Editors note: This article is from Babbitt Information (ID: bitcoin8btc), author: Qiu Xiangyu, published with authorization.
Insurance has always been regarded as one of the best application scenarios of the blockchain. Domestic insurance companies began to explore the blockchain in 2016, followed by Sunshine Insurance, China Ping An, Yian Insurance, Minsheng Life Insurance, Zhongan Insurance, Hengan Insurance, etc. Insurance companies such as Qin Life Insurance, Taikang Insurance, PICC Property Insurance, and Love Life Insurance have reported news of testing the blockchain.
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01 Whose Minsheng Life?
Minsheng Life Insurance has a rare pedigree among domestic insurance companies. It was initiated by the All-China Federation of Industry and Commerce. It was initiated by 21 companies. After 8 years of rough preparations, it has a profound historical background.
In China, a country with a characteristic socialist system, insurance is full of characteristics, and it has suffered a lot in Chinas transition from a planned economy to a market economy. After the completion of the Peoples Commune, the Chinese government believed that the role of insurance work had disappeared. In December 1958, the National Finance Conference issued an instruction to immediately suspend domestic insurance business. After that, Chinas insurance industry fell into a period of stagnation for nearly 20 years, and it was not recovered until November 1979. After the reform and opening up, China began to explore and establish a market economy system, and the State Council gradually liberalized the insurance business, allowing private capital to enter the insurance industry.
It was against this background that Minsheng Life Insurance was established, led by the All-China Federation of Industry and Commerce, with a total of 21 sponsoring shareholders, including Wanxiang Group, Oceanwide Holdings, and New Hope, among the earliest private enterprises after the founding of New China. Lu Guanqiu, Lu Zhiqiang and Liu Yonghao can be said to be the best specimens of domestic private capital witnessing the rapid development of the real economy at that time. Now some of the trendsetters of these times have passed away. The domestic economic environment has undergone earth-shaking changes, but the essence of Minsheng Life Insurance being controlled by private capital has not changed. .
In April 2002, Minsheng Insurance held a founding meeting. In April 2003, Minsheng Life Insurance sold its first policy. In 2017, Minsheng Life’s original insurance premium income exceeded 11 billion yuan.
Thanks to the policy dividends of Chinas reform and opening up and the wave of private capital turning from the real to the virtual after the reform and opening up, Minsheng Life has achieved rapid development in the past 15 years. In terms of premiums, it has been ranked 20-20 among life insurance companies in the past 3 years. 30 bits.
Today, the 40th anniversary of reform and opening up, the advantages of early policy dividends are no longer there, and get rid of the virtual and turn to the real has become the main tone of the current development of financial institutions. In the new wave of technology represented by the Internet, mobile Internet, Internet of Things, big data, artificial intelligence, blockchain, etc., the business model of insurance companies has begun to change. Many insurance companies are testing the waters of Internet insurance, and more organized Institutions have launched specialized Internet insurance companies, such as Zhongan Online, Taikang Online, Anxin Property Insurance, and Yian Property Insurance. Unlike traditional insurance companies that focus on manpower, the products of these Internet insurance companies are sold entirely through the Internet and do not have offline branches. mechanism.
In 2016, Chinas Internet insurance harvest year, Internet insurance premium income reached 234.7 billion yuan, more than 20 times that of 2012. Many third-party Internet insurance platforms have obtained large-scale financing. Whether it is industrial capital or technology giants such as BATJ, they have initiated or participated in insurance companies. It came to an abrupt end.
According to premium statistics, Minsheng Life Insurance is not particularly successful in exploring the Internet of insurance. According to statistics from the China Insurance Association, in the first half of 2018 in the Internet personal insurance market, 94.4% of the total Internet personal insurance premiums were concentrated in the hands of ten insurance companies, and Minsheng Life Insurance was not among them.
In addition, in the annual reports of Minsheng Life Insurance for the past three years, Internet insurance business was not mentioned. In 2015, the insurance premium for online sales was also included, which was only 290,000 yuan, which was almost negligible compared to the 9.5 billion yuan in sales revenue from all channels that year. Personal agency is still the most important channel for Minsheng Life’s premium income. Even in 2017, this channel contributed more than 90% of Minsheng Life’s premium income. Lets cast doubt on its exploration of internet insurance.
It may be one-sided to think that Minsheng Life Insurance has failed in Internet insurance just based on the fact that the Internet insurance premium data is not beautiful enough. In fact, Minsheng Life Insurance has not given up on the Internet insurance business, and has started to transform Internet insurance with the help of blockchain technology since 2016. Just like the first private capital to initiate the establishment of an insurance company, Minsheng Lifes spirit of daring to try to use blockchain technology in the production environment at this stage is worthy of recognition.
As the largest shareholder of Minsheng Life Insurance is Wanxiang Holdings, Xiao Feng, the vice chairman of Wanxiang Holdings, is a pioneer in researching and actively promoting blockchain technology in China. At the same time, Xiao Feng is also the vice chairman of Minsheng Life Insurance , In addition, private enterprises do not have so many rules and regulations, so Minsheng Lifes blockchain development is also a success.
Since 2016, Minsheng Life Insurance began to quietly explore the blockchain, using the blockchain claims POC project as an entry point to explore how blockchain technology can be applied in the field of insurance claims. A partner of business innovation consulting, responsible for the blockchain technology consulting project of Minsheng Life Insurance. Due to his long-term responsibility for the line of Minsheng Life Insurance, Cheng Yu is more familiar with the technology and business of the insurance blockchain. After the unanimous resolution of Minsheng Life Insurance and Wanxiang Blockchain, Cheng Yu was appointed as the general manager of the Health Division of Minsheng Life Insurance. In fact, it can also be seen from the list of managers in Minsheng Health’s brochure for the 2018 Wanxiang Blockchain Summit that more than half of them are from Wanxiang Distributed Business Innovation Consulting.
In May 2017, Minsheng Insurance Health Insurance Division and Wanxiang Blockchain Distributed Business Innovation Consulting jointly established the Minsheng Health Innovation Team, applying distributed business concepts and blockchain technology to transform the Internet insurance business.
Different from the low profile of other insurance companies, Minsheng Life Insurance is willing to publicly share the results of blockchain business, and the annual Wanxiang Blockchain Summit has become a stage for Minsheng Life Insurance to announce project results every year.
At the 2017 meeting, Minsheng Life Insurance announced a blockchain-based insurance claims POC project; in 2018, Minsheng Life Insurance launched a distributed anonymous data exchange alliance POC project.
The former project finally stopped at POC and did not enter production; the future of the latter project is still unknown.
For a long time, many experts and scholars believe that using the smart contract function of the blockchain can realize the automatic claim settlement of insurance, and the policyholder no longer has to run back and forth between the hospital and the insurance company. However, the idea is beautiful, but it is not so easy to realize it, and it can even be said that it will not work at this stage.
From October 2016 to February 2017, Minsheng Life Insurance made a POC for automatic claim settlement of blockchain insurance. The participants included Minsheng Life Insurance, Wanxiang Blockchain Distributed Business Innovation, and other subsidiaries of Wanxiang. In this scenario, after the policyholder purchases insurance, the data is recorded on the blockchain to ensure that it cannot be tampered with. In the event of a medical accident, the policyholder can automatically settle claims and calculate insurance benefits based on the blockchain and artificial intelligence according to the insurance terms. The specific process is shown in the figure below:
In this scenario, the hospital is a very important link. For a long time, insurance companies have been thinking about how to obtain medical data. Large insurance companies do it by investing in or acquiring medical institutions, but it is not so easy for small insurance companies.
According to Cheng Yu, the breadth and depth of medical data are two characteristics of the data that support insurance to make medical data innovation. In terms of breadth, insurance companies must access at least 30% of the data of tertiary hospitals in the country. In terms of depth, it is not enough for insurance companies to obtain simple billing information of patients, but also detailed information such as drug lists and medical record information.
Moreover, medical data involves the privacy and safety of patients. If the hospital shares these data with the outside world, who will bear the responsibility in the event of a medical dispute? Moreover, the motivation for hospital information to be uploaded to the chain is not so strong, and there is almost no benefit point for sharing data under the existing model. Under the centralized business model, the island effect of data information will still exist for a long time.
In fact, this is true. Since it is not realistic for the insurance company to directly contact the hospital, the POC did not go any further after the completion of the POC. The reason why the hospital is not motivated is not a technical problem at all. The hospital has many considerations, including medical disputes, whether the management of patient data is standardized, etc. Before these concerns or obstacles are dispelled, it is not feasible to directly connect with the hospital. If it is entered, the cleaning of medical data will also require a lot of work, and this step is too big. Cheng Yu said to Babbitt.
Backed by Wanxiang Holdings, Minsheng Life Insurance can be said to have the best blockchain technology talents, insurance business talents and industry resources in China. Over the years, many entrepreneurs chose to rush in when the blockchain was at its hottest, and some chose the direction of blockchain insurance startups. Whether these projects will work or not is also questionable.
After hitting a wall from the perspective of users, Minsheng Life Insurance tried to shift from the previous C-end policyholders to B-end insurance companies. In January 2018, Minsheng Health and Zhejiang Ningbo Insurance Association jointly carried out a blockchain-based anonymous data exchange POC project, and the bottom layer used the matrix element JUICE development platform. The project takes the underwriting of tax-preferential health insurance as a business scenario. On the premise of protecting customer privacy, through hash encryption and distributed methods, insurance companies can exchange safe and credible historical health claims data, thereby identifying possible risks and improve risk management capabilities.
However, we logged on to the official website of Minsheng Health to check the information of this product and found that users did not feel the use of blockchain technology at all. Claim settlement is still the traditional set of procedures: the policyholder calls the insurance company to report the case after an accident-submits the application and claim settlement materials to the insurance company by courier-the insurance company pays the insurance money after approval.
In this regard, Cheng Yu said, In fact, the blockchain technology innovation we mentioned is not a narrow blockchain technology, but a broader one. The broad blockchain technology is capable of supporting distributed data aggregation. capabilities. It can ensure that everyone can have more equal data ownership, innovation opportunities, including more equal opportunities to realize value.”
The reason for being a POC of a distributed anonymous data exchange alliance between insurance companies, Cheng Yu said, is that there are two main goals: 1. Hope to help insurance companies achieve shared query while ensuring the ownership and privacy of their own data. Second, let the insurance company have the ability of distributed data query.
The reason for choosing tax-preferential health insurance as the business scenario is that the terms of this insurance product are very similar to each insurance company, which is relatively easier to do.
The traditional way for an insurance company to query the claim information of the policyholder is to retrieve the historical claim information of the person in its own database to see if the customer has pre-existing diseases. However, the historical claim information of an insurance company is very limited. If the insurance company wants to retrieve the customers claim records from all insured insurance companies, it will actually be very difficult.
Based on the above contradictions, Minsheng Life proposes to aggregate medical data in a distributed manner. A distributed aggregation method has three core elements: First, it must have the ability to share distributed data. Second, a suitable consensus mechanism. Third, innovations based on these data.
The blockchain-based anonymous data exchange POC project jointly carried out by Minsheng Health and Zhejiang Ningbo Insurance Association is just an entry point. The real goal of Minsheng Health is to open up the data of the entire insurance industry and realize value sharing. Greatly promote the transformation of the business model of the insurance industry.
In addition to the above two POC projects, Minsheng Health has also made other attempts to use blockchain technology for insurance transformation, such as: using UTXO to modify the balance of insurance accounts, using zero-knowledge proof to transform health notifications, etc.
What is the hardest thing about blockchain innovation in the insurance industry? Cheng Yu believes that it is not about technology but about the change of centralized thinking mode. I have been with Minsheng Life Insurance for two years. The first year and a half was very difficult. No one in Minsheng Life Insurance understands what we are doing. It feels like a group of us are playing games. , the cost is still so high. In fact, we have made some small achievements this year. After seeing it, everyone thinks that we can do well, and we can cooperate. The same is true externally. The awareness of the entire market or participants for blockchain technology can reach I think it will take some time for a higher cognitive stage.
According to Cheng Yu, in the past two years, Minsheng Life Insurance has invested more than 30 million yuan in blockchain innovation. Since there is no profit pressure, Minsheng Health can focus on making some beneficial attempts in the blockchain technology layout of the insurance industry. As for when blockchain technology will be implemented in insurance, Cheng Yu said that Minsheng Life Insurance will take a long-term view and does not expect it to be implemented soon in the short term. We are very optimistic about the blockchain, including the potential of distributed commerce to transform the entire industry.
The article is the authors independent opinion and does not represent Babbitts position.
