The rise of the internet-powered new economy prompted China’s largest insurer Ping An Insurance Group to invest heavily into deep technology a decade ago.
Fast forward to this day, Ping An is already an all-cloud company, which means its claims systems, underwriting services, client authentication and even its personal loan business are all digitised.
Ping An is hailed as one of the leading innovators in the financial service space in Asia where some industry observers have even described it as a tech firm, placing the insurer on the same scale as Chinese internet giants Tencent and Alibaba.
“Are we a tech firm? Well, what’s fuelling that whole strategy is a set of tech capabilities married to a set of ultimate customer needs, and to a set of business models that are built around those needs enabled by today’s internet economy. That’s how we think about it,” said Ping An Group chief innovation officer Jonathan Larsen.
He joined Ping An in May 2017, after spending 18 years at Citigroup where he was most recently the global head of retail banking.
The $1-billion Voyager Fund
Besides being chief innovation officer, Larsen is also the CEO of Ping An’s $1-billion Global Voyager Fund which invests in fintech and health tech startups beyond China.
The Voyager Fund invests in companies of relevance to Ping An’s business units and its research and development efforts, explained Larsen.
“We don’t really mind where the company is, it doesn’t matter to us very much. What matters is what they can do and whether they can have something that can be of value to us, either now or over the longer term,” he said.
Although the billion-dollar fund has yet to make any investments in Southeast Asia or India, Larsen said he has started to look at India.
“Obviously, India is a very big market. There are some very interesting and attractive demographic trends. It’s a very complex market from a regulatory standpoint and infrastructure standpoint – it’s improving and it’s very competitive. It’s a market where you want to go in with your eyes open, probably with very good local partners,” he said.
The Voyager Fund is in no hurry to deploy its capital. So far, it has deployed roughly $200 million since its launch in May 2017.
Going back to its main focus, which is to scout for complementary capabilities that could further Ping An’s digital transformation, the fund has made several investments into startups across the world, the most recent one being Beijing-based artificial intelligence medical solution company Airdoc.
Larsen also shared that the fund is currently tracking about 15,000 fintech and health tech firms across the world.
“There is no way that any one firm can innovate everything that all those firms are doing. Companies like Ping An that are doing their own R&D and building their own capabilities de novo are very rare indeed. So, on the one hand, a part of our role is indeed to keep everybody on their toes, but much more importantly, it’s an acknowledgement that we’re not here to innovate everything. It doesn’t make sense for us to innovate everything; just as often as not, it’s going to make sense to leverage something that already exists,” he said.
Spinning off digital businesses
Besides the Voyager Fund, Ping An has also invested significantly into incubating its own digital businesses – Ping An Good Doctor, Lufax, and OneConnect.
One of these three new core businesses, Ping An Good Doctor, has grown to become China’s largest medical services app and finally went public via an initial public offering in Hong Kong last year, raising $1.12 billion in the process.
Meanwhile, online wealth management platform Lufax was also said to be planning an IPO in Hong Kong last year but has since postponed the listing as regulators tightened online lending rules. It raised an undisclosed Series C financing round this March, bringing its valuation to $39.4 billion.
Larsen said that Ping An is unique in having created businesses like Lufax or OneConnect, and Good Doctor.
“We’re talking about very significant businesses – unicorns, many times over. Ping An has a tremendously strong track record of building such businesses. There are 15 or 20 businesses at different stages of incubation and growth in the group. “Of course, not all of these businesses will achieve the same success as these three. And part of the nature of the game, when you’re building new businesses is that some are going to succeed, others are going to have to be iterated and modified before they emerge as winners. Our model so far has been, I think, very successful,” he said.
With so much money going into technology investments, what have been the returns for Ping An so far?
Ping An’s latest earnings announcement showed that about a third of Ping An Group’s 25 million new clients come from its internet platform every year.
“Creating new businesses is part of the DNA of Ping An. These internet businesses are new in the sense that they’re using a different kind of business model and set of technologies to differentiate themselves from the get-go.
“But there’s nothing new in the sense that Ping An has always been an entrepreneurial company and all but two of the company’s 30 or so business lines have been grown from scratch since the founding of the company in 1988,” said Larsen.