Internet is transforming the way insurance is sold in China.
The country’s online insurance premium has hit 81.6 billion RMB ($12.75 billion USD) in the first half of this year, on par with the 85.89 billion RMB ($13.24 billion USD) annual premium incomes achieved in 2014, according to data released by Insurance Association of China.
Of the total amount, premiums from property insurance policies sold online surged 69% YOY to 36.32 billion RMB, accounting for 8.5% of the total premiums for property insurance. Those from life insurance rose by 343.4% to 45.28 billion RMB, representing 3.5% of the total life insurance sales.
Online insurance premium represents overall 4.7% in the whole industry in H1 2015, up from 4.2% in 2014. Online insurance has become a major momentum to drive the sustainable growth of insurance sector, contributing to 14% of new business growth. The number of insurance firms with online operations increased to 96 from 85 at the end of last year.
The report indicates that the rapid growth of online insurance business is mainly driven by three factors:
- Popularity of financial insurance products sold through third-party e-commerce channels, such as Tmall, JD and Ctrip. Motor insurance, which account for 56.4% of online insurance premium incomes in 2014, is another major boost for the growth. However, its dominance is also creating concerns for the unbalanced development of the industry.
- Insurance companies, especially small and medium-sized insurance firms, started to realize the importance of online insurance business and poured more resources in the sector.
- Maturity of e-commerce platforms and enrichment of insurance product categories.
It is pointed out that the wider application of cloud computing and big data technologies is going to bring new insights to insurance companies and help them get to know their customers better.
Despite the fast growth, the emerging market faces lots of problems like: product homogeneity, inadequate application of new technology and cyber security risks.
As traditional insurance companies are trying to explore online businesses, internet companies are flocking to the sector with edges in e-commerce promotion channels and technologies. Alibaba and Tencent have jointly established Zhong An, an online insurance company, with Chinese insurance company Ping An last year. Tencent Cloud just strikes strategic partnership with Anxin Property Insurance, an internet-aided insurance company, to give full play to its cloud computing and big data technologies.
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