selling insurance on WeChat

Hi there,

The idea maze is a concept coined by Andreessen Horowitz board partner Balaji Srinivasan. Here’s an example:

As Srinivasan describes: “A good idea means a bird’s eye view of the idea maze, understanding all the permutations of the idea and the branching of the decision tree, gaming things out to the end of each scenario.”

The idea maze is an interesting exercise when it comes to thinking about the future of personal transportation and the ramifications different versions of the future present for the insurance industry.

In a September 2017 presentation at the Barclays Financial Services Conference, Allstate CEO Tom Wilson described that the future impact of autonomous cars is just “the tip of the iceberg.” Per the presentation, the bigger change and economic opportunity for insurers would be participating in the restructuring of the personal transport market. Last week, Allstate’s Arity announced its first partnership with a non-Allstate insurer.

On the path toward autonomous vehicles, can we place certain decisions happening today within a similar framework of thinking?

For example, Assurant’s acquisition last week of The Warranty Group for $1.9B excluding debt changes the makeup of the vehicle service contract market, adding 22M protected vehicles to Assurant.

But it could also have a longer-term impact depending on whether the market develops in a certain way. As Assurant management described on a call this week:

“As we look at our various markets, there are trends in auto, for example, autonomous vehicles, that could gradually shift ownership toward companies as opposed to individuals. Our whole business is partnering with companies to provide services around the risk event so as that as evolves, and who knows how it evolves or how quickly it evolves, we want to capitalize on that potential trend.”

Already, there has been experimenting through emerging models today. Several days prior to the acquisition, Tesla partnered with Liberty Mutual and Aviva to expand its car insurance program InsureMyTesla to the US and Canada. The customized insurance plan is underwritten by insurers partnering with Tesla, which include AXA in Hong Kong and QBE in Australia. Recall that Elon Musk said in February: “If we find that the insurance providers are not matching the insurance proportionate to the risk of the car, then, if we need to, we will in-source it.”

Following which tech-driven models OEMs are investing in is another way to think through where opportunities might exist for insurers. We earlier highlighted Daimler’s ramp-up in startup investments including recent rounds it led to ride-share service Via and P2P car-sharing service Turo (which has partnered with Intact and Liberty Mutual).

This week, Fair.com announced it had raised funding from BMW, Penske Automotive and Daimler’s Mercedes Benz as well as up to $1B in debt capital for its hybrid car-sharing and traditional leasing app. Here’s how it describes its optional insurance:

The idea maze is meant to be an exercise for developing startup ideas. But a similar framework can also help in contextualizing how actions taken today relay convictions about where the future is gradually headed.

Tencent gets green light on selling insurance through WeChat

In 2016, the amount of life and non-life insurance products sold through online or mobile channels in China totaled just over $45B. By 2021, the figure is expected to hit $145B, according to Oliver Wyman.

Tencent has expanded its strategic positioning in the insurance industry recently. In August, it formed a partnership with Fubon Financial to sell Fubon’s P&C insurance policies. This became closer to reality after Tencent’s online insurance agency, WeMin Insurance Agency, was approved by China’s insurance regulator earlier this month to sell insurance products on its popular messaging apps WeChat and QQ.

Here’s an updated chart from an earlier newsletter along with a more detailed analysis.

Have a great week,

Matt
@mlcwong