Alibaba’s entry into Chinese online insurance market

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Alibaba’s insurance game plan started four years ago with its investment in Zhong An Insurance.

Editorial

In 2013, Alibaba co-invested in Zhong An Insurance, the first online-only insurer in China, holding 19.9% shares of the company. In 2016, it co-founded Alihealth internet insurance, targeting at the online health insurance market. Also in the same year, Alibaba launched the online insurance service in Alipay.

Alipay’s insurance service is attractive to both insurers and users

Insurers like Taikang Insurance and Ping An Insurance scrambled to launch products on Alipay’s insurance service platform – the world’s largest platform with 520 million Alipay users.

Alipay and Taikang Insurance launched a free health insurance products Dabing Wuyoubao, (大病无忧宝 – 福利版) on Alilay’s insurance service platform in April 2017. Users under 60 will get a certain amount of insurance coverage every time they make offline payment with Alipay.

The product, covering critical illness, requires no medical examination. Users can file a claim in the app and upload relevant materials as proof of the claim. They will get the payout when the claim is accepted. The product attracted 13 million applicants (11% of Taikang Insurance’s online users) in one month.

Screenshot of the policy

Insurers bid to offer their services. Users get to buy insurance from insurers offering the lowest prices.

Almost all kinds of insurance policies are available in Alipay’s insurance service platform. The purchasing and claiming process is quite simple. Users can choose the product and pay with Alipay within seconds.

Screenshot of the insurance products

More need to be done to perfect the system

Some argued that Alipay’s insurance profiling system oversimplified the digital KYC (Know Your Customer) process. Users are not specifically told about the important terms before purchase. They may thus neglect crucial information.

Consumers can use Alipay’s profiling functions and do self-assessment by answering a few questions. They will then get recommendations for insurance purchase based on their selections. Users can also forward questions to the insurance experts in the Commune (保民公社).

Screenshot of the risk assessment report

However, the profiling questions are too simple to uncover users’ needs. The insurance experts are often too busy to answer users’ questions. They only give out simple answers to some selected questions. Many users still find themselves overwhelmed by the various choices. There is more to be done to improve user experience.

Screenshot of the “Commune”

Alipay’s online insurance service is still at the early stage of development. Alipay management will need to significantly improve the service to reach its full potential.