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  • user 12:18 am on April 29, 2017 Permalink | Reply
    Tags: , InsurTech,   

    Next Up in Insurtech: the Gig Economy 

    The Ubers and TaskRabbits of the world fueled the creation of a whole new layer of the labor market, which now spans across (arguably) every imaginable industry. Just like with every new industry, the gig is now in need of products and services, designed specifically for its unique market. Finance and insurance products, are, of course, [&;]
    Bank Innovation

  • user 5:49 pm on April 28, 2017 Permalink | Reply
    Tags: InsurTech, , ,   

    Let’s do it…if you trust on InsurTech 

    I had shared my bold view on since a while and I’m currently doubling down on my beliefs

    It is not a secret that I’m an insurtech enthusiastic: I have shared my view about the need for any insurance player (insurer, reinsurer, distributors, etc.) to become an insurtech-player during the next several years. This will mean: organizations where will prevail as the key enabler for the achievement of the strategic goals.

    It was only 12 months ago when I published my four Ps to assess the potential of each insurtech initiative. My approach is based on four axes related to the fundamentals of the insurance business:

    1.      Productivity: Impact on client acquisition, cross-selling or additional fee collection for services;

    2.      Proximity: What an insurtech approach can do to enlarge the relationship frequency, by creating numerous touch-points during the customer journey — a proven way to increase the customer’s satisfaction;

    3.      Profitability: What can be done to improve the loss ratio or cut costs without an increase in volumes;

    4.      Persistence: Increasing the renewal rate, and, thus, stabilizing the insurance portfolio.

    InsurTech will make the insurance sector stronger so more able to protect people [ Click to Tweet]

    The insurtech ecosystem has shown terrific growth in the last 20 months, after many VCs complained about the absence of insurtech startups. The updated Venture Scanner’s map shows more than 1,000 initiatives, with more than $17.5 billion invested. The needs for a pragmatic approach, the ability to prioritize the initiatives and a stronger focus on innovation have become more and more relevant.

    I strongly believe in the effectiveness of the aforementioned four axes to evaluate a business. In the last few months, I followed this view to make and career choices.

    At the beginning of the year, I invested in Neosurance, an insurtech currently accelerated by Plug & Play in Silicon Valley, and I’m supporting the company as a strategic adviser. This company developed a platform to enable incumbents to sell the right product with the right message at the right time to the right person. By using artificial intelligence, Neosurance aims to become a virtual insurance agent with the ability to learn and improve how it sells. I fell in love with its model because of its productivity angle, the first of the four Ps.

    Let’s consider all the non-compulsory insurance coverages. The large part of the purchases have been — and still are — centered on a salesman’s ability to stimulate awareness and to show a solution. In a world that is getting increasingly more digital and is becoming less about human interaction, I’m skeptical about the ability to cover the people’s risks with the current approaches of online distribution, comparison websites and on-demand apps. All three of these approaches require a rational act and a lot of attention. But many customers look like more to Homer Simpson than to Mr. Spock.

    Those are the reasons I’m optimistic about Neosurance’s business model. On one hand, its B2B2C model aims to be present where and when it matters most for the customer. And, its “push” approach is able to preserve underwriting discipline, which is the only way to continue in the middle term and distribute a product that keeps a promise to the customers. My investment choice was based on the business model evaluation, the company’s pipeline and the quality of its team. I hope to be able to make more investments.

    I also decided it was time for a job change at the end of 2016. After 11 years, I left my career with Bain & Company, where I advised the main insurers and reinsurers on the European market. I had focused my activity on the single insurtech trend I’m passionate about: connected insurance. In the last several years, I have advised more than 50 players on this topic — from insurers to reinsurers and from service providers to investors. I consider the use of sensors for collecting data on the state of an insurable risk and the use of telematics for remote management of the data collected to be a new insurance paradigm. For years, many of the use cases we have seen globally have only somewhat used the potential of this technology to support an insurer and achieve his or her strategic goals.

    My belief could be well understood by observing the best practices of auto insurance telematics and their performance regarding the other three Ps:

    • Let’s start with the proximity angle. Insurers have provided telematics-based services that have reinvented a driver’s journey. More and more players are focusing on this opportunity to create an ecosystem of partners to deliver their suite of services. Discovery Insure is one of the best at doing this because it is able to reward clients with a free coffee or smoothie for each 100 kilometers they drive without speeding or braking hard. Is there a way for you to be closer to your client?
    • The Italian market shows the potential benefits in terms of persistency. There are more than 6.5 million cars with a device connected to an insurance provider in Italy, and the telematics penetration reached 19% in the last three months of 2016. On average, the churn rate on the insurance telematics portfolio is just 11%, which is lower than the 14% churn rate on the non-telematics portfolio.
    • Last — but definitely not least — is the profitability side. The Italian telematics portfolio shows a claims frequency that, risk-adjusted, was 20% lower in comparison with the non-telematics portfolio, as I mentioned in a paper last year. The best practices were able to achieve an additional 7% average claims cost reduction by acting as soon as a claim happened and by reconstructing the claims dynamic. These savings let insurers provide an up-front discount to the clients. This makes the product attractive and achieves higher profitability.

    My day job is now to run an international think tank focused on connected insurance. More than 25 companies have joined the European chapter since the beginning of the year, and eight players have joined the North American chapter since March. This initiative is developing the most specialized knowledge on insurance IoT, which is based on a multi-client research. I personally deliver the contents through one-to-one workshops dedicated to each member. Throughout the rest of the year, I will host plenary meetings with all the players to discuss this innovation opportunity.

    I felt honored and privileged last spring when former Iowa insurance commissioner Nick Gerhart invited me to present my 4 Ps at the Global Insurance Symposium 2017 in Des Moines, but I did not realize how this framework would so deeply influence my life decisions.

    It is definitely an interesting time to be in the insurance sector.

    [linkedinbadge URL=”https://www.linkedin.com/in/matteocarbone” connections=”off” mode=”icon” liname=”Matteo Carbone”]  is Insurtech Thought Leader, Keynote speaker and writer on insurance innovation

  • user 12:18 am on April 15, 2017 Permalink | Reply
    Tags: , , InsurTech, , ,   

    5 Insurtech Startups to Watch (That Aren’t Lemonade) 

    The land of traditional insurance is getting an upgrade. 2017 might be the year the insurance industry (which tends to conjure up images of cramped cubicles, multiplying paperwork, and incomprehensible legalese) gets the touch; in fact, we’ve already seen the beginnings of the change with certain named after certain citrus beverages. Want to [&;]
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  • user 12:18 pm on April 2, 2017 Permalink | Reply
    Tags: , , InsurTech,   

    The Future of InsurTech? AI and the IoT, Says Accenture 

    The number of firms with a focus on big data, artificial intelligence, and the Internet of Things has skyrocketed in recent years, with those firms attracting nearly half of the total funding spent globally on insurtech. According to a report by , there are about 70 insurance startups focusing on big data now, up from [&;]
    Bank Innovation

  • user 7:36 pm on November 16, 2016 Permalink | Reply
    Tags: , digital transformation, future of insurance, InsurTech, matteo carbone,   

    The future of insurance is Insurtech 


    The insurance sector has entered a phase of profound transformation. Numerous startups—around 1,000 according to Venture Scanner map—have popped up to challenge the traditional model by generating more than 16 billion dollars in the last year from insurance companies.

    I believe that we will see a completely changed insurance sector in the medium term. But I consider it a joke for an industry conference to show a picture of a newborn and sell it as the last intermediary or the last client to have purchased an insurance policy. I’m convinced that insurance companies will still be relevant in the future, or will become even more relevant than they are now, but these companies will have to be insurtechs, or players who use as the main enablers for reaching their own strategic objectives.

    The reach of this goes way beyond the elimination of “the middle man” and interpretations from a distribution point of view. The direct digital channel dominates very few markets and deals only with compulsory insurance. Whereas in the vast majority of markets, a multichannel oriented customer continues—with variations from country to country—to choose at least at some point of the customer journey to interact with an intermediary. The amplitude of the digital transformation happening in the insurance industry is widespread and encompasses all of the phases of the insurance value chain, from underwriting to claims.

    Any insurance will be InsurTech

    Every insurance sector player—whether it’s a reinsurer, a carrier or an intermediary—ought to pose this question: How should the insurance value chain be reshaped by using the new technologies at hand? There are numerous relevant technologies that come to mind, including: the cloud, the Internet of Things (IoT), big data and advanced analytics, quantum computing, artificial intelligence, autonomous agents, drones, , virtual reality, self-driving cars.


    In order to take full advantage of these technologies, there has to be a structured approach that begins with identifying use cases that can have an actual contribution to reaching strategic business goals, then takes these use cases and applies them in such a way to maximize the effects inside the insurance value chain of each player. Finally, it should look at the software/hardware selection or the “make vs. buy” choices. The essential idea is that there is no such thing as “one size fits all.” Each player needs to create customized use cases based on their individual strategy and characteristics.

    To date there are several types of approaches to mapping insurtech initiatives. I have developed my own classification framework based on six macro areas (Awareness, Choice, Purchase, Usage, IoT and peer-to-peer (P2P)). Insurance IoT, also known as connected insurance, represents one of the most relevant and mature insurtech trends.

    Connected Insurance represents a new paradigm for the insurance business, an approach that fits with the mainstream Gen C, where “C” means connectivity. This novel insurance approach is based on the use of sensors that collect and send data related to the status of an insured risk and on data usage along the insurance value chain. During the first edition of the Connected Insurance Observatory since January 2016, participants had the opportunity to learn what the results in the auto sector are and about some of the first uses of this approach in the other business lines.


    Connected insurance: the insurance policy for the Gen C


    Auto telematics represents the most mature insurtech use case, as it has already passed the test and experimentation phase within the innovation unit. It is currently being used an instrument for daily work within motor insurance business units. In this domain, Italy is an international best practice example: Here you can find at the end of 2015 half of the 10 million connected cars in the world have a telematics insurance policy. According to the SSI’s survey for the Connected Insurance Observatory, more than 70% of Italians show a positive attitude toward motor telematics insurance solutions.  According to the Istituto per la Vigilanza sulle Assicurazioni (IVASS), about 26 different insurance companies present in Italy are selling the product, with a 16% penetration rate out of all privately owned insured automobiles in the second quarter of 2016. Based on information presented by the Connected Insurance Observatory — a think-tank I created in partnership with Ania that brings together more than 30 European insurer and re-insurer groups — the Italian market will surpass 6 million telematics policies by the end of the year.


    Based on this data, we can identified three main benefits connected insurance provides to the insurance sector:

    1. Frequency of interaction, enhancing proximity and interaction frequency with the customer while creating new customer experiences and offering additional services
    2. Bolstering the bottom line, improving insurance profit and loss through specialization,
    3. Knowledge creation and consolidating knowledge about the risks and the customer base


    The insurance companies that are part of the Observatory are adopting this new connected insurance paradigm for other insurance personal lines. The sum of insurance approaches based on IoT represents an extraordinary opportunity for getting the insurance sector to connect with its clients and their risks. The insurers can gradually assume a new and proactive role when dealing with their clients—from liquidation to prevention.

    It’s possible to envision an adoption track of this innovation by the other business lines that are very similar to that of auto telematics, which would include:

    • An initial incubation phase when the first pilots are being put into action in order to identify use cases that are coherent with business goals;
    • A second exploratory phase that will see the first rollout by the pioneering insurance companies alongside a progressive expansion of the testing to include other players with a “me, too” approach;
    • A learning phase in which the approach is adopted by many insurers (with low penetration on volumes) but some players start to fully achieve the potential by using a customized approach and pushing the product commercially (increasing penetration on volumes);
    • Finally, the growth phase, where the solution is already diffused and all players give it a major commercial push.

    After having passed through all the previous steps in a period spanning almost 15 years, the Italian auto telematics market is currently entering this growth phase. The telematics experience teaches us three key lessons regarding the insurance sector:

    • Transformation does not happen overnight. Telematics—before becoming a relevant and pervasive phenomenon within the strategy of some of the big Italian companies—needed years of experimentation, followed by a “me, too” approach from competitors and several different use cases to reach the current status of adoption growth.
    • The companies can be protagonists of this transformation. By adding services based on black box data, telematics has allowed for improvements in the insurance value chain. Recent international studies show how this trend of insurance policies integrated with service platforms is being requested by clients. It also shows that companies, thanks to their trustworthy images, are considered credible entities in the eyes of the clients and, thus, valid to players who can provide these services.
    • If insurance companies do not take advantage of this opportunity, some other player will. For example, Metromile is an insurtech startup and a digital distributor that has created a telematics auto insurance policy with an insurance company that played the role of underwriter. After having gathered nearly $200 million dollars in funding, Metromile is now buying Mosaic Insurance and is officially the first insurtech startup to buy a traditional insurance company. This supports to the forecast about “software is eating the world”— even in the insurance sector.

    [linkedinbadge URL=”https://www.linkedin.com/in/matteocarbone” connections=”off” mode=”icon” liname=”“] is Principal at Bain & Company

  • user 11:35 pm on October 28, 2016 Permalink | Reply
    Tags: , InsurTech,   

    INSURTECH – You will never insure – or be insured – the same again! 

    In the startup world, is currently one of the most dynamic and exciting sectors: more than $2,6bn were invested in the industry last year, three times the amount invested the year prior. Corporate insurers such as Axa, Allianz, AIG or Aviva are creating in-house funds to identify the most promising innovation in the field. The landscape is fast evolving, with the shared economy practices turning the industry upside down: thus, unicorns like Blablacar or Airbnb push traditional actors to develop new insurance models that go beyond transportation and housing, and draw from IoT, big data, or gamification to transform the insurance industry overall.

    An entire book would not be enough to capture all insurtech innovations, so let’s focus on three transforming trends in the industry and their impact on traditional insurers.

    Don’t speak about insurtech, speak about insurtechS!

    Traditional insurance used to be applied to a few sectors, with a few bundle products, but times have changed! The industry is now facing several levels of segmentations:

    • first, a segmentation in model, with an increased separation between product ownership and product consumption as a result of the shared economy. You no longer use a car that is yours but one you have borrowed to someone – so who should pays the insurance?;
    • second, a segmentation in application, with insurtech going beyond the traditional insurance products applied to transportation or housing, to now comprise new wearables or peer-to-peer practices;
    • third, a segmentation in , with insurtech start-ups choosing specific verticals such as data analytics, claim acceleration tools or customer engagement to support more traditional insurance activities.

    These segmentations mean traditional insurance actors are faced with new challenges to respond to new consumptions habits, as well as new business opportunities, for instance responding to specific needs.

    Mastering personalised insurance

    Not only have consumers changed their habits, but they are also increasingly asking for personalized services: less and less people are willing to pay bundles, and would rather get personalized coverage. Whilst before, insurers relied on market trends to develop new insurance products, they now need to be more lean and creative in their packages.

    Failure to satisfy increasingly demanding and selective consumers would result in losing clients, but traditional actors have in fact been very good at embracing insurance curation: they are making the most of new health tracking devices to provide premiums to fit customers, or offering discounted auto insurance for customers using telematics devices to track safe driving. All-in-one policies are also starting to emerge, thanks to highly personalised digital risk assessment.

    For corporate insurers, insurtech is a way to climb the food chain

    The emphasis put by traditional insurers on insurtech is easily justified: from data analytics and lifestyle apps allowing client service personalisation, to hardware supporting preventive action rather than corrective ones (to detect fire for instance), the added-value of insurtech is immense. Information security systems or digital processing are further revolutionizing customer service, making insurance/client relations more seamless.

    Insurtech ultimately gives incumbents the opportunity to get directly exposed to the client rather than go through intermediary brokers, making coverage more affordable for consumers and more profitable for the providers. As such, corporate actors and insurtech startups should not see each other as competitors, but rather as complementary actors. In fact, no insurtech today is directly challenging an insurance company like Monzo or Starling Bank do with traditional , and for insurtech, the path to customer acquisition is more so than not likely to go past corporate insurers.

    Increased synergies between insurtech and corporate insurers are likely to be beneficial to both parties. Other than the traditional challenges related to regulation and barrier to entry, the main test for insurtech and insurance companies will come from the consumers’ reaction: if the personalisation of services can be beneficial operationally, it also comes at high cost, that of privacy. Traditional insurers and insurtech companies will therefore have to work together to guarantee that their customers’ data is collected and managed in a secure and safe way. And for that cybersecurity startups may have some answers.

    [linkedinbadge URL=”https://www.linkedin.com/in/antoine-baschiera-85aa033a” connections=”off” mode=”icon” liname=”Antoine Baschiera”] is CEO at Early Metrics

  • user 8:55 am on October 22, 2016 Permalink | Reply
    Tags: dentists, , , , InsurTech, , ,   

    Health Insurance InsurTech innovation may start with dentists and a P2P network of providers 

    Image source Aforacare does not present like a tech startup. There is no Crunchbase profile with lists of rounds by VCs. Nor do we read about any of the hot technologies that are like catnip for investors. Yet, if you look at Aforacare with fresh eyes, you may see theRead More
    Bank Innovation

  • user 3:36 pm on October 17, 2016 Permalink | Reply
    Tags: , InsurTech, , ,   

    Top 5 Insurtech Startups in Switzerland 

    , a burgeoning phenomenon, promises to disrupt the insurance industry by leveraging to provide greater efficiency, more flexibility and cheaper prices to consumers.

    The insurtech industry is growing steadily with over 900 companies across 14 categories from 53 countries, according to a report by Venture Scanner. These ventures have raised over US$ 16.5 billion in funding as of January 2016.

    Insurtech landscape

    via Venture Scanner

    VC investment into insurtech is on the rise. According to the Wall Street Journal, VCs injected US$ 167 million in the sector in the third quarter.

    Rodolfo Gonzalez, a partner at Foundation Capital, told the media outlet that &;over the past 18 months or so the number of startup founders interested in the insurance space has grown dramatically.&;

    Insurtech applications cover everything from offering automotive, health and travel and employee benefits insurance products, to peer-to-peer insurance platforms, data and intelligence solutions, but also comparison platforms, marketplaces, as well as infrastructure and backend for enterprises.

    The US currently hosts some of the world&;s leading insurtech . This includes Metromile, an automotive insurance provider that offers pay-as-you-drive coverage, and Oscar, a non-employee health insurance provider.

    Metromile utilizes an on-board diagnostics (OBD) device to wirelessly send driving data to measure the specific actions of individual clients, as well as mobile technology to collect data points and offer additional services to clients. Metromile has raised over US$ 205 million in funding so far.

    Oscar aims at revolutionizing insurance through data, technology and design. Oscar provides each client with a branded personal fitness device that collects data such as sleep time, which it delivers to healthcare providers, streamlining and optimizing the caregiving process. Oscar has raised over US$ 727 million in funding and serves over 145,000 customers.

    In Europe, notable insurtech startups include Clark, an insurance broker which sells insurance products from more than 160 providers in Germany, and GetSafe, another German venture providing a digital insurance manager on mobile.

    &8217;s insurtech industry remains quite small when being compared with the likes of the US, the UK or Germany. Nevertheless, the country has a number of notable startups.

    In light of the upcoming Finance 2.0 Insurtech&8217;16 conference, we have listed some of the hottest insurtech startups from Switzerland.

    Finance 2.0 Insurtech&8217;16, which will take place on November 01 in Zurich, will bring together some of the industry&8217;s top thought leaders, experts and entrepreneurs, to discuss the future of the insurance industry, digital disruption and emerging trends.



    Knip - TheFinTech50 - FintechnewsFounded in 2013 by Dennis Just and Christina Kehl, Knip is a mobile insurance manager that collects customers&8217; insurance products in one app, allowing for users to access all their insurance policy documents, tariffs and services in one place.

    The platform also provides automatic analysis of new customers&8217; insurance coverage and sends them recommendations on how they can improve their insurance protection.

    Knip is funded by VCs from the US, Switzerland, Germany and the Netherlands. The startup has raised over US$ 18 million in funding so far.



    smartie.chSelf-proclaimed the &8220;Tripadvisor for insurance business,&8221; Smartie.ch is an online insurance aggregator that allows users to compare insurance products, features and providers.

    Smartie.ch aims at simplifying the buying experience for customers while improving sales for insurance companies.

    Users can also rate and review health and auto insurance products similarly to how Tripadvisor allows users to rate and review hotels and related services.



    anivoBased in Zug, Anivo is the first Swiss online insurance comparison service and an insurance broker that provides personal insurance counseling.

    Founded in 2015 by Alexander Bojer and Werner Flatz, Anivo aims at providing greater transparency in insurance products while offering high quality consulting to consumers.

    In August, the startup announced a new partnership with the Swiss state railway company SBB.. The deal sought to provide railway workers with special rebates on insurance products as well as allow them to benefit from personal advisory by insurance experts of Anivo.



    Top 30 FinTech Startups FinanceFoxFinanceFox is an insurtech startup based in Berlin-Kreuzberg, Zurich and Barcelona. The company provides an digital platform that lets you store all of your insurance policies in one app through which you can also file and manage insurance claims and get personal advice.

    FinanceFox has raised over US$ 33 million in funding so far, among which a US$ 28 million Series A in September led by Target Global and Horizons Ventures. The round was said to be the largest insurtech round in Europe to date. The startup is looking to expand to Austria next, reports Techcrunch.



    VERSICHERIXFounded in 2015, Versicherix was introduced earlier this year as Switzerland&8217;s first peer-to-peer insurance, providing new ways of engaging with customers and offering cheaper and more customer-centric insurance coverage.

    On Versicherix, a group of customers pools their premiums into a group fund, which allows to get the best price performance ratio. Together, the group gets the best coverage for an affordable price.


    The first Finance 2.0 – InsurTech Conference connects the insurance industry with InsureTechs. Motto: Collaboration in facing the digital transformation. On November 01, 2016, leading experts are going to talk about these topics in Zurich, Switzerland.

    finance 2.0 insurtech

    Special Offer: Sign up now with code &8220;-Insur&8221; to get 20% discount

    Win a FREE-pass to attend Insurtech &8217;16 by replying directly to this email with your full name.
    THREE lucky emails will be chosen and announce (via email) as winners on this Thursday, October 20

    Featured Image: Pixabay

    The post Top 5 Insurtech Startups in Switzerland appeared first on Fintech Schweiz Digital Finance News – FintechNewsCH.

    Fintech Schweiz Digital Finance News – FintechNewsCH

  • user 12:19 pm on October 15, 2016 Permalink | Reply
    Tags: , , InsurTech, Metromile,   

    Metromile Big Raise and the InsurTech Hype Cycle 

    Image source  An eon ago in March 2015, we wrote Not that many startups – yet. Since then we have seen an explosion of startups including two very high profile ones – Lemonade and – hitting the headlines in recent weeks. InsurTech is now so hot that aRead More
    Bank Innovation

  • user 11:36 pm on October 8, 2016 Permalink | Reply
    Tags: , , , , , InsurTech,   

    LASIC InsurTech: The Beginning of Alternative Insurance! 

    Many of the successful companies started as social enterprises in emerging markets and scaled successfully to be a unicorn. Notable examples are Ant Financial in and M-PESA in Keyna. Alipay of Ant Financial and M-PESA both exhibit the LASIC (Lee and Teo, 2015) characteristics. Alipay has more than 800m users globally with more than 300m Chinese mobile users and M-PESA accounts is 4 times more than all the traditional bank accounts in aggregate in Kenya. LASIC startups are those with low profit margin business, asset light balance sheet, scalable business, innovative and operate in a compliance light regime. Ant Financial and M-PESA have all the LASIC characteristics.

    When it comes to in China, Zhong An will rank the highest in terms of innovation and valuation given its association with Alipay as a digital (online and mobile) micro insurance provider (Fintech News, 2016). It is not surprising that Zhong An exhibits the LASIC characteristics too. But a new class of LASIC model may be emerging in China. These new insurtech business models originated from the concept of Mutual Aid and started operation in the last two years. In organization theory, the term mutual aid is used to describe a voluntary reciprocal exchange of services and resources for mutual benefits. In America, the fraternity societies existed during the Great Depression providing their members with insurance and benefits for health, life and funeral. In the 1930’s, the English “workers clubs” also provided health insurance. But as early as 18th and 19th centuries, forms of mutual aid oragnisations such as the Friendly Societies and medieval craft guilds provided their members with insurance, funeral expenses, pensions, care for sickness, and even dowries for poor girls. The intellectual abstraction has its roots in mutualism, labour insurance system, trade unions, cooperatives and other civil society movements.

    Typically, mutual aid is a term used to describe a structure or organisation that everyone is free to join and free to participate. The participants in mutual aids groups and all their activities are voluntary. It emphasizes the open and voluntary cooperation as opposed to induced cooperation (Kropotkin, 2008). The idea of mutual aid flourishes in entities that support participatory, democracy, equality of member status and decentralization of decision making at the structure level. Status of the group is determined or conferred mainly by participation. External societal status is irrelevant within the group.

    On the internet, Mutual Aid Platform is seen as a mutual financial assistance and risk sharing platform. It is a class of platforms that members can lower their aid threshold and raise their aid limitation through mutual financial assistance and risk sharing. Members can join a mutual assistance plan with an advance deposit of only RMB10. As a member, one may apply for an aid of up to a maximum of RMB300,000. The maximum deduction from the member’s account for each application is RMB3. The more members there are, the lower the contribution. When there is zero balance in the member’s account,  there will be a call for payments. If the member’s account keeps zero balance more than 30 days, he/she will quit the plan automatically. It is estimated that the yearly contribution is between RMB60-90. When there is an application for RMB300,000 as mutual aid amount and if there are 1m participants, each user contributes only RMB0.30 (PR Newswire, 2016).

    The largest mutual aid platforms are listed below.

    1. Zhongtuobang,众托帮
    2. Shuidihuzhu,水滴互助
    3. Quarker,夸克联盟
    4. eHuzhu,e互助
    5. Kangaikongshe,抗癌公社
    6. 17Huzhu,17互助
    7. Bihuhuzhu,壁虎互助
    8. Tongxinhuzhu,同心互助
    9. Mayihubao,蚂蚁互保

    10. Banmashe,斑马社

    Started in July 2016 with a platform, Shanghai based with RMB100m registered capital Zhongtuobang (ZTB) has reached two million users as at 1 Oct 2016 and it is the first mutual aid company to have a double A rating from the Chinese Internet Association iTrust. On August 19, Shuidihuzhu was the largest with over a million users before being taken over by Zhongtuobang in the second half of 2016. The growth in this sector is exponential. The founders of these platforms have insurance experience and bridge the gap in serving the underserved.

    ZTB main business is in medical mutual aid and lower the barrier entry for micro enterprises and farmers that are deterred from buying insurance of high entry premiums. It is a form of insurance inclusion scheme where the risk is pooled with low contribution. Zhongtuobang has launched multiple mutual aid products including Anti-Cancer & Disease, Travel Accident, Dad & Mom Mutual Aid, Women’s Health and a Students Comprehensive Plan. According to ZTB, the average age of members is 31 and 27 for male and female respectively. To cater to those who are above 55 and not eligible for traditional insurance, ZTB rolled out mutual aid product for those between 51-65 years old. They have launched products specifically designed for medical care personnel and diabetes sufferers. There are plans to launch smart contract insurance products using the Blockchain technology. Blockchain with analytics also has certain features that will minimize false claims and frauds because the data are transparent and permanent. The total investment by Venture Capital into Beijing based Shuidihuzhu is RMB55m by IDG, Tencent, and others. They have launched four programs so far.

    There are two Blockchain use cases that we know of in the mutual aid industry in China, ZTB and Tongxinhuzhu. Tonxinhuzhu blockchain (https://www.tongxinclub.com/pc/blockchain/index) has 124,858 members, 90 nodes and around 971,533H/s, equivalent to computing power of 4 MacBook Pro and 2.7GHz Intel Core i5 8G storage. There are 537345 blocks as at 4 Oct 2016. Both cases are using Blockchain for identification and verification purposes for the members.

    The advantage of this Blockchain application is that historical information can be obtained for every account at low cost. Given that the information is permanent and public (it prevents the service provider from changing the records), it solves the issues of trust in a mutual aid platform. It is easy to match, execute, monitor with the potential use of smart contracts at low cost as compared to a centralized system. At present, claims are not verified or executed by smart contracts and Blockchain is only utilised to address the issue of trust in the mutual aid industry.

    This ZTB use case has demonstrated that mutual aid is scalable by solving the issue of trust among potential subscribers who are strangers to each other. This is scalable to 1.3b population from all over China with potential use of smart contracts. Insurance inclusion is achievable for specialised risk pooling in areas of insatiated demand, especially in rural areas and critical illnesses. With big data, such risk will be better understood and allowing for mass adoption and efficient pricing of insurance services. Network effect of risk sharing will enable mutual aid platforms to scale across a large number of members.

    Are these new Mutual Aid business models a form of LASIC InsurTech? This class of business model has low profits margin with no requirement of heavy investment in assets. It has been scaling as seen in the last few months with the help of low premium. Some of them are using Internet with Blockchain as an innovative technology to lower cost and increase trust. There are hardly any compliance rules at this moment for the industry. It remains to see if the use of new technology can detect and reduce fraudulent claims and whether the industry can increase its scope of services to a larger base of sticky customers. Ant Financial has only 1 fraud in 100,000 transactions and like M-PESA, offers services beyond payments of daily purchases and utilities. Users can buy insurance, funds, tickets, movie bonds, obtain loans, and even get a credit rating. The latest innovation Alipay Everywhere is to purchase household services such as cooking and caregiving from neighbours for a fee (Horwitz, 2006 and Jain, 2006). These are all made possible because of data analytic, location services and mobile technology. Big data, smart contract and artificial intelligence risk analytic remains an area that the mutual aid InsurTech industry need to take advantage of. There are LASIC unicorns such as Ant Financial to emulate and if the industry can harness the right technology to serve the masses, mutual aid startups such as Zhongtuobang will become the new unicorns.


    Biznews, “Mutual Aid Rising in China”, Sep 2016,http://www.biznews.in/article/mutual-aid-rising-in-china

    Fintech News, “Top50 Fintechs in China”, Sep 2016,http://fintechnews.sg/5639/fintech/top-50-fintechs-china-kpmg/

    Horowitz, Josh, “With Alipay, China’s Most Popular Payments App, You Can Now Ask Total Strangers To Do Anything For A Fee”, Sep 2016, http://qz.com/795732/alipay-everywhere-from-alibaba-and-ant-financial-lets-you-ask-total-strangers-to-do-anything-for-a-fee/

    Huzhuzhijia, “互助之家”,http://www.huzhuzj.com/

    Jain, Aman, “New Alibaba App Allows You To Ask Strangers Do Anything For A Fee”, Sep 2006, Valuewalk, http://www.valuewalk.com/2016/09/alibaba-app-strangers-anything-fee/

    Kropotkin, Peter, “Mutual aid: A Factor of Evolution”, 2008, Forgotten Books, Charleston, SC.

    Lee, David Kuo Chuen and Ernie Teo, “Emergence of Fintech and the LASIC Principles”, Journal of Financial Perspective, 2015, Vol 3, 3.

    PR Newswire, “Mutual Aid Rising in China: Inclusive Aid Catches Up With New Opportunities After the G20 Summit”, Sep 2016, http://en.prnasia.com/story/159264-0.shtml


    Appreciation to Ge Long, Co-founder, Eric Yu, CTO of Zhongtuobang and James Gong of Chainb.com.

    About David LEE Kuo Chuen

    David LEE Kuo Chuen, PhD(LSE), Professor (UniSIM), 2015 Fulbright Scholar (Stanford University), is an investor in Blockchain companies and . He is also the founder of Dlee Capital Management and various other companies. His award winning book “Digital Currency” was voted as outstanding by the American Library Association. His business and operating experience includes manufacturing, finance, hospitality, real estate, consultancy with 20 years in alternative finance. He is nominated by Internal Consulting Group as the Global Thought Leader for Fintech and Blockchain.by Internal Consulting Group as the Global Thought Leader for Fintech and Blockchain. He is contactable at [email protected].

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