Insurtech innovation: what Southeast Asia can learn from India and China

Ziheng
Saison Thinking
Published in
8 min readSep 12, 2022

Despite having their own ecosystem and regulations, India and China offer inspiration for global innovators. In this piece, I explore some case studies on how social media, the subscription economy, and digital agents are changing the insurance landscape in China and India, and what we can learn from them.

Leveraging social media — the case of Zhong An Insurance and TikTok

Social media is becoming a key vehicle for brand building, communications, and a platform for customer service and sales. Brands are creating new formats of content to cater to their young adult customer base who value engagement, short-length, and authenticity.

While most people wouldn’t associate their insurance with social media, the leading Chinese online-only insurance firm, Zhong An, is partnering with TikTok to revolutionize how people experience insurance. Zhong An has created hundreds of entertaining and educational TikToks, attracting 4.2M followers and over 200M total views.

When a customer comes across a Zhong An video while scrolling TikTok, they can read more about the product, see reviews, choose a plan, and buy it — all while staying in the app.

Purchase flow of Zhong An Insurance on TikTok

It’s not just buying policies. Customers can also leave reviews, compare policies, contact customer services, submit and track claims in-app, through Zhong An’s TikTok Shop page. By doing so, Zhong An also creates a highly convenient closed-end loop from product discovery, comparison, purchase, to claim and renewal management.

Zhong An’s TikTok Shop page

Implications for Insurtechs in Southeast Asia

Zhong An’s partnership with TikTok is a huge success, and has cemented TikTok as a key pillar in Zhong An’s omnichannel experience and brand-building strategy. In my view, TikTok helps Zhong An solve some key challenges:

Target marketing: Zhong An uses different influencers to target different audiences, based on their demographics. For their life and health insurance products, they feature Guoli Zhang, 67, one of the most famous Chinese actors throughout the 90s and 00s.

  • With over 600M monthly active users in China, TikTok is no longer an app exclusively for Gen Z and Millennials. The over-50s are the fastest-growing age bracket in Tiktok China, accounting for about 10% of the total user base.
  • Life and health insurance policies are usually managed by one decision-maker in the family in China. Recruiting an ambassador from the same generation as those most likely to make policy decisions is a strategic and targeted choice.

Embedded experience: Zhong An embeds the whole insurance process — from discovery and purchase, through to claim and renewal — into TikTok. Customers do not need a separate app, reducing drop-off during the download process.

Automated customer services: Zhong An analyses customer profile data to estimate the likelihood of them canceling before the renewal date. Those customers most likely to cancel will be contacted by a customer agent to encourage policy renewal.

However, delivering financial products on social media comes with its own challenges. First, data is unstructured. It requires a certain level of data modeling to generate actionable insights on customer profiling. Second, with increasing data privacy concerns and regulations, accessing and using data is becoming more difficult and costly. By becoming a content creator, Zhong An can communicate directly with its customers.

With the launch of TikTok Shop in Singapore this month, we may see local insurers opening their own online shops too. There are still regulatory hurdles to tackle, such as a brokerage license (TikTok holds an insurance brokerage license in China via its wholly owned subsidiary). However, considering previous reports of a digital banking license application, financial products may play a growing role in TikTok’s roadmap.

Leveraging the subscription economy — the case of Kenko Health

In the era of subscriptions, why should insurance still be paid in lump-sum premiums? Subscription models provide policyholders ongoing coverage, with more control and flexibility to change their coverage as their needs change. Both the ability to turn features ‘on’ and ‘off,’ and the convenience to add additional coverage offer a highly versatile digital experience.

Kenko Health, is an India-based startup offering bite-sized monthly healthcare plans without the commitment of a traditional health insurance policy. With a simple proposition and less complicated terms, Kenko’s affordable healthcare plan easily captures customers while providing them a more comprehensive and engaging service. To make the subscription model work, Kenko focuses on:

  • Flexible Coverage. Traditional health insurance plans only cover hospitalization (in-patient department, or IPD) costs. Yet 70% of an individual’s healthcare expenses in India are out-patient (OPD) expenses such as doctor consultations, which can be a costly surprise. Kenko offers coverage for both IPD and OPD costs; from doctor consultations, medication, and diagnostic tests, expanding to dental, mental health, and preventive services. Customers choose plans based on the size of their family and extent of coverage desired. This fills a gap in the current market, with many customers reaching out to Kenko directly for the OPD coverage after taking traditional insurance.
Healthcare expenditure in India
  • Affordability. Kenko’s target customers are low-to-middle income populations in tier-2 and -3 cities in India. They are the least insured, have the lowest budgets, but are the most prone to additional health expenses. The lump-sum premium model of a traditional insurance plan is inaccessible to these families. Kenko’s subscription plan starts from US$ 4 a month for an individual to US$ 15 a month for a family of four, significantly lowering the barrier to healthcare protection in India.
  • Care Network. The ‘care’ in healthcare extends beyond hospital treatment, it includes medication, social support or preventative measures. By building a strong offline care services network, Kenko also increases the frequency of interaction with customers, which helps with customer retention by converting from pure consumption-driven services to subscription-based services. It’s a win-win-win situation for customers (superior services), hospitals and pharmacies (new revenue stream), and insurers (risk management).

Implications for Insurtechs in Southeast Asia

Kenko Health’s subscription-based approach significantly lowers the barrier to entry for insurance in emerging markets, by making the purchase process much shorter and friendly to more impulse-driven buys. The growing young population also seeks flexibility, digital and app-based solutions that subscription offers.

But to make the subscription work, other factors also need to be taken into consideration during product design:

  • A seamless subscription experience, supported by cashless payment, fast settlement, fraud detection, and real-time decisioning capabilities. Any friction in the process will likely cause potential users to drop out. This requires the startup to develop strong knowledge in AI, APIs and advanced analytics.
  • Comprehensive online-to-offline transitions. Healthcare is ultimately an offline pursuit, so moving smoothly between the online-to-offline experience as well as a strong network of offline providers is essential to increase customer interaction, which leads to higher satisfaction and renewal.
  • Flexible by design, while loyalty is rewarded. Customers should feel empowered to ongoingly change their policy to suit their circumstances, but will only continue to do so if they are building brand loyalty and product trust — otherwise, they’ll happily jump ship to the next competitor.

Leveraging digital agents — the case of Turtlemint

One of the biggest growth areas for Insurtech I identified in my previous article is digital agents. The pandemic has driven people’s demand for insurance. But consumers find it difficult to make a decision themselves, relying on agents or advisors to guide their purchase. To capture this, insurers must ensure potential customers have access to the right advice and the right policies.

Turtlemint, is an India-based Insurtech platform that equips insurance agents with digital tools to better understand customers and match them with the right insurance policy. The platform has a network of over 120,000 agents who serve more than 1.5 million customers. Having raised over US$ 190 million in VC funding, it is one of the most highly-valued Insurtech in India.

Instead of using technology to change how people buy insurance, they chose to change how it is sold. Instead of cutting out the intermediary, Turtlemint empowers them. Turtlemint offers agents a one-stop solution for insurance operations, efficiently and at scale. Its key features include:

Training

  • The platform contains training modules, materials, and masterclasses to empower agents to be truly digital and knowledge-ready.
  • The certification course on the platform helps agents to prepare for the license examination to conduct insurance selling according to the guidelines of the Insurance Regulatory and Development Authority of India (IRDAI).

Customer onboarding and servicing

  • Turtlemint’s verification tool makes customer onboarding fully digital and hassle-free.
  • It aggregates online quotes from 45+ general & life insurers in one single interface for ease of comparison.

CRM

  • Agents can easily manage policy issuance and renewals, claim and payouts in one place.
  • Agents can also create marketing materials to share on Whatsapp and SMS, and generating and automatically qualifying leads via Whatsapp interactions
Turtlemint’s mobile app for agents

Implications for Insurtechs in Southeast Asia

Agents as a primary distribution channel in the short- to mid-term will be hard to replace. Complexity remains one of the most common reasons for customers to drop-off from purchasing policies — especially for first-time buyers. Turtlemint enables agents to distribute insurance in a more efficient way, and agents are able to match customers with the best product and close the deal without the burden of endless paperwork. Turtlemint’s success is built on the following qualities:

  • An intuitive and easy-to-use platform: Turtlemint provides a digital onboarding journey for the whole agent training, licensing, and verification process. As a result, advisors are able to complete the process and start selling fast and efficiently.
  • Turtlemint’s model enables more independent agents compared to the captive agents dominated in the current insurance market. Agency problem remains one of the biggest criticism for the captive agent model due to its limitation of selling only products from the bonded company.
  • Maintain efficiency without sacrificing customer satisfaction: Turtlemint was able to incorporate customer feedback into the product development and iteration process to constantly improve on knowledge, speed, and new product features.This enables agents to match or exceed what in-person interactions can deliver, freeing up time to identify and connect with prospects.

Conclusion

Insurtech in Southeast Asia is still in its nascent stages, and I expect to see the emergence and growth of innovative business models in the upcoming years. These case studies from China and India should serve as inspiration to Insurtech innovators. I look forward to speaking with founders building in this space on what innovations they’re tapping into — reach out to me on ziheng@saisoncapital.com to set up a coffee.

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