While China’s online property-and-casualty insurer Zhong An has risen to $8B in private market value, the country has seen relatively sparse VC-backed activity in the insurance tech space, as our latest post highlights.
One of those startups is OkChexian, which has sold hedges for traffic jams, parking tickets, and car washes to more than 1.2 million users partnering with the likes of Uber China and Ctrip.
Last month, OkChexian closed a Series A investment from JD.com, Ideate Investments, IDG Capital Partners, and Yunqi Partners.
We caught up with OkChexian founder Paul Qi below to chat new insurance products and insurance tech in China.
On insuring traffic jams
We launched traffic jam insurance in December 2015, covering a major pain point for urban drivers. After about 6 months of trial runs, we became confident about our smartphone telematics technology and had collected a large enough data sample to develop the first traffic jam model.
The premium is 1 yuan per day, or 5 yuan for a week. If the driver drives under 20 km/h (or 12.43m/h) continuously for 5 minutes, we define it as an incidence of traffic jam. Each incidence gets compensated for 5 yuan and daily limit is 20 yuan, but the money is only good for gasoline credit.
On the Chinese vs. US insurance market
The insurance market is very established in the US, but only in its infancy in China. The modern insurance market in China has only been around for 20 years since opening in the mid 1990’s. Along with the rise of Internet, lots of opportunities have emerged for startups here, however, unique challenges do exist including an immature market and under-educated consumers.
On insurance distribution challenges in China
People talk about how BAT (Baidu, Alibaba, Tencent) are controlling the online distribution channel. It is true in some senses, especially for new distribution channel-type startups.
At OKChexian, we focus on creating new products in niche markets, and it definitely helps to form partnerships when we are service providers and not potential competitors to BAT. Working with giants is not easy and startups will need to find new ways to engage with customers. It usually takes months to close a deal.