China is the global Insurtech ecosystem sandbox in which the SoftBank family love to play

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This past week and a half has seen a lot of moves and news from SoftBank and China.

Let’s have a look, shall we?

SoftBank

I love seeing an article with a headline of ‘Masayoshi Son’s secret to running his $100 billion fund: Telling start-ups to treat each other like family’.  

I don’t like to ‘toot my own horn’ too often.  However, it is nice to see these words from the man himself helping to validate the hypothesis I drew from my analysis of SoftBank’s investments earlier this year.

While it does look like the conversations between Swiss Re and SoftBank are going anywhere anytime soon, this doesn’t change SoftBank’s moves into Insurance.

An ecosystem (what SoftBank is building/has built) is much more enhanced when there is an element of protection for its participants. 

SoftBank has been making (what can argue) very aggressive moves in this respect. 

In regards to Masayoshi Son’s ‘secret’ above, Ping An which is invested in by SoftBank, is planning to work with Grab (now invested in by both SoftBank and Ping An Capital), ‘to become the first company in Southeast Asia to provide online medical and health services’.  

Further, a similar partnership is in the works with Ping An and PolicyBazaar (another SoftBank backed venture in India), for its new DocPrime service.  

If that wasn’t enough, Lemonade’s CEO, Daniel Schreiber was quoted on Bloomberg saying ‘We’ll be global by the end of 2018′.  SoftBank is an investor in Lemonade.

Moreso, there were rumors a few weeks ago of a SoftBank investment into European startup Insurer wefox Group too.  

This came at an interesting time, when Lemonade and wefox held ‘truce’ talks too.  Masayoshi Son is encouraging the startups it invests in to ‘treat each other like family’…and which family members sue each other?

Lastly, there was the announcement this week of the investment of ZhongAn by SoftBank to expand outside of China.

SoftBank has now invested in Ping An, ZhongAn, Lemonade and possibly wefox. 

By investing in Insurers in China, the US and Europe, SoftBank is positioning itself to have the capabilities and knowledge of Insurance to deploy across a variety of markets. 

I repeat – pay attention to the big moves that SoftBank IS making in Insurance.

China

Aside from the Ping An and ZhongAn news above as it relates to SoftBank, these two Chinese Insurance powerhouses have been making some more moves as well.

ZhongAn has launched a claims SaaS platform with AXA Tianping as the first company to join the platform.  I find this to be an interesting development.  Instead of Insurers sourcing technology from startups/technology vendors, why not source it from Digital Insurers which have already proven the technology to work.  After all, who will understand their business more than, another Insurer? With that being said, I’m not sure how this plays out in terms of other Insurers having access to each other’s customer data, processes, etc.  Let’s see…

Couple that with the investment in ZhongAn by SoftBank to expand internationally and there could be some very interesting things on the horizon for them.

Ping An, in addition to all of its moves above has made the headlines on two other matters:

  1. Ping An set to reveal smart city projectWe’ve covered Ping An’s ecosystem on Daily Fintech before and we should all know that they are no strangers to building an ecosystem.  But, an Insurer building a smart city…? All I can say is ‘wow’.
  2. Ping An targets US$50bn+ Pru acquisition – Being an ex-employee of the Prudential group, this headline certainly caught my eye.  Coupling Ping An’s digital capabilities with Prudential’s leading distribution force (both agency and bancassurance) and foothold in South East Asia would be incredible.  Personally, I don’t see this happening, however, this will be something to keep an eye on.

Summary

I find it fascinating that many of these investments being made in China are spreading their bets on some of the ‘same horses’.

SoftBank invested in Ping An.  Ping An is also one of the initial backers of ZhongAn. SoftBank also just invested ZhongAn as mentioned above.  

Ping An has also launched its own fund earlier this year ‘to bring global capabilities to China’.  Further, they recently launched an accelerator which will have ‘selected companies come from China, United States, United Kingdom, Singapore, Nigeria, India and Pakistan’.  

There are moves being made to and from China.  

I am more and more convinced that China is the global Insurtech ecosystem sandbox that all others will follow/copy.   There are things happening there that we don’t see in other parts of the world and these are starting to spread out to the rest of the region.  

It’s only a matter of time before they start spreading to other continents too – and SoftBank can/will help with that. 

Thanks to Rob Collins, China Expert and top Insurtech influencer, who assisted with some of the input of this article and who had this to say in conclusion:

With the outsized opportunities for greater Insurance penetration and a ‘mobile first’ consumer fast developing in Asia (China announced 800 million internet users this week), a sea of change is occurring.  Mega-ecosystems are forming (a la Ping An), mega investment rounds are the new normal (SoftBank) and nimble startups are going international (ZhongAn).  A strange consequence of all this is the state of competition.  From China’s behemoth mega-platforms to Insurtech startups, they are redefining the notion of coopetition – and at the same time, delivering unparalleled user experiences.  Hold on tight for an exciting ride.

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Stephen Goldstein is an experienced Insurance executive and Insurtech dealmaker with a core focus on growing revenue, launching go to market initiatives and advising industry leaders.

Let’s connect through my new Twitter account – @StephenMGoldy

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