Warp Speed Capital is a new VC Fund based in China and focussed on Insurtech. We interviewed Mr. Yang Xuan, Founding Partner, to get his take on this exciting market.  With Zhong An headed to IPO we read a lot about Insurtech in China. It is interesting to see what is happening at the early stage as Warp Speed Capital is focused on the Angel to A venture lifestage.

Q. Please tell us about your Fund and your personal history.

I have a decade long career in the IT industry and started working as an institutional angel investor since 2011. I focused on opportunities in TMT industries at first and invested in projects like Huxiu.com—a platform of tech news and insights, Weipai—a social app featured in video chatting and streaming and WeiboReach—analytics software for social platforms.

We started paying attention to insurance in 2014 and after some in-depth research into the industry, we were increasingly convinced that next generation of insurance, the Digital Insurance and InsurTech, will fundamentally change how insurance looked like in the old days. So we shifted our priorities into Digital Insurance.

Since then, we have invested in a number of promising projects in Digital Insurance, such as TopMDRT—a digital agent platform, NewTank—a big data company and auto insurance platforms. We have invested in seed stages and all the invested companies have closed their next round.

As for my Fund, Warp Speed Capital, we have 100 million RMB  ($15m) fund in place in our first term. We are looking to expand the fund to 300 million RMB ($45m) in the near future.

Q Please tell us what sort of opportunities you look for and why 

Chinese insurance industry is a huge market, its total premium income increased by 27.5% and reached 3.1 trillion RMB in 2016. Premium income from digital insurance was 234.7 billion RMB and accounted for only 7.5% of total premium income. So there is plenty of space for digital insurance to grow.

Besides, the digitalization of Chinese insurance industry is still at a relatively low level. Big insurers can afford advanced systems and store their data in clouds. But small companies still manually input their data into computers and store them in excel files. That leads to extra operating cost and inefficiency. So there is a huge potential for the development of digitalization in China.

Therefore, as a venture capital fund, we want to help promote the development of digitalization in Chinese insurance. Projects which can cut down operating costs, improve operating efficiency and improve the level of digitalization are our chief concerns and primary targets. We will help them, guide them and fund them to fulfill their purpose and make insurance a better industry.

Q Please tell us about your existing portfolio companies

NewTank

Founded in 2011, Shanghai NewTank Marketing Management Incorporated has devoted itself to providing marketing service for insurance industry. NewTank started exploring the solutions for insurance sales and distribution when they gained enough experience and resources. Those explorations are fruitful and they went public on National Equities Exchange and Quotations (NEEQ) at the end of 2016.

With its experience, resources and technologies, NewTank has built a Saas solution including online marketing and smart sales assistance to improve the efficiency and reduce the cost in insurance distribution.

The Saas solution focused on three processes, that is, source of customers, sales & service and customer management. By establishing ties with professional insurance marketing institutions, NewTank can help insurers acquire millions of potential customers. By building a call center and equipping it with AI technology, NewTank can collect and send useful leads to insurers. As for the customer management, NewTank will collect and reserve all the data about existing customers. With enough data, they can accurately profile everyone.

NewTank kept its growth rate over 100% in 3 consecutive years since 2014 and their revenue exceeded 40 million RMB in 2016.

TopMDRT

TopMDRT is an agent app developed by Shenzhen Yanyi Network Technology which is designed to provide service for insurance agents and help them get more customers. The ultimate goal of TopMDRT is to help agents realize their dream of becoming a MDRT member.

As the insurance expert for agents, TopMDRT will utilize all kinds of online tools to help improve the efficiency of agents. Besides, TopMDRT also uses the idea sharing economy and provides offline service for third party platforms, improving the conversion rate for them.

TopMDRT now has more than 1.6 million registered users. With their outstanding operating capabilities, they have achieved 5 million unique visitors and 20 million repeat visitors in several online activities. The data is ten times better than other similar apps.

Zhitong Tech

Zhitong Tech is providing solutions and information services for auto insurance companies. They have designed a price engine and a rule engine that help build a closer tie for auto insurers and their customers. By connecting every segment in the auto insurance value chain, they are planning to build an ecosystem in auto insurance industry to improve efficiency.

Their system and solutions are well received among traditional auto insurers and they have helped insurers generate more than 600 million premium income in the first half of 2017.

Bernard Lunn is a Fintech deal-maker, author, investor and thought-leader.

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