Evolving Digital Business Models: How China Is Advancing the Insurance Proposition to Take Advantage of the Digital Age
Under the new insurance Internet ecosystem, insurance companies are using Internet thinking to bring innovation to products and services.
In the report Evolving Digital Business Models: How China Is Advancing the Insurance Proposition to Take Advantage of the Digital Age, Celent analyses the insurance Internet ecosystem, defines Internet thinking, and introduces how Internet thinking has been used in the Chinese insurance industry. Celent also summarizes what other parts of the world can learn from Internet thinking by China insurers.
Under the pan-Internet environment, no business is isolated any more. E-business platforms, mobile payment platforms, and social networks are increasingly playing an important and controlling role in China. Insurance companies have started to consider themselves part of a larger ecosystem, and are rethinking their relationship with vertical industry platforms, third party e-business platforms, WeChat, Alipay Wallet, traditional channels, and strategic partners.
Insurance companies are using Internet thinking to bring innovation to their products and services. “Internet” here is not a narrow definition just referring to the Worldwide Web, but a wider concept which also includes social media, mobile apps, gadgets, and other digital services. Internet thinking means developing business models based on concepts such as free (or almost free) services, the user as king, user experience, the social economy, and data and analytics driven businesses.
In the report Celent introduces many examples of how insurance companies in China acquire a large consumer base through providing free or almost free products and services, how they improve user experience through simplified products and processes, intuitive user interfaces, gamification, and other digital services. The report also discusses how they develop products and services that enable and encourage people to share, and how they leverage big data and analytics to provide personalized products, services, and marketing.
Observers outside China may be aware of the innovation that is happening in China, but often draw a quick conclusion that because their markets lack huge business volumes, such innovative models do not apply to their country. Celent believes that other parts of the world can learn from China by leveraging Internet thinking in the insurance business.
“Insurance companies used to think of themselves as the center of the insurance business ecosystem,” says Wenli Yuan, a senior analyst with Celent’s Asian Financial Services group and author of the report. “Insurers need to rethink the business model in the new ecosystem, expand the business value chain to provide scenario-based services, or retract to become pure capacity players/underwriters.”
In the upcoming report Digital Strategies in Insurance: Lessons from China, Celent will suggest a digital strategy to enable initiatives arising from Internet thinking to be sustainable.
This report contains three tables and one figure.