Covid-19 triggers spike in Insurance demand in China, says WeSure

The Covid-19 pandemic has unexpectedly raised the sense of urgency in insurance purchase in China, paving the way for industry players to embrace notably 'half-ready' users through curated portfolio and user cultivation backed by technology, according to Alan Lau, CEO of Tencent WeSure.

Educating the largely under-insured population, building trust among users, and employing technology for accurate pricing are thus the three thrusts to gain an edge in China's vast yet less penetrated insurance market, Lau addressed a high-profile webinar on innovative insurance practices in China, Tencent WeSure have said in a press release.

“People often say that insurance is important but not urgent. But the pandemic did create quite a large group of what I would call 'half-ready' users, whose risk appetite or sensitivity to risk have grown but aren't quite ready to buy,” Lau said, citing the doubling of WeSure's quarter-on-quarter revenue during the height of the outbreak in China.

The outbreak confirms the notion that a major public health event could, to some extent, stimulate demand for insurance. With the lockdown of Wuhan on Jan 23 at the height of the outbreak, demand for insurance saw rapid explosion as newly confirmed Covid-19 cases skyrocketed. With the development of the contagion, the number of total newly-added policy holders, the number of visits to WeSure's mini program site-a critical indicator gauging prospective insurance needs, as well as annualised health insurance premium have all expanded, meanwhile registering substantial jump compared with same period in 2019.

Lau referred to a latest research Tencent WeSure conducted in tandem with Shanghai-based Fudan University, which unveiled a string of demographic changes among insurance buyers as a result of the pandemic. For instance, women have become more risk conscious, with the ratio of the number of men and women purchasing insurance on WeSure slashing from 2:1 to 1:1.

The highest jump in user numbers was witnessed among those in their 30s, a population segment perceived to bear the most family responsibilities. Also, by geographical breakdown, residents from the likes of Beijing and Guangdong, who have relatively stronger memories of SARS in 2003, experienced a noticeable pickup in insurance demand, according to the press release.

"So there's a lot of work for us to do to cultivate and educate these users that have suddenly arrived in very big numbers," Lau noted, adding it's by no means an easy feat given the complicatedness of insurance products even for the most educated population.

To make insurance buying less of a headache, Tencent WeSure has landed on two approaches: First is the adoption of a pre-selection pattern, wherein the platform hand-picks insurance products and tailored offerings based on individual needs. This 'curated portfolio' helps streamline the decision-making process, as opposed to the more common insurance marketplace model filled with a dazzling array of offerings that could easily deter prospective buyers.

The other more important gameplay is to employ the power of social "Word of Mouth" to both attract and retain customers. This is best exemplified by the fact that one-third of WeSure's sales are generated from social referral, three times higher than industry average.

Lau said WeSure has always upheld viral marketing as a 'very core aspect' of the business, touting its indispensable role in this trust-based industry. "There's no better connection and social relationship than what already exists...and no better way to sell when you hear it from your friend's recommendations.”

Apart from driving sales, the social aspect also weighs in on the post-purchase end, when making insurance claims could be a lengthy and troublesome process. Using a combination of artificial intelligence and human intervention, WeSure assigns each customer with a virtual 'claim concierge' that would follow through the entire process.

Such investment is paying off: Lau said 79% of claims handled via WeSure are processed within one day, whereas loss ratio is 30 to 80 percent lower than industry average.

The company has also embarked on new ways of customer engagement and education, riding on the knowledge-sharing and livestreaming boom for new sources of revenue. For instance, livestreaming has managed to turn clicks into revenue, with some 36,000 policies being snapped up from one online broadcast session on May 20. Lau said WeSure will expand the livestreaming footprint across major Chinese social media sites, imparting knowledge on real estate, fund and insurance through vivid, interactive storytelling.

Bill Song, CEO of ZA Tech Global, echoed Lau's view, saying the comprehensive internet ecosystem, the technology to scale, and the regulatory leeway offered by the authorities hold key to success in China's booming insurance market.

According to Leonard Li, a partner at Oliver Wyman, the four major growth drivers in Asia's insurance market are the large protection gap, technological readiness, favourable ecosystems that provide one-stop shop to lifestyle needs, and thriving fintech investment activities.

Launched in 2017, WeSure currently boasts over 80 million active users, according to the press release. Four in ten customers would choose to repurchase from the company, a remarkable achievement fuelled by algorithm and data-backed recommendations that serve to enhance product relevance for users.