The industry is in turmoil, zhongAn online (6060.HK) has a solid foundation, and the investment dividend of technology and ESG is expected to increase

On January 13, ZhongAn Online also clearly put forward several specific goals by 2025, such as promoting the industry's average online business online rate of more than 90%; increasing investment in insurance technology; deepening the diversified integration and application of technology and insurance, promoting the number of patent applications in the industry to exceed 20,000; and cultivating an open insurance technology industry ecology. Not only are several major trends such as online, intelligent and industrialization clear, but the space is further quantified.

In terms of the potential of onlineization alone, the target level of several indicators is clearly mentioned in the plan, including the proportion of online products exceeding 50%, the proportion of online customers exceeding 60%, the average underwriting automation rate exceeding 70%, the underwriting automation rate exceeding 80%, and the claims automation rate exceeding 40%. According to public data, in 2020, the industry's average underwriting automation rate is about 56%, the average claims automation rate is about 21%, the average online customer ratio is about 42%, and the average online product ratio is about 36%. In contrast, there is significant room for improvement in the degree of onlineization of all aspects of the insurance business.

It is not difficult to foresee that ZhongAn Online is expected to fully benefit from the development dividends driven by this round of technology, and its scientific and technological genes and application strength are obvious to all:

First, as the leader of the domestic Internet insurance industry, ZhongAn has rich experience in online operation, compared with traditional insurance companies, with technology and innovation genes, the company completed the "core + middle office" technology architecture deployment as early as six years ago, and has achieved external output and commercialization. According to public data, the revenue of this sector in 2017-2020 is CAGR of 263%.

The proportion of science and technology output revenue continues to rise

(Source: Western Securities)

Second, ZhongAn's technology export business has gradually become a system, covering three major product lines of production, growth and infrastructure. Among them, the customers of the growth series include taiping life, AIA life, Zhonghong Insurance, HSBC life, ABC life and other more than 10 well-known large institutions. In addition, it is worth mentioning that ZhongAn quickly launched a visual backtracking product on Internet sales behavior in the new regulations of Internet insurance, and quickly signed a total of 42 customers, including 34 new customers.

Not only the domestic market, ZhongAn's technology competence circle has also expanded overseas, covering Japan, Singapore, Indonesia, Thailand, serving customers including Asia's largest insurance company AIA, Singapore's largest insurance company NTUC Income and other overseas leading enterprises.

Green insurance is hot, ZhongAn has won a lot of singing, and the value of ESG is outstanding

In addition to the main wave of technology, the wave of ESG investment is also rapidly sweeping the insurance industry, which can be clearly explored from the trend of green insurance investment and the intensity and rhythm of policies in recent years.

Balance and growth rate of green insurance investment in 2018-2020

(Source: Insurance Association of China, KPMG)

China's green insurance policy development combing

(Source: KPMG)

What exactly is green insurance?

In fact, as early as 2016, the "Guiding Opinions on Building a Green Financial System" has defined it as a financial instrument that supports the transformation of the economy to greening, so the main path is to use insurance funds as long-term support to achieve the greening of insurance products and services. At the product level, such as the above-mentioned environmental liability insurance and new energy vehicle insurance, typical climate, green building insurance and catastrophe insurance, which have been hotly discussed in recent years, the service level, including upgrading business processes through digital technology, has achieved operational efficiency, risk control capabilities and user experience improvements.

On the road of exploration of green development, ZhongAn, as an innovation leader, is also continuing to promote and make significant breakthroughs.

According to the company's recently disclosed 2021 health insurance claim service annual report, since the launch of "full intelligent claims" last year, ZhongAn Health Insurance has achieved intelligent upgrades of the three major processes of "intelligent claims, intelligent verification, and intelligent upload", and the efficiency and user experience of claims have been improved again, such as an average of one claim settlement every 28 seconds, 95% of claims have been applied online, the waiting time for customers to receive compensation has decreased by 57% year-on-year, and 99% of the exclusive channel for cases of 10,000 yuan and the following cases has been quickly completed within 24 hours.

ESG has gradually become a variable that cannot be ignored in the investment evaluation model, and ZhongAn has also been favored by the bank. According to Daiwa Securities, ZhongAn ESG is worth outstanding, and the market has underestimated ZhongAn's excellent performance in social responsibility, and reiterated its buy rating. This is mainly due to: first, ZhongAn, as the leader of domestic Internet insurance, has a comprehensive personal data protection system that can minimize regulatory and reputation risks; second, ZhongAn's low-carbon operating costs are better than its peers, and it boosts the digital transformation of the industry by exporting technology products and solutions.

End

In recent days, Hong Kong stocks have continued to strengthen, market sentiment has gradually warmed, commonly known as "three fools" of real estate, insurance and silver are the vanguard troops, of which ZhongAn Online has also followed a slight rebound trend. As a domestic insurtech leader with prominent ESG value, it is still growing steadily under the new regulations, leading a solid position, and under the new cycle of rapid development of technology and greening in the domestic insurance industry, it has both β and α opportunities. Therefore, After the "squat", ZhongAn is expected to continue to rise in the future in the shock adjustment.

This article originated from Grand Gateway