Fubon Financial has agreed a deal to sell insurance through popular Chinese messaging service WeChat. The move gives Fubon incredible access to customers throughout China, and the UK’s insurers must be wondering how they can tap into social media as successfully.
Chinese internet company Tencent Holdings has agreed to let Fubon Property & Casualty Insurance sell insurance products on WeChat, a free messaging and calling smartphone app that connects via the internet rather than mobile networks. The service is extraordinarily popular, boasting 889 million active users every month. It is effectively China’s version of WhatsApp, and will grant Fubon a direct channel to the country’s millennials – a demographic insurers around the world have struggled to connect with.
The option to purchase insurance will appear on the app’s “9 cell grid” of services for users and will be available before the end of 2017, with property, casualty, and life insurance being sold on the platform.
WeChat already has a vast amount of consumer behavioral data through its payments service and e-commerce platform, although it remains to be seen whether this will be used to target people for specific lines of insurance. Tencent opened a lab in Seattle in May 2017 with the sole purpose of researching AI, so it is undoubtedly a key area of focus for the company.
Taikang Life Insurance was the first provider to utilize the WeChat platform, selling cheap life cover from 2014. Customers can share the policy with their contacts on the social media platform, and for every yuan a friend contributes the value of the policy increases.
Insurers in the UK will be watching with a sense of intrigue – not to mention envy – as this is the sort of access they could only dream of. UK insurers have tried to connect with customers through Facebook and Twitter, mainly for marketing products and customer service, but it is hard to see this sort of access ever being granted by WhatsApp. The company announced in August 2017 that it will test allowing companies to send advertising messages for the first time, but a spokesperson stated the service will remain a communications tool and will not open up to third parties like WeChat has.
The UK’s insurers will be left hoping that WhatsApp’s stance eventually softens, and that social media becomes a more viable sales platform. Otherwise they will be looking at deals such as the Fubon-WeChat partnership with envy.
By Ben Carey-Evans, General Insurance Analyst