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China’s ZhongAn Online P&C Insurance is poised to expand into neighbouring Japan, in a move that could hasten faster adoption of digital insurance in the mature and mostly undisrupted market.
ZhongAn recently partnered with Sompo Japan Nipponkoa to tap into the Japanese insurance market, which could triple in size to ¥179 billion (US$1.59 billion) by 2021, Nikkei reported.
This will be the first operational entry into Japan by a Chinese insurer, with Ping An Insurance maintaining its presence in Japan solely for investment purposes. Additionally, ZhongAn’s entry may create a shakeup in the market, spurring local players to digitise in the face of competition, the report said.
“In the near future, the focus will be on the Asian region,” said Wayne Xu, ZhongAn’s COO and the head of its international arm, ZhongAn International.
China has become one of the global hotbeds of fintech and insurtech, with low-cost, smartphone-based services such as Alipay mobile payments proving very popular. ZhongAn was established in 2013 and sells various niche insurance products online, such as flight delay insurance and insurance for return shipping of online shopping purchases. Most of its consumers are young – between the ages of 25 and 35.
“As a new insurer, we have to understand the users’ needs,” Xu said. “By leveraging new technology, we will be able to underwrite a lot of fragmented risks. [Due to automation], most of our products are done within two weeks from design to development to testing to productising.”
Unlike traditional insurers, Xu says that as an online-only insurer, ZhongAn can pursue aggressive digitalisation without worrying about cannibalising its traditional business, because there’s none at all.
“The way we look at the industry is how to build everything digitally,” he said. “We never thought about legacy things.”
