains deeply rooted in people's hearts. With the continuous exploration of insurance application scenarios, insurance technology is of great significance in assisting the insurance industry, finance industry, and even the real economy, and has gained global consensus. The space for technology to empower insurance scenarios is broad enough, and market opportunities and potential are excellent. China remains one of the most important and dynamic insurance core markets in the world

Digital Intelligence Technology Accelerates Industry Evolution

With the progress of the times, digital technology has gradually penetrated various industries, bringing revolutionary changes to traditional business models. The insurance industry, as an important component of the financial field, is naturally no exception. In this context, the large-scale application of digital intelligence technology has become a key factor driving the continuous evolution of the insurance industry.

The report points out that the current risk management principles in the insurance industry have gradually evolved from equal risk management to reduced risk management. Insurance technology companies, relying on the widespread application of new technologies, have transformed originally uninsurable risks into insurable risks, relaxed the originally restricted underwriting conditions to comprehensive underwriting, and created a broader insurance market space for the market to fill. Technology no longer exists based on insurance, but permeates the development process of various industries. After reaching a certain stage of development, new risk management demands will naturally arise, giving birth to a broader and broader new concept of insurance technology.

From risk assessment of big data, customer service of artificial intelligence, to digital intelligence technologies such as AIGC and privacy computing, they are profoundly changing the operational mode and service experience of the insurance industry. With the widespread application of these technologies, the insurance industry is also rapidly moving towards a more efficient, transparent, and personalized direction.

Cui Wenxiu, Director of Solutions for the Volcano Engine Insurance Industry, introduced that "China's insurance technology participating entities can be divided into three categories: insurance, platform, and technology service providers. Each of the three entities has its own advantages. As a technology service provider, we are not only a technology supplier, but also leverage our own advantages to empower the industry

Cui Wenxiu stated that the field of large models is currently receiving widespread attention, and related AIGC technology is developing rapidly. At present, Volcano Engine has collaborated with multiple insurance companies to implement, empowering industry innovation.

Insurance itself is a marketing driven industry, so insurance agents should be given the most attention. Currently, insurance agents are facing some challenges, and with the reduction of agent size, it indicates that the previous tactics of crowd recruitment can no longer adapt to the current market demand. The threshold for insurance agents has been raised compared to before, and we hope to use our technical strength to help insurance agents achieve self-worth enhancement, improve their business development level and capabilities Cui Wenxiu said.

Future Trends in Insurance Technology

The report points out that there will be five major trends in insurance technology in the future.

Trend 1: Building an open insurance platform in the industry and jointly creating an insurance ecosystem. The report proposes the concept of "open insurance", which involves sharing and managing insurance related data and other types of personal information between different organizations through application programming interfaces (APIs) that connect different programs. Open insurance returns the "ownership" of data to consumers, who can specify which companies can use their information for which purposes. Through open insurance, a comprehensive insurance ecosystem can be built, covering the entire process from insurance product design, sales, claims settlement to after-sales service. Through the Internet and technological means, it achieves high digitization, intelligence, and collaboration, providing customers with comprehensive insurance services, as well as personalized and efficient service experiences.

Trend 2: Web3.0 and virtual reality technology will accelerate the digital transformation of the industry, generating a disruptive wave of innovation. As a new generation of Internet revolution, the meta universe will be a collection of mature and emerging technologies, including artificial intelligence (AI), enhanced and virtual reality (AR/VR), blockchain, digital twins, edge computing, cloud technology, digital currency, irreplaceable tokens (NFTs), social platforms, e-commerce and digital markets. The combination of these technologies can create immersive content and experience. In the coming years, the rise of web3.0 and virtual reality will begin to affect all aspects of the insurance industry - from employee training, insurance sales to fund management, and company operations.

Trend 3: The new generation of marketing technology focused on content marketing will accelerate the empowerment of the entire industry. Content marketing refers to attracting target audiences through the creation and distribution of valuable content, thereby achieving brand promotion and sales growth. Insurance, as a financial product with a threshold for understanding, needs to guide customers through content while establishing brand image and reputation; Valuable content can increase customer engagement and interactivity, enhance user retention and conversion rates. In the process of content marketing, insurance companies can use various forms of content, such as graphics, videos, social media posts, etc. Through content marketing, insurance companies can attract customers and increase customer loyalty, thereby gaining more sales opportunities and business growth. Insurance companies can also create content that meets the interests and needs of their audience by analyzing their needs and behaviors, thereby improving the sharability and dissemination effectiveness of the content.

Trend 4: Cybersecurity risks in the digital age will accompany them for a long time, and privacy technology under the premise of data compliance will accelerate its development. In 2022, China's data compliance will develop comprehensively, and privacy technology will further move from concept to implementation. Enterprises and individuals continue to rely on big data and constantly evolving digital technologies to drive data processing activities and explore data innovation. However, there are hidden risks behind prosperity, as the value of data attracts malicious attacks and frequent looting from both internal and external sources. The circulation of data raises personal privacy concerns and compliance concerns. Global data compliance and privacy protection face serious challenges. From vulnerability attacks to data theft, from economic losses to compliance costs, from system security to privacy protection