Made in China: Some Surprising Innovations

September 22 2014 | Denise Garth

The dawn of a new industry and the Next-Gen Insurer is unfolding, influenced by levers of change from within and outside the industry, accelerated by an explosion of data and new technologies, and fueled by innovation. Some insurers are embracing innovation to inspire a renaissance of competitiveness and customer value, reinvigorating what made them successful leaders in the first place, or will make them the new market leaders of the future. There is an unparalleled opportunity to ignite a new future that is powered by the human imagination – and that is what China insurers are doing, as indicated in a recent article titled “Chinese Insurance Policies Cover Some Really Bizarre Things” by Clare Baldwin and Diana Chan in Business Insider. 

While the insurance policies being created may seem bizarre to some, they epitomize the spirit of product innovation, personalization, and customer engagement that are identified as key trends in SMA’s research, The Next-Gen Insurer: Fueled by Innovation. Understanding rapidly changing customer demographics, needs, and expectations is critical. The ability to rethink and reinvent the way to develop, package, and deliver products and services is vital for insurers if they are to be relevant, let alone successful in today’s new digital world.

So why are these innovative policies important for US insurers to understand and consider? 

First, the inspiration for innovation can come from other markets and geographies. It may stimulate the imagination, prompting new ideas and discovering opportunities that can be built upon to meet the unique needs of different markets and geographies. In many cases, less strict regulations can help identify, incubate, and market test new ideas. With more customers researching insurance on the Internet, they will see these innovative products and ask for them … and ask you why you don’t have them, or something similar. 

Second, this provides a great entryway for some to buy into other insurance products, deepening the relationship and increasing loyalty by and meeting smaller, more defined needs. What a great way to introduce your brand as innovative and personal. 

And finally, trends like the connected car, driverless car, connected home, connected health, sharing economy, and more are impacting the future of traditional insurance products such as auto, home, and health, to name a few. Insurers must be creative in meeting the shifting landscape of insurer needs, wants, and expectations.  

Interestingly, these niche-focused insurance products have been emerging in other areas in Asia Pacific, with “hole in one” insurance, and in Europe with “wedding” insurance. Zurich’s wedding insurance, which covers all of Europe, is an example of such a product and has been a big sales, marketing, and brand recognition success story. In the US, Warren Buffet’s Berkshire Hathaway insured the $1 billion prize to anyone who accurately picked the winner of every 2014 NCAA tournament game, a competition sponsored by Quicken Loans. And while no one picked the winners in the brackets, Warren and Berkshire Hathaway got a lot of media, brand, and goodwill coverage from their insurance coverage!

Each of these examples engages customers in a fun, unique way while also meeting a specific need. They have an element of “the cool factor” associated with them, something profoundly needed in an industry deemed old, stodgy, and “not so cool.”  

So, while the article about quirky Chinese insurance policies seems to take an “aren’t they cute” approach, the examples prove that they are actually highly relevant and valuable for the customers they target, meeting specific, unique, and sometimes culturally-based needs, not to mention helping to educate a large population about the broader value of insurance. The massive interest in these untapped nooks and crannies exposes the fact that there are ready customers, regardless of geography. 

The insurance industry has offered personalized, unique products in the past to selected individuals, but not on a mass basis. Remember when Tina Turner’s legs were insured, David Beckham’s legs were insured, Keith Richards hands, or Bruce Springsteen’s voice … all for millions of dollars? The difference here is that these are high-value, highly customized situations that were all one-off products. In today’s digital world, with the customer demanding personalized offerings, mass product personalization will increasingly be a key driver in product innovation, shifting the industry away from the legacy of mass production of personal insurance products. Fueling this change will be customer demographics and preferences.

With product personalization, insurers need to develop and launch new products or product components that customers can shape to their unique needs – within days or weeks – according to new customer expectations. The mass personalized products will include new services that will strengthen customer loyalty and retention. These trends will help insurers differentiate themselves in the market and open up new market opportunities that can drive revenue and profitability. 

So instead of “naughty child insurance,” maybe it could be child care insurance that covers the costs of holding the child’s place while the child is out due to significant illness. Instead of smog ruining your holiday, you could buy insurance against weather such as hurricanes or snowstorms that could cause cancellation or limits to your vacation. And instead of pregnancy before the honeymoon, it could be a health issue or death of a key wedding participant that could affect the wedding plans, and insurance could be the thing that could make a painful time a little less painful. 

Major forces are converging that are fundamentally changing the entire paradigm of insurance, creating the Next-Gen Insurer in the process. Today’s insurers are faced with choices that are more intense, disruptive, complex, and transformational than ever before. An era of new leaders will be determined by their ability to respond to change and become innovators, embracing and capitalizing on each new wave of innovation and disruption.

And some of the waves with vast possibilities and promise will be product innovation and mass personalization. Insurers in other geographies are catching the wave of customer needs and expectations. Are you prepared to ride the wave of mass personalization? If not, your competitors will!  

Denise Garth, Partner at Strategy Meets Action, is well known as an innovation leader in insurance. With a unique combination of strategic and operational experience in the industry, Denise is committed to helping insurers create and accelerate new ideas by capitalizing on established and emerging technologies. Denise can be reached at 1.402.963.018 at


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