SINGAPORE, Dec. 29, 2020 /PRNewswire/ -- Significant growth potential – that's what Huize Holding Limited founder and chief executive Cunjun Ma sees in the evolving insurance market in China, and it looks like his firm is poised to benefit from the changes.
The easing of market access restrictions in the Chinese financial services sector paved the way for the China Banking and Insurance Regulatory Commission to greenlight the operations of the country's first fully foreign-owned insurance holding company in 2019. In Ma's view, this isn't something that domestic players should be afraid of.
"Personally, I would very much welcome the entry of foreign insurers into the Chinese market as these established industry players would bring in more advanced business philosophies, management practices, as well as better risk management capabilities, which would be highly beneficial for the industry to learn from," the CEO, who co-founded Huize with five partners in 2006, told Insurance Business.
Ma said Huize maintains good communication and cooperation with many foreign (re)insurers, and that it is this first-hand experience of working with them that has allowed the insurance product and service provider to improve its own business management and develop risk management capabilities such as Huize's intelligent online underwriting system.
He asserted: "Some might fear that the entry of foreign insurance companies will further intensify the fierce competition in the market. However, I think that the Chinese insurance market still has significant growth potential, implied by the relatively low penetration and density as compared to more mature markets."
The CEO is a firm believer that competition will encourage evolution – leading not only to improved services but also increased opportunities, as well as pushing the best enterprises to stand out.
"We strongly believe that the entrance of foreign insurance companies into the domestic market will provide us more working opportunities with leading players and therefore promote greater network effects and the further strengthening of Huize's platform," he said.
More than just a distributor
With a market capitalisation of approximately US$390 million, Huize connects customers and insurance companies while offering strong value propositions to both ends of the ecosystem. From the consumer perspective, Huize distributes high-quality insurance products and services to individuals of all life stages; on the other side of the equation, it helps to improve the operating efficiencies of its insurer partners.
Via its platform, the data- and technology-driven business has insured 56 million people in China through Huize's 6.7 million insurance clients as of September 30, 2020. Huize started out by simply displaying available insurance products for purchase by users, before incrementally incorporating value-added services such as claims assistance, product recommendations, and round-the-clock online support.
Ma's camp eventually introduced a B2B2C (business-to-business-to-consumer) distribution model, with a focus on long-term life and health insurance, facilitating what the CEO called "bilateral connections" between Huize users and insurer partners. Earlier this year, the company completed its Nasdaq listing.
Highlighting the crucial role played by data and technology, Ma declared: "We are facing the digitisation trend across our entire business and society. In the future, there will be a digital replica of everything in the virtual world for each and every one of us in the physical space. These digital replications will allow us to understand the world more accurately."
The Huize chief went on to state that insurance itself is a service based on data analytics.
"Traditional insurance has a greater reliance on static historical data and statistical methods," he explained. "In the future, insurance will be digital, relying on dynamic data and intelligent algorithm technology, as well as the Internet of Things.
"Digital insurance will expand the service boundaries of traditional insurance, allowing for a more accurate quantification of risk and a reduction of operational and service costs."
Moving forward, Ma cited the following as high on Huize's agenda: fully embracing digitalisation, continuously strengthening technology research and development, attracting talent, boosting the firm's core competencies, and optimising its corporate culture and governance structure.
"The new platform," he said, "will break the boundaries of the current business model, integrating online and offline channels as well as empowering the industry's upstream and downstream players with data and technology."
