Internet insurance, is it a chance or a trap?

The past two years have been the mutation of the financial industry. In the 2013, the balance treasure brought history into the era of internet finance, the same year, Peer-to-peer also brought history into the era of Internet credit, and then, the Internet securities, Internet levy, internet banking, all kinds of "internet +" pattern everywhere ... But in such a mutation era, insurance, as one of the most important pillars of the financial industry, has been tepid. Can all kinds of pigs blowing the internet wind, but not the insurance this piece of stone?

I. The four major ills of China's insurance industry

Before talking about China's Internet insurance, it is necessary to analyze the status quo of China's insurance industry. In the past 15 years of product innovation, channel innovation two-wheel drive, the Chinese insurance industry (insurance and life insurance) of the extensive growth began to become moderate. At this point in the moment objectively looking back, it is not polite to say that the development so far, China's insurance industry still faces four chronic illnesses.

1. The awareness of insurance remains weak

I guess people who are reading this are supposed to have a good education, but ask themselves and the people around them, how many of them have taken the initiative to buy insurance products in China? How much did you buy? Compared with mature countries such as Europe, America and Japan, even today, the Chinese people's Insurance awareness, insurance awareness is still relatively preliminary, far from mature.

Taking the depth of life insurance as an example (the ratio of total life insurance premiums to GDP), China's life insurance depth is probably less than 2%, while the Hong Kong region is 11%, Taiwan is 15%, even India has 3%. In addition, in terms of per capita policy, China has less than 1 per capita policies compared to the top 5 per capita policy in Europe and the US. Although the awareness of insurance in recent years has become more and more strong, but generally speaking, China's general public awareness of insurance is still mainly passive, rather than the active pull-style. Weak consciousness is the deepest disease in the whole industry at present.

2. The channel is too strong

* * What is the channel? Channel is the way to sell, please note that this is "sell" rather than "buy". When consumers have the initiative to buy, channel costs will eventually be squeezed or overturned, but the "sell" business, but will become "channel for the King." But it is a pity that insurance belongs to the latter. "Scene" is the most appropriate word to describe the insurance channel borrowed from the Internet domain.

Because the existence of chronic disease 1, people buy insurance, must be passive push type, that is to say, buy insurance must be accompanied by a specific scene: only in the hospital to see birth and death, will be born to buy life insurance health insurance ideas; only at the airport to see the news of the crash, will be the idea of buying air insurance; only in the hope that Taobao sent goods, To buy the idea of return insurance. Scenario theory leads to a strong cost of the channel in premium costs.

For example, air insurance, where everyone in the airport or Ctrip to buy more than 90% of the air insurance is the channel costs. At the same time, in order to sell the insurance products, insurance companies have to hire 2.5 million of agents everywhere, well-meaning marketing products, these costs eventually have to be amortized to the premium. Even if the insurance company develops to today, the channel's strength makes the organization structure also around the channel establishment, this causes the traditional insurance company to subvert the channel to be extremely difficult.

But this is in fact the insurance industry has been helpless paradox. You can not at the airport to buy expensive cruise insurance, but not at the airport who will think of the purchase of aviation insurance? In recent days there are a lot of internet insurance startups to overturn insurance, subversive insurance channel slogans, from the principle that this is in line with the spirit of the Internet, said the truth; but here the insurance company is half wronged, because it is not entirely the fault of the insurance company. In fact, there is an interesting deduction, when these internet insurance companies really monopolized the traffic, they will also become a channel themselves? This is like an early start of the tourism portal, cheap insurance seems to be a customer and value-added services, but one day if the real become ctrip and where to go, the cost of this channel or not to earn?

3. Serious product homogeneity

Note that there is a serious homogeneity, but not a lack of products. In fact, China's insurance industry has never been short of insurance products category (even a lot of strange kinds of insurance can be, also only in China was invented, the CIRC does not encourage, here also do not elaborate on it), opened almost an insurance company's products, there are hundreds of thousands of categories, and the problem is that most people, including many insurance practitioners , can not understand these products, also can not pick out exactly suitable for consumer demand products, not many, but also a lot.

This can not really blame insurance companies, in fact, a considerable part of the consumer is the insurance as a financial products to see, this is why China from the risk of planting, more than 80% of the types of insurance are dividend risk, the traditional protection type of less than 10%. Insurance companies also have to sell premiums to survive, which forces the insurance companies to make a choice to recommend the financial properties of insurance. However, in recent years this has changed greatly, everywhere can hear the "insurance return to protect the origin" of the reflection.

Another aspect of homogenization is the regulation of tariffs. Take insurance as an example, in China, different kinds of people to open the same car, the premium is the same, different insurance companies to sell the product price is roughly the same. Therefore, we can only try to grasp the channels, provide value-added services to get customers, staying, and then forced the insurance companies have become sales companies, service companies. Therefore, consumers, insurance companies, regulatory authorities have become intertwined in today's Chinese insurance products complex situation.

4. The comprehensive quality of the practitioners is not high

In the West, especially in the United States, insurance salesmen are big businesses. Because the United States is engaged in comprehensive sales, and insurance is a personal financial investment assets in the important and complex links, so only high-end financial talent can from the perspective of the portfolio for consumers to provide tailor-made comprehensive product promotion, which is why the U.S. insurance sales staff are college students, but also outstanding students. But China seems quite the opposite. I do not know when to start, selling insurance seems to be a derogatory word.

And indeed, objectively speaking, most of the current market insurance agents are aunt. Aunt Selling insurance is nothing, but the problem in China there is an old saying, "Birds of a feather flock together." So according to this theory, the person who is sold by the aunt is also an aunt generally ... What is the so-called insurance-conscious white-collar, gold collar, whose insurance is to be sold?

This has led to an interesting situation in the Chinese insurance market, where insurance-conscious people find it as if they don't know where to buy insurance; But in recent years also Western learning East gradually, the domestic big insurance companies are aware of this problem, began to test water high-end insurance sales team, here do not repeat. This also objectively gives Internet insurance a possible opportunity.

The four challenges facing internet insurance

The opening actually points to one question: the Internet + pattern emerges endlessly, why the Internet insurance has been tepid. With the I bedding, Part II can answer this question. It is not tepid, but every time the fire is extinguished, to failure, and at least three waves. So here's the big four challenges of why Internet insurance doesn't work.

1. Non-standardized insurance

A big reason why Peer-to-peer can erupt is the standardization of credit/wealth management products. For investors, the vast majority of people are concerned only with the return and duration of the product, but not the peer-to-peer and the baby's investment target. Theoretically, risks and benefits are always proportional, so the principle of peer-to-peer product pricing should contain risk valuation (as for the current domestic Peer-to-peer platform is the right price of the risk this is another problem), and only standardized products for internet sales.

But insurance is not the same, insurance is non-standard. In particular, life insurance products, when consumers face a few pages or dozens of of pages of product specifications, no one dares to say that can fully understand. This leads to a fundamental feature of insurance: the non-standard nature of life insurance products leads to an important role for people, and consumers actually buy only two of trigger points-either "scene" or "trust". This is why several Internet insurance attempts, we found that directly online selling traditional life insurance products is not feasible, so there is the middle line-either sell the insurance (air, car, etc.), or the agent moved to the line. Is there a suitable life insurance product on the Internet? This is something.

2. The "scene" issue of Insurance

This point is already described in the previous article. But here is the second challenge of Internet insurance. The insurance scene is extensive, both offline and wired-hospitals, airports, kindergartens, electric dealers ... Online scene can become an Internet insurance endogenous channel, but offline? Since the insurance product is the human nature, the scene under the line can certainly move to the line?

3. Insurance Internet can not be separated from the insurance company

Same reference Peer-to-peer. Peer-to-peer can erupt in fact there is a key point, often overlooked, is peer-to-peer and the relationship between the bank. Both sides of the peer-to-peer, whether the target or investors, in essence, can be separated from the bank. The immediate benefit of leaving the bank is to get rid of the regulation so that it can grow savagely, because financial regulation is inherently risky, which is why there are 2000 of Peer-to-peer in 1 years. and insurance is not. Insurance products sold OUT is only the first step.

There are underwriting, compensation, investment and so on a lot of follow-up work, all these are inseparable from insurance insurance companies; more important, according to the current regulation, as long as the collection of premiums, then the premium must be placed under the insurance company licence. This means that the Internet insurance from endogenous will not be able to get rid of the claws of insurance companies, must be associated with insurance companies. The sword with financial supervision is suspended, and insurance is the most cautious of the risk of the sabre, which emphasizes subversion and emancipation of the internet thinking itself is left. Unless you become a pure Internet insurance company, the Internet is not easy, this is something.

4. Adverse selection of insurance

To explain this problem, to say that insurance money is an important essence. The most original form of insurance is the probability of money, that is, the so-called death difference, then the so-called spreads and fees. That is to say, the insured group must be large enough to meet the law of large numbers, so that the people who do not have an accident to supply the accident and insurance company.

From an evil point of view, insurance favorite group, should be those who passively persuaded by the alarmist group, because they chuxian probability is not high; and the most dislike of the group must be those who actively want to buy insurance, generally not all day travel fly people who would take the initiative to buy air insurance? So here it is. Another important paradox of Internet insurance: The Internet channel skipped people to do the intermediary, means that consumers must be active purchase, and the active purchase of the group is likely to be Chuxian high probability, and the probability of a high percentage of the group is likely to make money. So the implicit directional group of Internet insurance is probably not the group that makes money.

Iii. the seven trends of Internet insurance

Although the insurance industry has its own ills, although the Internet insurance has to avoid the challenge, but the continuous evolution of the business model of the pace we believe that must be irreversible, although this evolution is bound to spiral winding up. According to the evolution path of Internet finance, the author thinks that internet insurance may evolve according to the three steps of channel innovation-product innovation-mode innovation, but because consumers have been excessively educated by internet finance, the pace of these three steps will be much more compact. The future has come. At the current point of view, we may be able to see the seven development directions of Internet insurance, some early, some late, some subversive, some micro-innovation.

1. Split and refinement of the insurance value chain

The current insurance companies from the customer, underwriting, claims, investment-take-all. But in theory, in fact, customers, claims, investment may be subdivided players. The irreplaceable part of the insurance company is the bearing carrier of the balance sheet. Therefore, insurance companies are not necessarily product development, customer, claims, investment, the strongest player, at least not the only player. So the future does not exclude the entire insurance value chain will appear split and subdivision. This has been a trend in the United States. Google and Amazon have gradually taken on the channel and marketing intelligence, while risk management and claims have emerged from the new players (Verisk, guidewired, etc.) that are not insurance companies.

2. Actuarial pricing based on large data and artificial intelligence

As a financial institution, the most central part of insurance is the pricing of risk. At present, the pricing of insurance products is based on the traditional pricing theory and model (the current pricing of many products in China's life insurance is still based on the death table established in the last century). With the development of large data and artificial intelligence, it is believed that there will be a subversive change in insurance pricing, which is more accurate, self-learning and dynamic pricing for all kinds of risks. On the nature of insurance, death is the core of Chivalry's insurance profit model. So who can more accurately price the risk, who can make more.

But technological progress has always been a double-edged sword. There is a dispute in the insurance industry over the precise pricing of large data for risk. Simply put, the insurance is to large number of rules to turn up, that is, always to the chuxian probability of high and low people together, in order to make a large number of money. Assuming that the future of large data development to the extreme, can be precise definition of each individual's risk of differentiation, that insurance is the last to make money? There is no discussion here.

3. Customized pricing based on individual

Around insurance products, as mentioned above, the current market for the basic similar products are priced similar (for example, in the case of car insurance). With the deepening of the 2nd, there will inevitably be differentiated pricing, differentiated products so that differentiated division of labor. For example, VC 30-year-old female driving a red sports car, insurance company A may be 100 yuan, but in the insurance company B may only have 50 yuan. In other words, with the rate of marketization, the future will be products and the crowd will certainly appear professional subdivision of the insurance company.

4. Remote information acquisition, processing and pricing system based on cloud + END

Taking the car insurance as an example, through the innovative vehicle networking technology, the condition, the road condition, the driver's habit can be captured and analyzed in real time, and then the more accurate pricing and the quicker and more efficient survey and determination loss are obtained. Taking life insurance as an example, combined with wearable equipment, the user's physical signs can be collected more accurately, then the recommendation of diet and behavior is realized, and the pricing of premiums is achieved. In fact, there are already some insurance and life insurance companies have begun to try this.

5. Seamless digitization in the background and large data of the transformation

The inevitable trend of internal transformation and change of insurance company. Most of China's traditional insurance companies in the background management and the analysis of their own data processing is still mainly manual, static, the degree of automation still further improve the space. Therefore, the innovative and easy-to-use digital means to serve the insurance company is still promising.

6. Coverage based on Internet scenarios

As previously stated, insurance sales must accompany the scene. Traditional insurance products are associated with traditional offline scenes. With the continuous popularization of the Internet, no matter in the product, the demand, the customer group and so on has appeared the new "the online scene", for instance fictitious life and the fictitious asset, the simple and clear special ailing insurance, is suitable the family group characteristic the bundle insurance, compensates to pay flexibly (the day pays monthly) The accident insurance and so on.

These kinds of insurance are largely accompanied by the fast demand of internet phenomenon. But the traditional insurance company in the product development, the report prepares the big ship to be difficult to turn around, is difficult to satisfy this rapid innovation, the rapid iterative request, this objectively gives the start-up Internet insurance Company window and the opportunity. But in the long run, the involvement of the industry and the internet giants is bound to make this area more fierce competition.

7. Construction of the pure "Internet insurance" form

Now the Chinese insurance industry channel is too strong, resulting in products, organizational structure must be built around the channel. That makes it hard for traditional insurers to really do internet insurance – they can't reshape an insurance company from an organisational level. So subversive insurance companies can only be pushed back.

The original essence of insurance is mutual assistance (such as the Western mutual in the United States, Lloyd of Britain is the essence of mutual aid), and the internet is the most likely carrier of mutual assistance (making geographical and time gathering possible). Therefore, from a real subversive point of view, "mutual insurance" is likely to appear in the future of the real public, the pure form of Internet insurance: The same needs, the interests of the group of funds into a unified mutual pool, Chuxian later from the pool, do not Chuxian will be divided into mutual help. The real and the public, the use of the public, risk sharing, benefits share. Because everyone's needs, the same interests (similar people), risk pricing will be homogeneous, and more important is the real elimination of channels, significantly reduce costs.

Mutual aid is the source of insurance, so it is not impossible. and from the regulatory level, for this form is also prescient, a few days ago issued the "Mutual Insurance Organization supervision trial measures", clear attitude, but also raised the threshold.

Iv. The greatest paradox of Internet insurance

The author makes some of the biggest paradox of internet insurance. So what is the biggest paradox of internet insurance? Internet insurance is the biggest paradox, in fact, Internet insurance, in the end is the Internet, or insurance. It is hard to answer the question, at least without a definitive answer. After a whole year's hustle and bustle, the author's conclusion is that peer-to-peer originates from the internet but returns to the essence of finance. Is that the same with Internet insurance?

The internet as a new business model itself has great subversion. One of the biggest subversion of the Internet may be the magical theory of valuing in so-called "imaginary space" – according to this magical theory, the valuations of Internet-element companies are not based on profitability, but on the number of users imaginable and the amount of data they can imagine.

Under such a theory, the most depressing thing is the traditional industries with huge numbers of subscribers and data, such as telecoms, banking and insurance. Take the bank as an example, it has a huge number of users and data, it big data, credit more than enough, but who call it the traditional financial industry? It can only be valued at less than 1 PB in previous years. This is why many Internet companies are unwilling to get into financial and financial relationships.

In the same vein, what about Internet insurance? If from the angle of insurance, the appraisal of the capital market is based on the intension value, this is why the insurance company must want to make the long-term life insurance product. According to this, the current market of emerging Internet innovation insurance, in fact, the connotation value is not high. But from the internet point of view, it is another story.

Low-value insurance, or even free insurance, has become an ingenious means of getting passengers, and it is true that the cost of high pay may be cheaper than the rising cost of the flow. Following this logic, the next step is to expect these "users" to be able to buy high-value insurance products. Of course, whether this step can be achieved is not yet known.

So consider this issue to the reader, but also hope that everyone to express their views!

Note: The author of this article is Lin Tao, a partner of Fosun Brothers Capital.

(Responsible editor: Mengyishan)