With 100m registered users and 40m active customers, WeSure is 2.5 years into its journey.
Last week, as part of the launch of our Insurtech 100 our CEO Matt Connolly and Jonathan Swift, the Content Editor of the UK’s Insurance Post, caught up with WeSure’s Chairman and CEO Alan Lau.
Alan talks at length about their WeFit product (very similar to what we see from Vitality), the growth opportunities from developing products at a lower price point, and their responsibility to insure those who might be ill already.
To watch the full video: https://bit.ly/2ZCblew
Matt Connolly, Founder & CEO of Sønr
Alan Lau, Chairman & CEO of WeSure
Jonathan Swift, Content Director of Insurance Post
Matt Connolly: Alan, can you explain to the viewers the origin story behind WeSure, and the relationship with Tencent and WeChat.
Alan Lau: Sure. Tencent is one of the largest internet conglomerates in the world and it has a range of functions in China, ranging from social media to games to finance. And there’s about 800 million users that use WeChat pay on a daily basis and on that platform, a number of financial services are being offered, from wealth management to microloans.
And it was around 2016-2017 that Tencent started looking very intently into insurance and felt that important service to act. So, you know, that really was the genesis of WeSure. So, WeSure is the first majority-owned – an official internet platform under Tencent.
We live within the WeChat ecosystem, so, for anyone that’s in China, if you open WeChat and you click into the wallet, you will see WeSure alongside a number of the finance services that I mentioned just now. So, right now, WeSure has around a 100 million registered users and we insure over 40 million users right now.
Matt Connolly: And what made WeSure so different to the traditional insurance businesses in China?
Alan Lau: I guess we’re different in that we don’t have any agent. We are purely online. But contrary to people believing that while that might mean that I don’t get any service, actually that appeals to a lot of netizens in China that are very confident e-commerce shoppers.
As you know, both e-commerce and digital penetration are very high in China, and a lot of people, especially the core insurance demographic people in their 30s, have 10 years-worth of shopping experience online. So, when it comes to financial services, even in insurance, for them, it’s just adding one more product category.
And I think, as long as we make it simple and relatable, then people would buy and that certainly seems to be what we have seen in a very short history of WeSure in the past 2½ years so far.
Jonathan Swift: So, this is a question we’ve been asking to all the Insurtechs we’ve been talking to. How did WeSure respond to COVID-19, operationally?
Alan Lau: We started monitoring the situation since early in January and, you know of course, now it’s a known factor that on January 20th, one of the leading experts, Zhong Nanshan, in China announced from his trip to Wuhan that there is human-to-human transmission.
Right after that, the next day, we upgraded all of our medical coverage product with hospital cash tied to COVID coverage. And, over the next month, we actually launched quite a number of COVID coverage that has been taken up by about 15 million people ranging from general public to specific segments like doctors, journalists, and volunteer workers, who were really at a frontline making a lot of contributions to fight the pandemic in China.
Jonathan Swift: So, the numbers you’re talking about, they sound quite spectacular. Did you see tech insurance decline, stagnate, or stay the same during the pandemic?
Alan Lau: Well, we’ve actually seen a pretty significant pick up. I think the outbreak of the pandemic means that it raised the risk awareness of a lot of people. And, of course, everyone is staying home and what would they do except for going online?
And, combined with that, we’ve seen a big surge in demand for our service. So, we’ve added 25 million active users during the pandemic period. And, we’ve seen a general increase in health insurance.
Our quarterly number, just to give you a sense of Q1 versus Q4 last year has doubled. So, you know, that is an indication of the big surge in demand we’ve seen, particularly in health coverage.
Jonathan Swift: The question to ask is, has the age demographic stayed the same in terms of the people buying insurance?
Alan Lau: Actually, it’s broadly the same. We’ve actually done a survey with Fudan University in Shanghai recently, and there’s a couple of twists in it, in that we’ve seen a lot more female users purchasing.
Our ratio used to be 6:4 between men and women, and that’s just kind of flipped during the pandemic. I think, maybe they, within a family they are even more aware of the risk that it’s bringing to the broader family, and they are the one that’s sort of running online and taking our insurance.
And age-wise, it’s quite similar but, regionally, we also see a very interesting pattern in that, provinces that have SARS memories, particularly Guangdong and Beijing, amount the top two provinces when it comes to shopping for health coverage.
So, I think that those are a couple of interesting things that we’ve observed during the pandemic.
Matt Connolly: Thankyou for sharing that. You talked about a couple of the products that you brought to market in response to COVID-19. Are you able to give some sense of usual product cycles, so from concept to launch, and how you’re able to achieve that so quickly?
Alan Lau: Well, there’s two types of product launches. There’s upgrades and branding products. We’ve done both during the pandemic. Upgrades, in this particular period are done within a day.
So, for example, with the announcement of human-to-human transmission, the next day we’ve upgraded all of our health coverage to include a COVID hospital cash allowance. So, that is done within a day. For new products, it is done anywhere from a day to three days. It is very urgent and because all this happened just before Chinese New Year when everyone had left Shenzhen, which is our headquarter.
So, when we are trying to put together these new products, basically when we count, we have teams from 17 different cities across China, all working remote, and piecing together everything from product terms to UI designs to marketing and PR.
But I think we all realize the responsibility that’s been placed on us. We have the access to the market and, hopefully through WeSure as a platform, we can launch these types of services to those that really need it on the frontline. And I think this is the required speed to compete in China internet in some ways.
We also launched, in addition to what I’ve mentioned, the upgrades to existing products and also the specific sort of demographic medical coverage that we’ve launched. We’ve also done something for the small medium enterprise segment because these are critical to the Chinese economy. As I’m sure you’ve read, they’re very vulnerable because if they stop working, there’s no income. And they usually tend to be couples, so husband and wife teams.
So basically, in early February, we launched the SME coverage where we cover both – we covered the couple – and basically they would get a 100 RMB compensation for every day that they cannot open shop due to the pandemic.
Jonathan Swift: So, there’s lots of talk, Alan, of you know in the insurance community about the importance of customer experience and engagement. How do you measure customer satisfaction? I mean, how do you know your customers are satisfied with the WeSure products that they have?
Alan Lau: Well, we have a regular survey of customer satisfaction that usually puts us above 95 percent. But more interesting for us, we look at more real-time data. Just to give you an example, 80 percent of our buyers come back at least once during the first month after they’ve made the purchase, to learn, to use and to engage with what they have bought from us. We do realize insurance has very low frequency, so we also try to have adjacent services to deliver more value, even when they’re not sick or they’re not making any claims.
For us, that is a key part of delivering customer experience because, indeed, a lot of insurance is covering risk that had a range of probability. We want people to experience our service and product, even if they’re not making claims.
Just to give you an example, we have something called WeFit, which basically is a walk-and-earn program. During the pandemic, we’ve actually injected a lot of health management elements into it, like they can set exercise target, BMI target, sleeping hour target. And we’ve seen a 50 percent uplift, so we’re trying to deliver experience not just in insurance but also in adjacent services.
Matt Connolly: My question to you is where does the growth of opportunities lie for you?
Alan Lau: China is actually the second-largest insurance market in the world already, but penetration is still very low. So, we see the biggest opportunities still in the mass market and especially in health coverage. WeSure and Tencent has a unique opportunity and advantage, in that we have a low cost-to-serve and reach a lot of users. And, right now, health coverage in China is one of the broadest in the world, but it’s actually very shallow. So, if you’re down with a big illness, then a lot of people cannot afford it. Just to give you a stat, 40 percent of people that enter poverty, happen because there was someone in the family that got ill.
What we’re focusing on is providing that health coverage for the mass and trying to add service to it as well because sometimes, when you’re really ill with something serious, it’s not about the money. What we do is we actually help people, for example, if they’re down with cancer, we help our insured user make appointments with the right specialist as well. I think what we’re trying to do is combine claim that is financial compensation but also services, which is what people really need.
Jonathan Swift: And Alan, you’ve already mentioned WeFit, how WeFit has taken off during the pandemic. How does that fit in with your overall product set, because that’s a kind of adjunct to insurance, isn’t it really? And, do you see that you’re doing more of that, maybe?
Alan Lau: Again, it goes back to our realization that while insurance is a very important financial instrument, it has very low frequency, and it is difficult to be engaged. So, we try to think of what is the one layer beyond insurance. And for us, in health coverage, which is one of our key areas, it clearly would be something that is exercised for later.
That’s why we launched WeFit. It’s a way to engage, but also as a way to acquire users, right. It started life as a walk-in, so basically you do 800 steps a day and you make points with which you can redeem different things.
But now we’ve evolved that to include a range of health management tools, setting BMI target, sleep target, exercise target. And then you get points, which you can redeem for discount on your next installment because most of our insurance are sold on a monthly installment basis. They can redeem different gifts and goods.
So, for us, it’s a good thing because customers are engaged, and it also helps reduce risk because what we’re trying to do is, in effect we’re influencing behaviour. We’re trying to encourage people to all live a healthier life, so I think this is a – it’s important for us in that sense.
Matt Connolly: I had a question. I think you’ve answered that, Alan, about your plans to expand outside of China. Are you saying, for now, China is your focus? There’s still a lot of opportunity there for you?
Alan Lau: I think we’re sticking to China for now. We’ve only been around for 2.5 years so we’re still a very young company and I think there’s so much to grow in China. And I think this is where we see the big opportunity is.
Jonathan Swift: So, following on from that, Alan, I mean, do you follow what’s going on in the Insurtech destinations based globally? And do you have thoughts about the speed of otherwise digitalisation in insurance in other markets, compared to China?
Alan Lau: I think we do. Especially in the early stage of setting up WeSure. We take a very careful look at what are the innovative models around the world. And, of course, there are a lot of interesting things happening, but we see most of those 2B, rather than 2C services, serve the big insurance company, right. And I think that when we come back to China, as we reflect on the opportunity, I think there’s a very unique eco-system – a digital eco-system – in China that allows more 2C type of innovation like WeSure.
So, clearly we’d benefit from a very high commerce and digital wallet penetration here, and I think WeSure, via Tencent, has a unique advantage in the very large reach of traffic that we had, and also, user profile of some of our customers from using various other services that allow us to tailor in a very similar way that Amazon would recommend the next product to buy. So, we do pay attention to what’s going on outside, but coming back, we reflect on the unique opportunity, and we set up WeSure to be much more for a 2C type of play.
Matt Connolly: And so, 2.5 years, which is incredibly an early stage for such a well-established business already, what is the next twelve-month goal for WeSure?
Alan Lau: Health coverage is a big category for us, and therefore, the big next step for us is adding more product, but also getting into health management. So, the evolution of WeFit that I mentioned, getting into all types of BMI, sleep hours and exercise target setting, is one way in creating that as a tool to engage, and also to influence behaviors so everyone can live a healthier life. Although, the broader opportunity, as I also mentioned, is it’s going to be in the mass market. So, we’re going to be providing more products at a different price point.
An important space that we have started to explore, about half a year ago, is serving the underserved, particularly those that are sick already. What insurance has is this funny element that we only insure people that are healthy.
So, what happens if you’re sick already or if you’re a cancer patient? So, about a half year ago, we launched the first cancer coverage for those that are ill already in China, and you know, it took us quite a lot of effort because it means that we have to integrate, not just with the hospital but also with the big pharmaceutical companies that are providing the cancer-fighting drugs. But we think this is an important market for us to serve.
There are 4 million new cancer patients in China every year, and the number keeps adding up. And it’s a very underserved market in China and globally. So, I think we have the platform and some of the opportunity, and the responsibility, to prevent it.
Jonathan Swift: Okay, Alan, well we’ll say we very much look forward to seeing how you progress at 12 months, to see where you finish in next year’s Insurtech 100. So, thankyou again, Alan, and thank you very much Matt. As I said at the start of this broadcast, this is brought to you by Insurance Age and Insurance Post. If you want to register or subscribe to either title, then please use the banner which is up here. Until the next episode of the Covid-Cast, it’s goodbye for me and stay safe everybody. Cheerio.