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The current reality is that costs of suffering cyberattacks continue to climb while the ability to insure against a possible cyber disaster diminishes. The cyber insurance gap is widening, with many businesses either uninsured or underinsured against a rising tide of cyber threats. A typical data breach could cost the average organization $2.4 million for […]
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Be it the Ever Given episode in the Suez Canal or the 100+ ships waiting off LA/Long Beach or fears that the supply chain crisis would perturb Christmas, shipping has seldom been so much in the public eye. Maritime tech has seen unprecedented activity over the past year, with a surge in deals. Start-ups […]
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Insurance business models are beset with high operating costs, opaqueness and information asymmetry. With the advent of Web3, smart contracts, and decentralized autonomous organizations (DAOs), newer ways of transferring risk are coming to market. The use of blockchain technology within insurance is proving to reduce costs and improve end-user experience. This final part, a continuation […]
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The Theme last week was about Online Insurance Marketplace.
The Theme this week, is about emerging markets. Emerging markets are about hopes, potentials and future growth. When a market grows huge enough, it could evolve into something better.
For more about the Front Page Weekly CXO Briefing, please click here.
Incumbents embracing InsurTech is a common theme in our posts. This time, it’s about customer engagement.
Story 1: Global reinsurance giant drops “emerging market” label for China
Extract, read more on Asia Insurance Review:
“Global reinsurer Swiss Re no longer places China as an emerging market, but instead views the country as a important strategic market, according to Mr John Chen, head of Reinsurance China and China country president for Swiss Re.”
What is an emerging market? According to Wiki, an emerging market is a country that has some characteristics of a developed market, but does not satisfy standards to be termed a developed market. And according to Insurance Information Institute, China’s insurance market by annual premiums has been top 2. It’s safe to say China was huge enough to graduate from the identity of emerging market.
Story 2: Allianz launches reinsurance business in India
Extract, read more on Verdict:
“Allianz Global Corporate & Specialty (AGCS), part of German insurance group Allianz, has set up reinsurance operations in India after securing regulatory nod.
The new reinsurance branch will be located in Mumbai. It will provide facultative, proportional, and non-proportional reinsurance solutions for property, liability, marine, financial lines, construction and engineering, as well as energy.”
India, despite of the biggest population, is more like an emerging market than China. According to IRDA, India’s premium income in 2017 is 98 million USD which can’t make top 10 worldwide. But the population is in place, therefore the potential.
Story 3: Allianz to Enter Vietnam Insurance Market via Joint Venture with IT Firm FPT Group
Extract, read more on Insurance Journal:
“Allianz announces its intention to enter the general insurance sector in Vietnam through a digital joint venture (JV) to be set up with the FPT Group – driving long-term success in the market and expanding Allianz’s footprint in Asia.
FPT Group, as the strategic technology partner, will support Allianz in the fast-growing Vietnamese insurance market to develop innovative digital insurance products and services to meet the protection needs of local customers.”
Vietnam is one of the most promising emerging market in the world as it is likely to become a next world factory after China. Insurance, as a financial infrastructure, is an attractive treat for top insurers like Allianz.
Since the developed markets have a sophisticated operating system for insurance. Gaining old policyholders’ attention can be intense. The emerging market is a great new battlefield for international insurance superpowers. I think we will see more and more top insurers tapping into emerging countries in the years ahead.
Zarc Gin is an analyst for Warp Speed Fintech, a Fintech, especially InsurTech-focused Venture Capital based in China.
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The Theme last week was Artificial Intelligence trends.
The Theme this week is China opening up its insurance market. This is actually a gradual process and now we are witnessing an upgrade from joint ventures to the approval of fully independent foreign insurers in China.
For more about the Front Page Weekly CXO Briefing, please click here.
Editors Note: Insurtech is normally Thursday. We changed to Wednesday this week because this news is big.
For this week we bring you three stories illustrating the theme of China opening up its insurance market.
Extract, read more on AXA press release:
“AXA announced today that it had entered into an agreement with the current domestic shareholders of AXA Tianping Property & Casualty Insurance Company Ltd (“AXA Tianping”) to acquire the remaining 50% stake* of the company.
Total consideration for the acquisition of the 50% stake would amount to RMB 4.6 billion (or Euro 584 million*), representing an implied 2.4x FY17 BV* multiple, of which, subject to regulatory approvals, RMB 1.5 billion (or Euro 190 million*) should be financed through a capital reduction of AXA Tianping to buy back shares from the current domestic shareholders.”
AXA Tianping was jointly founded in 2004 by AXA’s subsidiary in China and Tianping Auto Insurance. After 14 years, it has become the biggest foreign property insurance company in China. This purchase, if approved by Chinese regulators, will make AXA Tianping a fully-owned subsidiary of AXA group and help AXA move further in Chinese market.
Story 2: Allianz China unit given regulatory go-ahead
Extract, read more on Reinsurance News:
“Insurance giant Allianz has received approval from the China Banking and Insurance Regulatory Commission for the preparatory establishment of an insurance holding company in China.
Based in Shanghai, Allianz (China) Insurance Holding Company Limited will be the country’s first ever insurance company wholly owned by a foreign insurer.”
This happened a day before the AXA news. But Allianz’s plan was approved by the regulator already. The approach is different, since AXA is achieving it through equity acquisition while Allianz is starting from scratch. But the goal is same, to make presence in Chinese market.
Story 3: China moves closer to allowing foreigners to control insurance ventures
Extract, read more on Reuters:
“China will accept applications early next year from foreign insurers seeking to take control of their local joint ventures and is even weighing giving them full ownership earlier than flagged, people with direct knowledge of the matter said.
The regulator is expected to publish its final guidelines as soon as the first quarter of 2019 and would begin taking applications from interested foreign insurers soon after that, they said”
This article was released last Monday, and certainly it’s a signal. Our first two news proved that things are moving much faster in China.
China has already drawn its roadmap of opening up for the financial sector. Insurance industry is obviously executing the plans with efficiency and determination. I believe there are still huge potentials in Chinese insurance market and the future of insurance market in China will be shaped by Chinese and foreign insurers together.
Zarc Gin is an analyst for Warp Speed Fintech, a Fintech, especially InsurTech-focused Venture Capital based in China.
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