Insurance landscape evolution and emergence of MGA/MGU model - Focus on Health insurance and Asia markets
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Insurance landscape evolution and emergence of MGA/MGU model Focus on Health insurance and Asia markets Hong Kong, May 2020
We will explore the dynamics of the health insurance market and deep
dive into the MGA/MGU1) landscape in Greater China and SEA
Outline
Key questions addressed
Table of contents
1 How has the insurance landscape evolved
and what are the new players that emerged? A Insurance and MGA macro trends
2 What strategies will incumbent and new
insurance players pursue in future?
B Value proposition of the various players in the
value chain
3 What is the MGA landscape in Asia and how
C MGA landscape in Asia
will that change?
D RB perspectives and key questions
4 What are the implications?
1) MGA: Managing General Agent / MGU: Managing General Underwriter
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 2
A. Insurance and MGA/MGU macro trends
Insurance landscape is evolving – All stakeholders are expanding
across the value chain to transform their value proposition
Health insurance value chain trends
Care
Reinsurer Insurer Agent Broker MGA/MGU Insurtech TPA providers
2) 2) 2)
Product
development
1)
Sales &
distribution
1) 3) 3) 3)
Underwriting
1)
Policy
admin & billing
1) 4)
Claims
management
(Access to)
Treatment
Core activity of player Secondary activity, could be delivered in partnership Entry into new segment by player
1) Turnkey product proposition via partnerships 2) Advisory services 3) Delegation of underwriting 4) MGA often involved in the claims process, while MGU usually is not
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 4
Focusing on MGA/MGU, while it is not new, there are increasingly
and proportionally more MGAs
MGA growth relative to brokers in UK [# of MGA firms]
CAGR ∑ change
3,750 [2010-2019] [2010-2019]
4% 3,600 -2%
3,550
4% 3,500
5% 3,450
3,400
5% 3,350
5%
6% 3,250
5%
3,150
6% 3,080
7%
7% MGA1) +4% +41%
96%
96% 95% 95% 95% 95% 95%
94% 93% 93%
Brokers -2% –20%
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
1) FCA authorized MGAs
Source: IMAS, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 5
Insurers not only value eficiency and customer service, but also rely
on MGAs to access markets that insurers find hard to access
What insurers look for when partnering MGAs
What are the key factors in partnership? Is technology an important factor in your MGA
[% that said yes by factor] relationship?
[% split of answers]
Efficiency / ease
53%
of doing business Yes – the MGAs seek
Others assurances / skills / support
Customer service 51%
from us in this area
Insurers 7% 7%
Efficient access
49% need
to new markets
MGA to
Technical insight enter
43%
and capability hard to
Strong conduct / access
39% 42%
risk management record or 44% Yes – we seek
affinity assurances from our
Cost 35% MGA partners that
markets
they are strong in this
Volume of business 18% area
No – underwriting
Exclusivity 10% skills and
customer reach
BD / cross-selling are what count
2%
opportunity
Source: Clydeco, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 6
MGA rely on insurers for reputation and claims record to gain
customer trust but offer area of specialization & technology to insurers
What MGAs look for when partnering insurers
What are the key factors in partnership? Is technology an important factor in your insurer
[% that said yes by factor] relationship?
[% split of answers]
Market reputation 77%
Experience in your No – underwriting
48% skills and Others
areas of specialization Key to assure
customers and customer reach 2%
Claims paying are what count
38% enable
supportsales
sales
record
27%
Exclusive arrangement 25% Yes – we offer
45% support in this area
Help in navigating
21%
regulatory approvals
Collaborative approach
21%
on conducting risk mgt. 26%
Ability to leverage
19%
data Yes – we seek assurances /
East of reporting skills / support in this area
19%
and compliance from insurers
Speed of approval 17%
Source: Clydeco, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 7Funding for MGAs mainly come from private owners/ investors,
private equity showing increasing interest in the model
Global ownership of MGA
80% > Compared to brokers, private equity
ownership is higher in MGAs
70% > We expect this is due to the fast growth of the
MGA industry that attracts private equity
60% > Fast growth of MGAs are driven by MGAs
value adding to insurers more than brokers
by
50% – Supporting across the value chain on
distribution (e.g. market access),
40% underwriting, policy administration etc.
– Reducing the combined ratio of insurers
30%
20%
10%
0%
Private investors/ owners Overseas investors Private equity Others
All distributors MGA
Source: Managing General Agents Association, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 8B. Value proposition of the various players in the value chain
Players across the insurance space are scrambling to be relevant
via greater customer focus and relationship, enabled by technology
Strategic intent of players
Insurance players Core activity Strategic development
Provide reinsurance and risk management Offer new services to primary insurers, invest in digital
Reinsurers 1 services to insurers ecosystem, to diversify revenues and get access to clients
Focus on underwriting and using third (re)Build and strengthen direct links to customers via
Insurers 2 party distributors e.g. brokers product differentiation and value added service (e.g. prevention)
Agents Represent insurers to generate leads and Become more customer-centric by managing portfolio
sell policies to customers coverage based on customers' current and future needs
Represent insurance buyers to compare Use of technology to compare prices tailored to customers
Brokers policies needs and control risks with a low turnaround time
Position to be experts in their specialty Focus on expertise and technology to master product
MGA/MGU 3 to underwrite and distribute efficiently development, achieve efficient distribution and improve CoR
Insurtechs Start of with a niche solution e.g. care Expand offering across the value chain to enhance original
4 network access, AI for claims processing… value proposition and diversify revenues
Support insurers on back-end functions to Leverage on scale and technology to expand and provide
TPAs optimize cost services (e.g. AI to improve adjudication)
Provide medical treatment Provide end-to-end services (treatment to insurance) to
Care providers 5 improve on patient relationships and stickiness
xx Focus in next pages
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 101 Reinsurer
Reinsurers extend their business model by offering more services
along the value chain and expanding their reach
Paradigm shift for reinsurers
Core reinsurer business model Strategic development of reinsurer business model
New
PI PI ventures PI New
PI ventures
New PI
Reinsurer Group
ventures Reinsurer Group
PI PI Deep dive on
Risk management Risk Direct
Reinsurance manage- investments New following
services PI Reinsurance ment into services slides
services ecosystem
Digitalization agenda
Value chain Exemplary value chain
1. 3. 4. 6. 7. 9. 10. 1. 3. 4. 6. 7. 9. 10.
Reinsurance 2. PI Technical 5. Product Policy 8. Claims Sales & Reinsurance 2. PI Technical 5. Product Policy 8. Claims Sales &
services Risk taking license platform Brand (incl. administration Service management Distribution services Risk taking license platform Brand (incl. administration Service management Distribution
underwriting) underwriting)
> Traditional business model by only offering reinsurance products and > Diversifying product portfolio by offering suitable white-label products
services for primary insurers which can be offered by several primary insurers
> No ecosystem effect > Leveraging ecosystem effects by connecting to primary insurers and
> Only the first step the insurance value chain is covered by reinsurer disrupting, new insurance ventures
> Several steps of the value chain are covered by the reinsurer (e.g. claims
management)
= covered by reinsurer = not covered by reinsurer
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 111 Reinsurer
Reinsurers focus on four scenarios to reshape and adapt their
business model to be ready for the future
Development scenarios for reinsurers
Scenarios description
1 Orchestrating an ecosystem 2 Providing a Tech stack 3 Offering TPA services 4 Offering MGA services
Description Reinsurer connects with different Reinsurer is mainly responsible for Reinsurer acts as a third party Reinsurer builds a specialized
organizations to broaden product building a powerful tech stack of provider and makes sure that all type of insurance agent or broker
portfolio and exploit new business the new offering for the primary backend processes (e.g. claims that has been granted
opportunities insurer and services) are running smoothly underwriting authority by a
primary insurer
Success > Building attractive offerings or a > Strong IT know-how > Smooth and lean processes > Customer-centric approach
factors new entity to connect to new > Big developer and service team > Good reputation to be able to act as > Scalability in different markets
stakeholders is key partner for primary insurers
Challenges > Building connections to not 100% > Insufficient technology know-how > Bad technical infrastructure (e.g. to > Finding no PIs in the respective
suitable partners and not deriving within the company forward claims in an appropriate time) market to be able to scale the
benefits from those alliances > Old-fashioned IT systems product
Responsibilities of scenarios along the value chain
1. Reinsurance 2. Risk 3. PI 4. Technical 6. Product 7. Policy 9. Claims 10. Sales &
5. Brand (incl. 8. Service
services taking license platform underwriting) administration management Distribution
1. Ecosystem
2. Tech stack
3. TPA
4. MGA
= covered by reinsurer = can be covered by reinsurer or PI = covered by PI
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 122 Insurer
Insurers will need to develop along 6 key pillars, of which, pillars 1, 2
and 4 are more easily achieved by partnering with MGAs/Insurtechs
Future strategic development for insurers 1)
Insurance NEW NORMAL
EFFICIENT RESILIENT RESPONSIBLE
Pillar 1 Pillar 2 Pillar 3 Pillar 4 Pillar 5 Pillar 6
Accelerate Develop Adapt Scale-Up in a Define a New Contribute to
Digitalization Prevention Organization and consolidating Deal with States "Sustainable
Services Talent Mgt. economy and Regulators Capitalism"
> Digitalization of > Higher focus on > Implement agile > Partnership with > Contribution to > Responsible
lead generation/ prevention-based and lean types of service providers financing of claim
conversion and protection working social protection management
> Domestic and
> Enhancement of products (health, long term > Protection of
> Rethink talent international
digital > Development of management alliances (e.g. care, pension, communities from
processing and risk consulting insurance housing) climate risks
> Develop employee
servicing and cyber-risk procurement) > Evolution of > Contributions to
engagement
> Extension of AI- coverage regulatory social
> Refocus > Higher investment
based customer > Growth of in services constraints sustainability
organization on
journeys wellness creating barriers-
crucial activities
services to-entry
Pillars that MGA/ Insurtech are usually better at – Partnership could be used to accelerate development
1) Prevalence increase post Covid-19 crisis
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 132 Insurer
The crisis has shown insurers the potential of digitization and the need to
push prevention as a way to be better prepared
Focus on Pillars 1 & 2 & 4
Accelerate Pillar 1 Develop Pillar 2 Scale-Up Pillar 4
Digitalization Prevention Services in a consolidating economy
> Distribution:
– Expected rise in online sales resulting from > Higher focus on prevention-based products; e.g. > Partnership with service providers close to
the duration of the confinement / social use of telematics in fleet management and IoT in insurance in order to increase customer base
distancing measures and the habits reinforced property insurance –implementation of pay-as-you- and develop customer loyalty
– Digital lead generation and lead conversion use tariffs; satellites for home insurance – Motor: with mobility players
(for simple products with limited need for – Home: with security services or telecom
advice) > Cyber risk coverage and prevention in the wake of
increased use of data and home working providers
– Reinforcement of customers' need for – Health: with healthcare providers
intimacy and advice for complex products > Specific protection products such as death, loss
of job etc. might offer an opportunity to boost > Alliance with competitors (nationally or
> Administration and operational processes: internationally) to increase buying power in
– Digital processing of inbound and outbound penetration
Insurance Procurement, for car repair or home
documents > Wellness and wellbeing services to improve repair in particular
– Must-have distant and digital servicing (e.g. health conditions to employees in all dimensions
electronic signature in underwriting, policy & (physical, mental, financial, community): > To create barriers to entry, higher investment in
claim management, policy renewals) – Health prevention on site with check-ups and services which can be bundled with insurance
primary care products or be sold stand-alone (e.g. tele-
> Claim management: consultation services)
– DIY/ Selfcare claim reporting (e.g. pictures – Support to employees to manage their elderly
taken by insured) when dependent > Continued cooperation with InsurTechs to
– AI-based damage assessment and AI-based – Reduction of absenteeism accelerate solution development, including
fraud management cooperation for advanced data collection
> Services allowing facilitation of home working
– Tele-health and online services
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 143 MGA
MGA will change dramatically – Players are originating from and
expanding to all across the value chain
MGA future development
In future, we
Reinsur Reinsur Reinsur expect MGAs to be
er er er
> Tech-focused as
Product when insurtechs
development enter the industry,
incumbents are
Sales & forced to digitally
distribution innovate
> Strong capability
Underwriting in distribution/
Medical Network
Policy > Large and
admin & billing provide end-to-
end service
Claims across the value
management chain for
economies of
(Access to) 1) 1) 1) 1) scale
Treatment
Where the firm started Subsequent expansions to become MGA 1) Medical Network
Source: Desk research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 154 Insurtechs
We also see insurtechs leveraging their technology and partner with
insurers to expand their value proposition
Insurtechs expanding across value chain
Overview Developments
Pdt. Policy Claim Treat-
Dist. UW
> CareVoice Revenue model dev. admin mgt. ment
started as an [as % of policy premiums, sanitized figures]
Insurtech firm Product enhancement
Service &
using mobile
product Developing/codeveloping tech. services
and data platform, and design & build products
layer
driven
solutions to Managed product
improve Expanding to provide TPA services by
TPA layer leveraging on service & product layer e.g.
customer upsell from product dev.
journey
Turnkey product
> By leveraging Distribu-
on data and Distributing products e.g. distribution in HK
tion layer and China
capabilities
with Profit Partnership
partnerships, sharing Leveraging on opportunity to propose MGA
CareVoice layer type profit sharing services
expanded its
"
services and Entry into new value chain
revenue model Total With different layers, revenue is Participation in value chain from previous
development
higher and more diversified
XXX : Value proposition for insurers
Source: TheCareVoice, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 165 Care providers
Healthcare providers are developing stronger insurance capabilities,
via inhouse or partnership, to drive patient and shareholder benefits
Healthcare providers entering insurance space
Healthcare providers adding an insurance
arm to realize benefits for customers and For example…
stakeholders Raffles Medical Group started as a hospital and
EB Value- moved to offer insurance…
added
solutions
Enhancing
Patient’s > Operate hospitals > Provide insurance and TPA (for
Customer Experience and medical clinics corporates)
benefits
Process
Integration …or Gleneagles global partnering insurers to
Healthcare improve patient experience
provider
Cost Gleneagles Global Hospital insurance partners
Insurer Containment
Cost Revenue Quality /
benefits benefits Value
Assurance
Shareholder benefits
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 175 Care providers
Relationship between hospitals and insurers is growing, with shared
interest, especially around specific products
Rationale of partnership with between private hospitals and insurers
Extensive hospital network Strong cost control capability
> Possess extensive and high-quality hospital network > Have strong cost control capability
– Have reliable private hospitals – Get access to hospital medical data
– Have Class III public hospitals – Select appropriate distribution channel
– Review underwriting and claim strictly
Willing to partner Willing to share data
Cost
Private hospital network Network Medical data access
Control
Public hospital VIP Distribution
Public hospital general Underwriting
Claim
Successful partnerships provide shared advantages and interests to the trio : Patient-Hospital-Insurer by
providing both transparency (on prices) and efficiency (on processes)
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 18C. MGA landscape in Asia
MGAs mainly partner to provide end-to-end services, except for large
MGAs with affiliate companies to perform activities such as underwriting
MGAs in Greater China and SEA by geography and value chain
Presence Product Sales & Policy Claims
Other
China HK SG Msia TH Indo SEA development distribution Underwriting admin and billing management Treatment
A+
April Asia
Argenta Underwriting
CareVoice
Criterion Underwriting
Datebao
DUAL Asia
Fullerton Health
Groupe Henner Holding
Homeins
Intellisures
Luma Health Insurance 1)
MSH China
Nanyan Group
Nexus Group
NexAssure Agency
One Degree
PowerfulTone
Raffles Medical
ShanZhen
WKBins
· William Russel
Zhilang
Activity done by MGA/ MGA affiliated company (e.g. within the same group) Collaborate with others/ potentially outsource Telemedicine HMO Inhouse medical
1) Small inhouse medical team clinic/ team
Source: Respective MGAs, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 20In China MGA market, MGA model is still in the early stage，
most existing players are startups and no dominant player by now
MGA landscape in Greater China (1/2)
Firm Presence Inception & size License Product focus Takeaway
A+ > Hong Kong > Started in 2008 > NA > International high-end
health insurance plan Players started
> 11-50 employees
as or close to
MGA model are
Datebao > Mainland > Started in 2014 > Insurance > Health insurance covering almost
China > 100-499 employees Broker in CN accident, air travel, adult, independent
children, elderly insurance MGAs and in
small size
CareVoice > Mainland China > Started in 2014 > NA in CN > Health insurance one-stop
> Hongkong > 20-99 employees > Agent license in solution These players
HK partnership with
leading health
WKBins > Mainland > Started in 2015 > Insurance broker > Health insurance, including insurance
China > 50-99 employees and Insurance critical illness, medical, companies, and
agent in CN accident and life insurance
focus on niche,
> HongKong > Started in 2016 > Virtual insurance > Health insurance solutions
uncovered
One Degree
> 51-200 employees license in HK health
protection
demand, and
Homeins > Mainland > Started in 2016 > Under > MGA (to get license) cut in from the
China >At the same time, several TPAs are trying to enter MGA market by
leveraging their healthcare data and network
MGA landscape in Greater China (2/2)
Firm Presence Inception & size License Product focus Takeaway
William Russel > Hongkong > ~50 employees > Insurance Agency > Health insurance
in HK Some players
started as
Nanyan Group > Mainland > Started in 2015 > Insurance broker > SaaS + MGA + TPA broker and IT
China > 20-99 employees in CN (Safeinsure > Intermediary pin solution, solution
Broker) Web marketing solution,
insurer system solution
provider, and
Zhilang > Mainland > Started in 2016 > Insurance > SaaS + MGA then turn into
China > Agency, insurance SaaA + MGA
products, agents, claim model
management, operation
MSH China > Mainland > Started in 2001 > Insurance part- > High-end HMO + MGA Some players
China > ~ 550 employees time agent in CN started as TPA
or HMO, then
ShanZhen > Mainland > Started in 2014 > NA in CN > Elderly care and
China customized body-check expand into
> 20-99 employees
MGA model
Intellisures > Mainland China > Started in 2017 > NA in CN > Value-based healthcare,
> USA > Mainland China > Started in 2015 > NA in CN > Dental care
>MGAs in SEA are mainly large firms from other regions or
healthcare providers and there are limited MGA insurtechs
MGA landscape in SEA
Firm Presence Inception & size License3) Product focus Takeaway
Nexus Group > Europe, NY, HK and > Started in 2008 > Labuan (Msia) > Accident & health, surety,
Labuan(Msia) > ~200 employees travel, latent defect, marine > MGAs in SEA
& aviation, financial & trade
are mainly
April > CN, HK, Ph, Vn, SG, TH, > Started in 1988 > Agent (HK, SG, TH, > Personal, Group, ST & LT
Asia Indo + FR, UK, CH, Mex Vn) + Broker (EUR) Int'l health insurance
from other
> ~300 employees 1)
regions as
DUAL Asia > HK, Philippines, Vn, > Started in 2009 > GIA agent (SG) > IT, professional indemnity
SG, TH > >~51-200 employee and cyber local start
ups are
Argenta > Sydney, Shanghai > Started in 2009 > Lloyd's Asia Scheme > Property, cargo, energy relatively few
and Singapore > ~11-50 employees (SG) marine and war business
> London, Hong Kong, > Started in 2011 > NA > Extended warranty, health,
> There are
NexAssure
KL and Singapore > ~11-50 employees financial, auto and travel also notable
healthcare
Luma Health > Thailand > Started in 2012 > Direct Non-life > Personal, Group and Travel
> ~11-50 employees Insurance Broker health insurance providers
turned MGAs
Criterion > Singapore > Started in 2018 > GIA agent (SG) > Cyber, Financial Lines and
Marine in SEA
> Europe & Africa, > Started in 1992 > NA > Health, life and income
Florida, HK, SG & KL protection and Raffles
> 51-200 employees
Medical)
Fullerton Health > Across China, HK, > Started in 1992 > NA > Health insurance
SG, PH, Indo, Msia, > 51-200 employees
NZ, AUS
Raffles Medical > Across China, SG2), > Started in 1972 > GIA agent (SG) > Health insurance
Vn, Cambodia, Japan > 51-200 employees
1) April Int'l Care, 3800 for Group 2) Insurance office is in SG but hospitals and clinics are across Asia (China, SG, Vn, Cambodia and Japan); 3) Selected Case study as follows
Source: Press review, Respective MGAs, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 23Datebao is the first in China to implement MGA model by connecting
scenarios and insurance product to cover the protection demands
Case study on Datebao
Overview Key takeaway
> China
Develop creative product and cover the whole value chain
> Founded in 2014
> Its first medical insurance "Family Big Box", provide healthcare
> First to implement protection to whole family (3 members at least)
MGA model in China
> Datebao almost covers the whole value chain, from product design,
> Internet health pricing ,re-insurance aggrangement, risk control and online promotion
insurance platform, > It has its own distribution to ensure "zero-commission", so that
providing operational
service to insurers by
premium is cheap enough to attract cusomters.
its InsurTech and
provide health Partnerships with leading insurers and health agencies to
management service build an eco-system
to customers by
leveraging health > Parnters with 10 re-/
insurance. insurers
> 8M customers > Connect and partnership Health 大糖医
with health management
platforms and hospitals Hospital &
Clinic
Source: Desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 24Datebao built partnerships with both insurers and non-insurers, to
connect insurance with user scenarios
Case study on Datebao
Establish
2014 2015 2016 2017 2018 2019
Insurer
Partnership
non- > Car-hailing > Tech Co.:Mi, Sui > Internet Platform: > Internet Platform:
insurer app:Didi
> Tech Co.:OFO
Funding > CNY 1m in > CNY 180m in > USD 20m in Series
angel round Series A B CDIB & Ceyuan
> K2VC & > Pingan Venture & Venture
Dwfund Ceyuan Venture& > USD 10m in Series
Fosun Group B1 Fosun Group&
CDIB
Source: Desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 25CareVoice launched in 2019 the first healthcare operating system
transforming health experience to be more consumer-centric
Case study on The CareVoice
Overview Key takeaway
> China
Focus on consumer centricity solutions
> Founded in 2014
> The independent health platform started to provide ratings and recommendations on medical
> Expanded into Hong providers so that consumers can find hospitals and doctors with confidence
Kong in 2018
> Unlike many mobile health solutions,CareVoice did not engage in costly direct to consumer
> Backed by top VC, marketing. Rather, CareVoice partners with insurers in order to on-board their policyholders
Asian and Chinese (individual and employees)
healthcare investors > Through partnering with CareVoice, health insurers / reinsurers can design and launch new health
insurance products, improve members' satisfaction, engagement rate whilst lowering their
> Unique "Care" and operating costs
"Cure" offering
> In 2019 launch of the Partnerships with leading insurers and health agencies to
CareVoice OS as the build an eco-system
first healthcare
operating system so > +25 insurers / reinsurers / TPAs
that insurers can deliver
more tailored, efficient
and compelling health > +300 medical providers
plans network
Source: Desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 26OneDegree is a HK based in start-up, launched is 1st insurance
product in April 2020
Case study on OneDegree
Overview Key success factors
> Offices in Hongkong, Target the unique market demand and develop creative
> Founded in 2016 insurance product
> Focuses on home- > Targeting 510,000 dogs and cats in Hognkong, its pet insurance is designed to
grown online pet cover veterinary bills and other expenses, with premiums ranging from a few
insurance, personal- hundred dollars to several thousand. (launched in 15th April, 2020)
line general insurance
and health insurance Technology Capability to make it easy for both customers and insurers
for customers through
an online insurance > Get a quote, buy a policy, and make claims easily from customers' laptop or mobile phone;90% of
platform claims approved will be paid in 2 working days.
> Its end-to-end digital platform is easily customizable and is designed to seamlessly integrate into any
insurance company’s existing system
> Offered insurance > Obtains virtual insurance license to become the first TechInsurer
cover to more than half
a million dogs and cats Partnerships with leading insurers and reinsurers
in Hongkong.
> Partnership with Cigna HK, as its online distribution platform to
> First to receive a virtual get access to China market
insurance license
> Working with two global giants in the reinsurance space, Munich
Re and Scor Re, to make sure customer' money is protected.
Source: Desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 27Nanyan is another leading MGA player in China, it focuses more on
systematic solutions and now it extends business model into TPA
Case study on Nanyan
Overview Key takeaway
> China
> Founded in 2015 Expanding value chain coverage to scale up
> Acquired an insurance > In its early stage, Nanyan focus more on broker enablement and systematic solutions, which is a
broker in 2018, and relatively easy cut-in for new entrants
TPA Medilink-global in > When Nanyan got more and more fundings, it started to make strategic moves by acquisition,
2019 obtaining broker and TPA who have already had strong precense in China
> Received investment > With its SaaS, geogracphical coverage of broker, TPA capability, Nanyan have the full capability of
from Bluerun Venture, MGA and relatively large scale comparing to other players in China market.
SIG, Starr and Boci
Group from 2015 to
2020. Partnerships with leading insurers and health agencies to
build an eco-system
> First to implement
SaaS+MGA model in
China > Partners with 55 re-/ insurers
> Provide comprehensive
third-party insurance e- > Connects and partners with
commerce services. different distributors
Source: Desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 28It entered the market by providing tech solution to brokers, and
expand business by acquisition after getting more and more funding
Case study on Nanyan
Established
2015 2016 2017 2018 2019 2020
Model
Evolution Broker + Tech Solution Broker + SaaS + TPA MGA
Funding > $1.76 million in > $10s of millions in > $15 million in > $10s of millions in
Series A by Series B by SIG, Series B1, by Series B2 by
Bluerun Bluerun STARR, SIG, and Bocigroup
Bluerun
Partnership > Partnershiped with life > Partnershiped with
insurance broker, P&C insurer by
health insurer, life providing claim
insurer technology service
Business > Monthly premium > Monthly premium
revenue reached CNY revenue reached CNY
Highlight 1m in Mar 10m in Jan
Business > Acquired Safeinsure > Founded a health > Acquired an
Broker (宇泰) TPA, Liangniao Leading TPA,
Expansion (椋鸟科技健康) Medilink-Global
Source: Desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 29The acquisition of an insurance broker and TPA helps Nanyan to
gain core capability along insurance value chain quickly
Case study on Nanyan
Company overview Company overview
> Insurance broker, founded in 2004; Headquarter in Beijing and > TPA and medical network for mid and high-end medical insurance
branches in Shanghai, Guangdong, Shenzhen, Jiangsu. > Previously owned by MediLink Global before selling 51% of
> Its broker business includes traditional insurance ( life, P&C, shares to Selfdoctor Technology Co., Ltd in 2014 (price: USD
health insurance), internet insurance, and reinsurance 300k)
> Partnership with leading insurers: > Large client base, handling TPA for 30+ life and health insurers
including:
Potential benefits Potential benefits
> Regional presence in China countrywide > Regional presence in China and South-East Asia
> Access to its broad clients portfolio and product coverage > Access to MediLink's broad clients portfolio
Source: Nanyang website, desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 30MSH China is now the largest high-end health insurance provider,
leveraging on its scale, network and TPA capabilities.
Case study on MSH China
Overview Key success factors
> Entered China in Most in-depth local healthcare network
2001
> MSH''s first move when entering China market 20 years ago, was to build up its healthcare network,
> Headquarter in connecting to both public and private hospitals and clinics
Shanghai, branch > The healthcare network makes its unique advantage when dealing with both insurers and customers
offices in Beijing,
Guangzhou,
Shenzhen, Chengdu, Partnerships with leading insurers
Singapore, and > MSH takes partnership with local insurers as its second step in China. With its partnership with global
service offices in insurers, MSH makes itself a best choise for foreigners in China.
Suzhou, Wuhan, some of its global partners: some of its local partners:
Dalian, Hefei, Harbin
and Wenzhou
> Largest market share
of high-end health
insurance in China high- quality TPA service
> Its full range TPA services include Sales and Marketing Support, Enrollment, Claim, Customer
Service, Claim Control and Risk Management, IT System Support, all of which benefit from
economies of scale and help lower insurers' combine ratio.
Source: MSH China website, desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 31MSH China cut in the market by building up healthcare network and
strengthened its unique competitive advantage in local market
Case study on MSH China
Established
2001~ 2004 2005 ~ 2016 2017 ~
Building local healthcare network Partnership with local insurers Expanding Affiliation
> 2001 1st international health insurance
> 2005 1st International Health Insurance policy approved > 2017 Launch new operation
service center
by the CBIRC system 2.0 - iHealth
> 2002 1st direct billing network with top-
ranking local hospitals > 2006 1st Long Term Disability policy approved by CBIRC
2011 1st international health insurance service provider > 2019 Strategic partnership
2004 1st local medical case management
with ISO 9001 Certification in China with 111 group (a leading
practice
integrated online and offline
> 2013 1st international health insurance service provider healthcare platform in China)
with ISO27001 Certification in China on health insurance and PBM
> 2016 Partnership with Boc Insurance and Yongan
Insurance on various overseas insurance plans.
Today Today Today
Healthcare network includes Partnership with about 5 global Is expanding its
1040 hospitals international insurers and 20+ local insurers. eco-system and
clinics, in 80+ cities. value chain
Source: MSH China website, desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 32April operates all over Asia, its strong partnership with distributors
and medical service provider forms its competitive advantage
Case study on April International Care Asia
Overview Key success factors
> April reinforced its
presence in Asia in Comprehensive coverage of insurance value chain
2012 through
acquisition > Its business model covers from product design, distribution and manage & assistance 24/7, so that it
could get almost every data along insurance value chain, customers could have one-stop experience
> Operations in China, with April and insurers could leverage on April totally
Hong Kong, Singapore,
Thailand, Vietnam,
Indonesia in-depth network locally and globally
> Provides international > Operating in Asia for 25+ years, April has developed a strong network with insurers, network providers and
personal medical medical service providers and managed to develop products adapted to their customers’ needs, wherever
insurance for they are in the Asia Pacific region
individuals, families, > With its integrated and regional footprint, April owns the advangtage of ecnomics of scale, which
SMEs and groups in helps to lower insurers' CoR
Hong Kong,
Philippines, Singapore, High- quality service capability
Thailand, Vietnam
> April make life easier for their internationally-mobile aware customers by insuring their health and
travel wherever they are in the world and whatever the nature and duration of their trip
Source: desk research, interviews, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 33For MGAs in Asia should note that a sizable competitor with large
ambitions is expanding in the region as well
Case study on Nexus
Overview Key success factors
Presence in Europe,
USA, China (inc. Buy and > Nexus has preferred acquisitions fuel growth, from
Hong Kong build over 2014 to 2019, > As Nexus turn it's
Singapore, Malaysia organic – Nexus's EBITDA grew from USD 3m to USD 18m growth ambitions to
growth in 2019 Asia, we expect
> Founded in 2008 – Nexus completed ~19 acquisitons Nexus to continue
maintaining
> Offers insurance on profit – Nexus's EBITDA to gross written premium acquisition and drive
accident & health, margins margins maintained at 4-5% consistently growth aggressively
surety, travel, latent > Funds mainly came from investment firms such as
defect, marine and B.P. Marsh & Partners, an investor in early stage – Nexus acquired a
aviation, financial financial services businesses (~19% shareholding Malaysia-Based
lines and trade credit stake in Nexus) Structured
> >USD 400m gross Partnerships > Nexus partners with more than 30 specialist Solutions
written premium with underwriters to support product offerings Specialist
underwriters (Huntington
"Aims to be the largest Underwriting) in
specialty MGA in Asia, Distribution > Brokers are a key distribution channel for Nexus e.g.
achieving USD 50m in 2018
via brokers started Xenia Broking Group and acquired Credit &
GWP" Business Finance (a specialist insurance broker) in
2019
Source: Nexus Underwriters, Press News, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 34A smaller startup has also seen success in the MGA market with
both internal and external factors contributing to its growth
Case study on Luma Health
Overview Key success factors
Offices in Thailand,
Vietnam, Myanmar Value-for- > In-house doctors who provide free consultation and
money recommend best medical facilities > There is an increasing
and Cambodia expat population in
offering(s) > Consumers view Luma's plans to be value-for-
> Founded in 2012 money due to cheaper premiums and lifetime Thailand, especially
via digital among the Chinese,
channels renewal guarantee unlike other insurance
> Focuses on health which doubled in size
companies with age renewal limits
insurance for from 2011 to 2016, with
individuals, > Leveraging of mobile app and social media to the average expat's
corporates and for engage consumers and provide lifestyle advice e.g. income increasing by
travelling exercising 28k USD in 2018
> Focuses on Thailand, Focus on > Thailand imposed a mandatory health insurance > The increasing
where it insurers expats requirement1) for expats with long stay visas1)with attractiveness of
>5,000 families and > As a result, Luma has focused on expats by offering Thailand for expats
companies attractive insurance packages would lead to more
– Expats can also choose to receive treatment in demand for expat
certain countries in Europe health insurance and
boost Luma's
– Offices are staffed with multi-lingual speakers e.g.
performance
German and French to support expats
1) Coverage requires a minimum of THB 40,000 for out-patient and THB 400,000 for in-patient medical bill coverage
Source: Luma Health, The Nation, Roland Berger 20200525_MGA model evolution Asia_vf.pptx 35D. RB perspectives and key questions
MGA model is now getting traction in Asia while key developments
drivers still remains "in the making"
What are the key insurance segments and
products where MGAs will provide the most
value to insurers ?
How do reinsurers will embrace the
transformation of this ecosystem ?
What level of expansion to expect in the
value chain either vertically or horizontally ?
What regulatory evolutions to expect ?
Which Asian markets and at what pace will
evolve towards this model ?
Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx 37In case you have further interest…
Laurent Doucet
Partner
+852 6895 7769
Laurent.Doucet@rolandberger.com
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