Thinking ecosystems is the secret behind ZhongAn

Thinking ecosystems is the secret behind ZhongAn

Written by Roger Peverelli and Reggy de Feniks - Founders The DIA Community on 26 Jul, 2018

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We were delighted that Bill Song, the Director of International Business of ZhongAn Insurance and COO of ZhongAn Technologies International Group, accepted our invitation for the closing key note address at the last DIA edition in Amsterdam. The vision behind the first ever Insurtech unicorn is an example for many; deep customer insights and thinking ecosystems to acquire these insights and to deliver at an exceptional level are the keys to success.

Bill, can you share a bit about the background of ZhongAn?

Bill: “We see ourselves as a tech company. Actually we are the first online insurance company in China. If you compare us to a lot of European and American companies, we are still a baby. We only have 4.5 years of history. We were established in 2013 by three of China’s largest companies; Ant Financial of Alibaba, social media group Tencent and financial services group Ping An. Last year we had an IPO.”

The first IPO of its kind for an internet-only insurer. You raised no less than 1.5 bn USD, at a valuation of 10 bn USD, just four years after the launch - the first insurtech unicorn globally.

Bill: “Yes, quite an amazing score. If you look at our policy number, we should be the number one in the whole world. In the last three years we sold more than 10 billion policies. That sounds like a scary number, but we have such a big population in China. We have more than 400 million customers in our database, which gives us a huge advantage to understand customers from different angles.”

What is the secret behind the success of ZhongAn?

Bill: “We already have more than 3,000 employees at this moment, and more than 50% of them are in IT or engineers. We develop everything by ourselves. When we started we tried to work with the traditional system providers.  After two weeks we decided to develop everything ourselves, because the systems crashed every day. Just to give you an idea, last Single’s Day we sold over 200 million policies in one day. So we need to have very good technology. If you want to do business in China you need to be able to respond fast and handle big volumes from day one. Fortunately or unfortunately, this is because we are connected with almost all the largest internet players in China. We are currently connected with more than 300 different partners. I think this is quite aligned with DIA’s well-chosen theme of partners and ecosystems.”

Single’s Day is a holiday popular among the young Chinese to celebrate their pride in being single. The date, November 11th, was chosen because the number "1" resembles an individual. The holiday has become a popular shopping date, with sales exceeding 25 bn USD in spending on a single day, November 11, 2017.

You mention the importance of ecosystems in ZhongAn’s success. Can you elaborate?

Bill: “Now, after four years, we already have five major ecosystems, connecting us with more than 300 different players. Like Alibaba and Tencent - but we are also connected to almost all of the airline companies and all of the biggest housing providers in China. We started with ‘shipping return products’. This has given us a solid foundation. We sell a lot of policies, and by using those policies and moreover its data, it helps us to understand our customers much better. Within the first two years, we entered the travel and accident market and also the online health market. We definitely became number one in China’s online health insurance market. Within three months we sold more than 300,000 online health insurance policies. Now, after two years we already have more than 10 million health policy clients.”

So the key success factor is connecting the nodes in the ecosystem, creating network effects?

Bill: “We have a lot of interesting technology, which is made possible because of our great system and infrastructure. We can’t say we ">

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