Expert Perspectives | The Future of FinTech: A Brief Analysis of Industry Disruption and Predictions in 2024

The challenges and driving factors of the development of insurance technology in China

Technological progress continues to drive the development of insurance technology:

The current core of insurance technology innovation is based on the deep integration of high maturity technology and application scenarios, which will directly promote the emergence of new insurance technology innovation business models. Given the increasing dependence of the insurance industry on complex information technology systems, the insurance industry must be prepared for the high risk of network attacks and system interruptions. In this regard, insurance companies and insurance technology companies must deepen their technical risk management capabilities and be prepared to handle IT security incidents and system failures. On the other hand, the interconnected ecosystem still lacks digital agility. The insurance industry needs a well connected business ecosystem to maintain a fast-paced process. A single platform may connect all participants to interact with each other, thereby improving standards and making the industry more competitive. Given that insurance technology providers rely on digital capabilities to reduce costs, addressing fraud risks is key to the online business model of insurance technology enterprises.

The number of professional composite talents constrains the development of insurance technology:

The insurance industry is dealing with a complex pattern of technological talents. From a global perspective, the core of the labor force transformation in the insurance industry is the comprehensive upgrading of talent strategies triggered by the technology wave. On the other hand, in order for insurance companies to achieve technological innovation, data management, and other key measures, the core is human resource strategy. In other words, talent is the prerequisite for insurance companies to complete a series of "bottleneck" tasks such as process automation and cloud migration. Insurance technology requires high-end composite talents who possess basic insurance professional skills, information technology knowledge, and risk control abilities. However, many job seekers are only proficient in a certain professional field and lack comprehensive abilities. The current insurance industry urgently needs to transform its talent cultivation system, create a suitable institutional environment for talent development, expand the scale of high-income individuals in insurance technology, and establish a more flexible and variable talent introduction and promotion system in order to improve the industry's retention rate.

The empowering demand for comprehensive ecological innovation in the insurance industry:

The purpose of all business is to meet customer needs. By tracking the development process of overseas insurance technology, it has been found that global customers are generally reflected in price discounts, convenience and speed, and information symmetry. The innovation of insurance technology companies is also concentrated in these directions. Cryptocurrency payment methods will continue to surge, and in addition, APIs will help and enrich the insurance technology ecosystem. In the future, the insurance industry will play a greater role from a broader technology ecosystem.

Macro level economic downturn, affecting investor confidence:

Thanks to the explosive development of the Internet in recent years, the scale of insurance funds in China has increased from 6.27 trillion yuan in 2012 to 27.15 trillion yuan in 2022, with an average annual growth rate of 14.3%, making it the second largest insurance market in the world. However, looking at the overall development trend of insurance technology in China, the growth has become increasingly sluggish in the past two years. The investment trend of domestic insurance technology shows a cautious attitude against the backdrop of macroeconomic downturn, which poses more challenges to the insurance technology industry, which already requires a large amount of resources and capital support. At the same time, insurance technology achievements also face the challenge of low maturity. For technology achievements that can be widely applied, preliminary technical experiments, small-scale pilot projects, and commercial applications are required. However, the research and development of insurance technology in China has a relatively short starting time, and most of the technological achievements are still in the experimental and demonstration stage. In order to implement them on a large scale, their maturity level needs to be further accelerated and improved.