An amazing read/insight into how Ping An, the world's #1 insurer is using big data to reduce costs (>$750M/y) and save customers time (62% of claims handled automatically)
In 2017, Ping An, China’s second-largest insurer and its biggest non-state-owned company by revenue, rolled out a “Superfast Onsite Investigation” system—enabling policyholders to submit claims by simply opening a smartphone app and answering a few questions. But the app’s niftiest feature offers the option to not even wait for an inspector. Instead, customers can snap photos of a damaged vehicle and send them to a Ping An computer, which can respond with a repair estimate in three minutes or less. If the customer accepts the estimate, then wancheng! (“Done!”) Ping An can transfer funds immediately. Last year, Ping An’s customers used this feature to settle 7.3 million claims, or 62% of the total. The service saves the company more than $750 million each year by reducing bogus claims and human error. But its simplicity belies the extraordinary sophistication of the artificial intelligence and data-processing operations that make it possible. To generate accurate estimates, Ping An matches photos of vehicle damage against a database of 25 million parts used in the 60,000 different auto makes and models sold in China. The system assesses whether those parts can be repaired or must be replaced, then calculates the cost of parts and labor in more than 140,000 garages. Ping An integrates all that information with face-, voice- and image-recognition tech and a complex matrix of anti-fraud rules. Ping An chief scientist Xiao Jing says it took a team of A.I. experts, data scientists, and insurance managers three years to design, develop, and integrate the new service. It is, he exults, “the only one of its kind in the world.”
These products and services have a vital feature in common: They match online data, generated by China’s digitally native consumer masses, with a vast storehouse of “offline” data and insight amassed over three decades in the insurance business.
Ping An’s leadership foresees the day when the company’s technology businesses contribute as much as half of its earnings, up from only 6% today, and compete head-to-head with pure technology plays like Alibaba Group and Tencent Holdings.
Ping An earmarks 1% of revenue for investments in innovation. Over the past 10 years, the group has plowed more than $7 billion into research and development, and Ma has vowed to invest $15 billion more in the decade to come. That endowment has nurtured 11 technology affiliates, of which two—Good Doctor and Autohome, a platform for car buyers—are publicly traded and three are privately held “unicorns” with multibillion-dollar valuations For now, only two of those five are profitable. Even so, the combined value of the group’s tech ventures tops $70 billion. (See the “Star Pupils” sidebar.)
Schulte estimates that the BAT (China’s troika of Baidu, Alibaba, and Tencent) processes at least 10 times as much data every day as Ping An has acquired in its entire existence. But Ping An executives argue that quality matters more than quantity. The data its businesses collect is richer than that gleaned by the BAT, they claim, because it involves big-ticket transactions relating to health, wealth, and property—among the most meaningful decisions in customers’ lives.