#1Insurance landscape evolution and emergence of MGA/MGU model Focus on Health insurance and Asia markets Hong Kong, May 2020 Roland Berger#2Roland Berger 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 1 How has the insurance landscape evolved and what are the new players that emerged? Table of contents A Insurance and MGA macro trends 2 What strategies will incumbent and new insurance players pursue in future? 3 What is the MGA landscape in Asia and how will that change? 4 What are the implications? 1) MGA: Managing General Agent/MGU: Managing General Underwriter Source: Roland Berger Value proposition of the various players in the value chain C MGA landscape in Asia D RB perspectives and key questions 20200525_MGA model evolution Asia_vf.pptx | 2#3A. Insurance and MGA/MGU macro trends D Roland Berger#4Roland Berger Insurance landscape is evolving - All stakeholders are expanding across the value chain to transform their value proposition Health insurance value chain trends 懔 Reinsurer Insurer Agent Broker MGA/MGU Insurtech TPA Care providers 2) 2) Product development 1) Sales & distribution 1) 3) Underwriting 1) Policy admin & billing 1) Claims management (Access to) Treatment Core activity of player 1) Turnkey product proposition via partnerships Source: Roland Berger Secondary activity, could be delivered in partnership Entry into new segment by player 2) Advisory services 3) Delegation of underwriting 4) MGA often involved in the claims process, while MGU usually is not 20200525_MGA model evolution Asia_vf.pptx | 4#5Roland Berger 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] 3,750 CAGR Σ change [2010-2019] [2010-2019] 4% 3,600 -2% 3,550 3,500 4% 3,450 5% 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#6Roland Berger 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? [% that said yes by factor] Is technology an important factor in your MGA relationship? [% split of answers] Efficiency / ease 53% of doing business Customer service 51% Others Insurers Efficient access Yes the MGAs seek - assurances / skills / support from us in this area 7% 7% 49% need to new markets MGA to Technical insight 43% enter and capability hard to Strong conduct/ risk management record 39% access 42% 44% or Cost 35% affinity markets Volume of business 18% Yes - we seek assurances from our MGA partners that they are strong in this area Exclusivity 10% BD / cross-selling No-underwriting skills and customer reach are what count 2% opportunity Source: Clydeco, Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 6#7Roland Berger 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? [% that said yes by factor] Is technology an important factor in your insurer relationship? [% split of answers] No underwriting Market reputation 77% Experience in your Others 48% areas of specialization Key to assure customers and skills and customer reach 2% Claims paying 38% enable sales are what count record 27% Exclusive arrangement 25% Help in navigating 21% regulatory approvals Collaborative approach 21% on conducting risk mgt. 26% Ability to leverage 19% data East of reporting 19% and compliance - Yes we seek assurances / skills/support in this area from insurers Speed of approval 17% Source: Clydeco, Roland Berger 45% Yes - we offer support in this area 20200525_MGA model evolution Asia_vf.pptx | 7#8Funding for MGAs mainly come from private owners/ investors, private equity showing increasing interest in the model Global ownership of MGA 80% 70% 60% 50% 40% 30% 20% 10% Roland Berger > Compared to brokers, private equity ownership is higher in MGAS > We expect this is due to the fast growth of the MGA industry that attracts private equity > Fast growth of MGAs are driven by MGAS value adding to insurers more than brokers by - - Supporting across the value chain on distribution (e.g. market access), underwriting, policy administration etc. Reducing the combined ratio of insurers 0% Private investors/owners Overseas investors Private equity All distributors MGA Source: Managing General Agents Association, Roland Berger Others 20200525_MGA model evolution Asia_vf.pptx | 8#9B. Value proposition of the various players in the value chain Roland Berger#10Roland Berger 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 Reinsurers Insurers 2 Agents Brokers MGA/MGU 3 Insurtechs 4 TPAS Care providers 5 XX Focus in next pages Core activity Strategic development Provide reinsurance and risk management Offer new services to primary insurers, invest in digital services to insurers Focus on underwriting and using third party distributors e.g. brokers ecosystem, to diversify revenues and get access to clients (re)Build and strengthen direct links to customers via product differentiation and value added service (e.g. prevention) Represent insurers to generate leads and Become more customer-centric by managing portfolio sell policies to customers Represent insurance buyers to compare policies Position to be experts in their specialty to underwrite and distribute efficiently Start of with a niche solution e.g. care network access, Al for claims processing... Support insurers on back-end functions to optimize cost Provide medical treatment coverage based on customers' current and future needs Use of technology to compare prices tailored to customers needs and control risks with a low turnaround time Focus on expertise and technology to master product development, achieve efficient distribution and improve CoR Expand offering across the value chain to enhance original value proposition and diversify revenues Leverage on scale and technology to expand and provide services (e.g. Al to improve adjudication) Provide end-to-end services (treatment to insurance) to improve on patient relationships and stickiness Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 10#111 Reinsurer Roland Berger 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 PI PI Reinsurer Group New ventures PI PI New ventures PI New ventures Reinsurer Group Pl Pl Reinsurance Risk management services Risk manage- ΡΙ Reinsurance ment Direct investments into services ecosystem New services Deep dive on following slides Digitalization agenda Value chain Exemplary value chain Reinsurance services 2. Risk taking 5. Pl license Technical platform Brand 6. Product (incl. underwriting) 7 Policy administration 8. Service 9. Claims management 10. Sales & Distribution Reinsurance services 2. Risk taking Pl license 4. Technical platform 5. Brand 6. Product (incl. underwriting) 7. Policy administration 8. Service 9. Claims management 10. Sales & Distribution > Traditional business model by only offering reinsurance products and services for primary insurers > No ecosystem effect > Only the first step the insurance value chain is covered by reinsurer > Diversifying product portfolio by offering suitable white-label products which can be offered by several primary insurers > Leveraging ecosystem effects by connecting to primary insurers and 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 11#121 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 Description Reinsurer connects with different Success factors organizations to broaden product portfolio and exploit new business opportunities > Building attractive offerings or a new entity to connect to new stakeholders is key Challenges > Building connections to not 100% suitable partners and not deriving benefits from those alliances Reinsurer is mainly responsible for building a powerful tech stack of the new offering for the primary insurer > Strong IT know-how > Big developer and service team > Insufficient technology know-how within the company > Old-fashioned IT systems Responsibilities of scenarios along the value chain 1. Reinsurance services 2. Risk taking 3. Pl license 4. Technical platform 5. Brand 3 Offering TPA services Reinsurer acts as a third party provider and makes sure that all backend processes (e.g. claims and services) are running smoothly > Smooth and lean processes > Good reputation to be able to act as partner for primary insurers > Bad technical infrastructure (e.g. to forward claims in an appropriate time) 6. Product (incl. underwriting) Roland Berger 4 Offering MGA services Reinsurer builds a specialized type of insurance agent or broker that has been granted underwriting authority by a primary insurer > Customer-centric approach > Scalability in different markets > Finding no Pls in the respective market to be able to scale the product 7. Policy administration 8. Service 9. Claims management 10. Sales & Distribution 1. Ecosystem 2. Tech stack 3. TPA 4. MGA = covered by reinsurer = can be covered by reinsurer or Pl = covered by Pl Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 12#132 Insurer Roland Berger 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) Pillar 1 EFFICIENT Accelerate Digitalization > Digitalization of lead generation/ conversion > Enhancement of digital processing and servicing > Extension of Al- based customer journeys Pillar 2 Develop Prevention Services > Higher focus on prevention-based and protection products > Development of risk consulting and cyber-risk coverage > Growth of wellness services Insurance NEW NORMAL RESILIENT Pillar 3 Adapt Organization and Talent Mgt. > Implement agile and lean types of working > Rethink talent management > Develop employee engagement > Refocus organization on crucial activities Pillar 4 M Scale-Up in a consolidating economy > Partnership with service providers > Domestic and international alliances (e.g. insurance procurement) >Higher investment in services creating barriers- 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 Pillar 5 RESPONSIBLE Define a New Deal with States and Regulators > Contribution to financing of social protection (health, long term care, pension, housing) > Evolution of regulatory constraints Pillar 6 Contribute to "Sustainable Capitalism" > Responsible claim management > Protection of communities from climate risks > Contributions to social sustainability 20200525_MGA model evolution Asia_vf.pptx | 13#14Roland 2 Insurer Berger 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 M > Distribution: - Accelerate Digitalization Pillar 1 Expected rise in online sales resulting from the duration of the confinement/social distancing measures and the habits reinforced Digital lead generation and lead conversion (for simple products with limited need for advice) - Reinforcement of customers' need for intimacy and advice for complex products > Administration and operational processes: Digital processing of inbound and outbound documents - Must-have distant and digital servicing (e.g. electronic signature in underwriting, policy & claim management, policy renewals) Claim management: - DIY/Selfcare claim reporting (e.g. pictures taken by insured) Al-based damage assessment and Al-based fraud management Tele-health and online services Develop Prevention Services Pillar 2 > Higher focus on prevention-based products; e.g. use of telematics in fleet management and loT in property insurance -implementation of pay-as-you- use tariffs; satellites for home insurance > Cyber risk coverage and prevention in the wake of increased use of data and home working > Specific protection products such as death, loss of job etc. might offer an opportunity to boost penetration > Wellness and wellbeing services to improve health conditions to employees in all dimensions (physical, mental, financial, community): - Health prevention on site with check-ups and primary care Support to employees to manage their elderly when dependent - Reduction of absenteeism > Services allowing facilitation of home working Scale-Up Pillar 4 in a consolidating economy > Partnership with service providers close to insurance in order to increase customer base and develop customer loyalty - - Motor: with mobility players Home: with security services or telecom providers Health: with healthcare providers > Alliance with competitors (nationally or internationally) to increase buying power in Insurance Procurement, for car repair or home repair in particular > To create barriers to entry, higher investment in services which can be bundled with insurance products or be sold stand-alone (e.g. tele- consultation services) > Continued cooperation with InsurTechs to accelerate solution development, including cooperation for advanced data collection Source: Roland Berger 20200525 MGA model evolution Asia_vf.pptx | 14#153 MGA MGA will change dramatically - Players are originating from and expanding to all across the value chain MGA future development Roland Berger Product development Sales & distribution Underwriting Policy admin & billing Claims management MSH Nangun CareVoice 大特保 datebao.com OneDegree ※博智相结魯科技有限公司 (Access to) Treatment 1) 1) Where the firm started Subsequent expansions to become MGA 1) Medical Network Source: Desk research, Roland Berger intellisures In future, we expect MGAs to be > Tech-focused as when insurtechs enter the industry, incumbents are forced to digitally innovate > Strong capability in distribution/ Medical Network > Large and provide end-to- end service across the value chain for economies of 1) scale 20200525_MGA model evolution Asia_vf.pptx | 15#164 Insurtechs Roland Berger We also see insurtechs leveraging their technology and partner with insurers to expand their value proposition Insurtechs expanding across value chain Overview > CareVoice started as an Developments Revenue model CareVoice A Pdt. dev. Dist. UW Policy Claim Treat- admin mgt. ment [as % of policy premiums, sanitized figures] Insurtech firm Service & Product enhancement using mobile and data product layer Developing/codeveloping tech. services platform, and design & build products driven solutions to improve Managed product Expanding to provide TPA services by TPA layer customer journey > By leveraging on data and Distribu- tion layer capabilities with Profit partnerships, sharing CareVoice layer expanded its services and revenue model Total leveraging on service & product layer e.g. upsell from product dev. Turnkey product Distributing products e.g. distribution in HK and China Partnership Leveraging on opportunity to propose MGA type profit sharing services "I With different layers, revenue is higher and more diversified ☑ ☑ ♥ ♥ ✔ ✔ ✔ ✔ Entry into new value chain Participation in value chain from previous development XXX: Value proposition for insurers Source: TheCareVoice, Roland Berger 20200525 MGA model evolution Asia_vf.pptx | 16#175 Care providers Roland Berger 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 stakeholders ៣ EB Value- added solutions Enhancing Patient's Customer benefits Experience Process Integration Healthcare provider + Insurer Cost Revenue benefits benefits -Shareholder benefits- For example... Raffles Medical Group started as a hospital and moved to offer insurance... Raffles MedicalGroup + > Operate hospitals and medical clinics RafflesHealthinsurance Your Specialist Health Insurer > Provide insurance and TPA (for corporates) Cost Containment Quality / Value Assurance ...or Gleneagles global partnering insurers to improve patient experience Gleneagles Global Hospital insurance partners -ApolloMunich BAJAJ Allianz HEALTH INSURANCE FUTURE GENERALI TOTAL INSURANCE SOLUTIONS L&T Insurance RELIANCE Life Insurance HDFC ERGO GENERAL INSURANCE Max Bupa Health Insurance RELIGARE bharti AA life insurance ICICI Lombard नेशनल इन्स्योरेन्स National Insurance STAR Cholamandalam ICICI PRUDENTIAL The New Co. Lt STA STAR Se Health and Allied rance Co La Test free re UNITED INDIA INDURANCE CO LTD Universal Sompo Cigna Health Insurance IFFCO-TOKIO GENERAL INSURANCE Oriental insurance TATA AIG Source: Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 17#185 Care providers Roland Berger 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 > Possess extensive and high-quality hospital network - Have reliable private hospitals Have Class III public hospitals Willing to partner ¥ Strong cost control capability > Have strong cost control capability - Get access to hospital medical data · Select appropriate distribution channel - Review underwriting and claim strictly Willing to share data Private hospital network Network Public hospital VIP Public hospital general Cost Control Medical data access Distribution 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 | 18#19C. MGA landscape in Asia Roland Berger#20Roland Berger 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 Other China HK SG Msia TH Indo SEA Product development Sales & distribution Policy Claims 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 MSH China Nanyan Group Nexus Group NexAssure Agency One Degree PowerfulTone Raffles Medical ShanZhen WKBins William Russel Zhilang 33 33 3 333 333 333 3 33 > Activity done by MGA/ MGA affiliated company (e.g. within the same group) 1) Small inhouse medical team Source: Respective MGAs, Roland Berger (900 Collaborate with others/ potentially outsource ◉Telemedicine HMO Inhouse medical clinic/ team 20200525_MGA model evolution Asia_vf.pptx | 20#21Roland Berger In 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 A+ A+ International Healthcare Datebao datebao.com Presence > Hong Kong Inception & size License > Started in 2008 > 11-50 employees > Mainland China > Started in 2014 > 100-499 employees > NA > Insurance Broker in CN > Agent license in HK > Insurance broker and Insurance agent in CN CareVoice > Mainland China > Started in 2014 > NA in CN > Hongkong > 20-99 employees CareVoice WKBins > Mainland > Started in 2015 China > 50-99 employees 悟空保 One Degree > HongKong > Started in 2016 > 51-200 employees > Virtual insurance license in HK OneDegree > Mainland > Started in 2016 China 保险之家 > <20 employees Homeins > Under application Product focus > International high-end health insurance plan > Health insurance covering accident, air travel, adult, children, elderly insurance > Health insurance one-stop solution > Health insurance, including critical illness, medical, accident and life insurance > Health insurance solutions > MGA (to get license) Broker\agency management Takeaway 80 Players started as or close to MGA model are almost independent MGAs and in small size These players partnership with leading health insurance companies, and focus on niche, uncovered health protection demand, and cut in from the product side Homeins. Case study as follows Source: Press review, official websites, desktop research, Roland Berger analysis 20200525_MGA model evolution Asia_vf.pptx | 21#22Roland Berger 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 > ~50 employees William Russel > Hongkong William Russell Global protection for International living Nanyan Group > Mainland China > Started in 2015 > Insurance broker > 20-99 employees Vanjan in CN (Safeinsure Broker) Zhilang > Mainland > Started in 2016 > Insurance China > <50 employees broker in CN > Insurance Agency in HK time agent in CN Product focus > Health insurance > SaaS + MGA + TPA > Intermediary pin solution, Web marketing solution, insurer system solution > SaaS + MGA > Agency, insurance products, agents, claim management, operation > High-end HMO + MGA > Elderly care and customized body-check > Value-based healthcare, care coordination, hospital network > Dental care Takeaway Some players started as broker and IT solution provider, and then turn into SaaA + MGA model Some players started as TPA or HMO, then expand into MGA model 淄博智朗信息科技有限公司 MSH China > Mainland China > Started in 2001 > Insurance part- > 550 employees MSH > Mainland > Started in 2014 > NA in CN ShanZhen China > 20-99 employees 善诊 Intellisures > Mainland China > Started in 2017 > NA in CN > USA > <50 employees intellisures PowerfulTone > Mainland China > Started in 2015 > NA in CN 保服通 > <50 employees POWERFULTONE Case study as follows Source: Press review, official websites, desktop research, Roland Berger analysis 20200525_MGA model evolution Asia_vf.pptx | 22#23MGAs in SEA are mainly large firms from other regions or healthcare providers and there are limited MGA insurtechs MGA landscape in SEA Firm Nexus Group Enaaling nexus sof April dentities Asia april international DUAL Asia DUAL Argenta ARGENTA uw appelje voor de dont NexAssure NexAssure Luma Health lunahealth Presence > Europe, NY, HK and Labuan (Msia) > CN, HK, Ph, Vn, SG, TH, Indo + FR, UK, CH, Mex > HK, Philippines, Vn, SG, TH > Sydney, Shanghai and Singapore > London, Hong Kong, KL and Singapore > Thailand Inception & size > Started in 2008 > ~200 employees > Started in 1988 > ~300 employees 1) > Started in 2009 >>~51-200 employee License³) > Labuan (Msia) > Agent (HK, SG, TH, Vn) Broker (EUR) > GIA agent (SG) Product focus > Accident & health, surety, travel, latent defect, marine & aviation, financial & trade > Personal, Group, ST & LT Int'l health insurance > IT, professional indemnity and cyber > Lloyd's Asia Scheme > Property, cargo, energy > Direct Non-life Insurance Broker marine and war business > Extended warranty, health, financial, auto and travel > Personal, Group and Travel health insurance > Cyber, Financial Lines and Marine Takeaway Roland Berger MGAs in SEA are mainly from other regions as local start ups are relatively few &d There are also notable healthcare providers turned MGAs > Started in 2009 > ~11-50 employees (SG) > Started in 2011 > ~11-50 employees > NA Criterion > Singapore > Started in 2012 > ~11-50 employees > Started in 2018 > GIA agent (SG) > <50 employees Henner Henner > Europe & Africa, Florida, HK, SG & KL > Started in 1992 > 51-200 employees > NA FULLERTON SG, PH, Indo, Msia, NZ, AUS > Started in 1992 > 51-200 employees > NA > Across China, SG²), > Started in 1972 Raffles MedicalGroup Vn, Cambodia, Japan > 51-200 employees Raffles Medical 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 Source: Press review, Respective MGAs, Roland Berger Case study as follows 20200525_MGA model evolution Asia_vf.pptx | 23 > GIA agent (SG) > Health insurance Fullerton Health > Across China, HK, > Health, life and income protection > Health insurance in SEA (Fullerton and Raffles Medical)#24Roland Berger Datebao 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 > China > Founded in 2014 > First to implement MGA model in China > Internet health insurance platform, providing operational service to insurers by its InsurTech and provide health management service to customers by leveraging health insurance. > 8M customers Key takeaway * Develop creative product and cover the whole value chain > Its first medical insurance "Family Big Box", provide healthcare protection to whole family (3 members at least) > Datebao almost covers the whole value chain, from product design, pricing,re-insurance aggrangement, risk control and online promotion > It has its own distribution to ensure "zero-commission", so that premium is cheap enough to attract cusomters. Partnerships with leading insurers and health agencies to build an eco-system > Parnters with 10 re-/ insurers > Connect and partnership with health management platforms and hospitals 中国平安 PING AN API 亚太财险 Health Asia-Pacific P&C 中国人寿 c 太平洋保险 CHINA LIFE CPIC AB 6 大特保 datebao.com 太享e保 全家桶 PICC 中国人民保险 Allianz ⑪ AIG 中国太平 CHINA TAIPING 安邦保险集团 安联保险 送客基恩 DAAN GENE 大糖医 药房网 健康 yaofang.com Hospital & 上海交通大学医学院附属瑞金医院 Clinic iKang Source: Desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 24#25Roland Berger Datebao built partnerships with both insurers and non-insurers, to connect insurance with user scenarios Case study on Datebao -Partnership- Insurer Establish 2014 2016 2015 中国平安 PING AN Munich RE 中国太平 CHINA TAIPING STARR COMPANIES GLOBAL INSURANCE & INVESTMENTS 2017 | 太平洋保险 CPIC NCI 新华保险 关爱人生每一天 泰康 Taikang 保険 医 永安保险 INTERNATION YONG AN INSURANCE ΑΙΑ 友邦保险 > Tech Co.:Mi, Sui > Internet Platform: DiDi וח SUI 随手 non- insurer > Car-hailing app:Didi Q 药房网 1 yaofang.com > Tech Co.:OFO 2018 ◎ 太平洋保险 CPIC C 中国人寿 CHINA LIFE > Internet Platform: b 京东 ICBC 宮 中国工商银行 大特保 datebao.com 2019 Funding > CNY 1m in angel round > K2VC & Dwfund > CNY 180m in Series A > Pingan Venture & Ceyuan Venture& Fosun Group > USD 20m in Series B CDIB & Ceyuan Venture > USD 10m in Series B1 Fosun Group& CDIB Source: Desktop research, Roland Berger ofop 7东方福利网 DONGFANGFULI.COM 20200525_MGA model evolution Asia_vf.pptx | 25#26Roland Berger CareVoice launched in 2019 the first healthcare operating system. transforming health experience to be more consumer-centric Case study on The CareVoice Overview > China > Founded in 2014 > Expanded into Hong Kong in 2018 > Backed by top VC, Asian and Chinese healthcare investors > Unique "Care" and "Cure" offering > In 2019 launch of the Care Voice OS as the first healthcare operating system so that insurers can deliver more tailored, efficient and compelling health plans Key takeaway 38 Focus on consumer centricity solutions CareVoice > The independent health platform started to provide ratings and recommendations on medical providers so that consumers can find hospitals and doctors with confidence > Unlike many mobile health solutions, CareVoice did not engage in costly direct to consumer marketing. Rather, CareVoice partners with insurers in order to on-board their policyholders (individual and employees) > Through partnering with CareVoice, health insurers / reinsurers can design and launch new health insurance products, improve members' satisfaction, engagement rate whilst lowering their operating costs Partnerships with leading insurers and health agencies to build an eco-system > +25 insurers / reinsurers/TPAS > +300 medical providers network PING AN HEALTH 慶安盛天平 平安健康 「AIGGBG Insurance Without Borders CHUBB 众安保险 Medimpact aetna® GENERALI 德视佳眼科 他达医疗 JIAHUI HEALTH 嘉会医疗 DeltaHealth EuroEyes ZhongAn Insurance PICC MediLink-Global Electronic Healthcard Network abacare Inter Partner SCOR 中国人民保险集团公司 ASSISTANCE MEDICAL LANIN 萊佛士医疗 RafflesMedical 览海医疗 American-Sino OB/GYNPediatrics Services 美莱婦兒服務 aprt St. Michael Hospital 5 YIXING MEDICAL Source: Desktop research, Roland Berger rainbow CHILDREN'S CLINIC SinoUnited Health Clinic 料 ARRAIL ME 医 13 International Dental Clinic vas COLUMBIA WooYoo MUR CLINIC 上海百道门诊部 PANTHEON CLINIC 20200525_MGA model evolution Asia_vf.pptx | 26#27OneDegree is a HK based in start-up, launched is 1st insurance product in April 2020 Case study on OneDegree Overview > Offices in Hongkong, > Founded in 2016 > Focuses on home- grown online pet insurance, personal- line general insurance and health insurance for customers through an online insurance platform TC TechCrunch > Offered insurance cover to more than half a million dogs and cats in Hongkong. > First to receive a virtual insurance license Key success factors Target the unique market demand and develop creative insurance product > Targeting 510,000 dogs and cats in Hognkong, its pet insurance is designed to cover veterinary bills and other expenses, with premiums ranging from a few hundred dollars to several thousand. (launched in 15th April, 2020) Roland Berger OneDegree Paws up for pet insurance Technology Capability to make it easy for both customers and insurers > Get a quote, buy a policy, and make claims easily from customers' laptop or mobile phone; 90% of 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 > Obtains virtual insurance license to become the first TechInsurer Partnerships with leading insurers and reinsurers > Partnership with Cigna HK, as its online distribution platform to get access to China market > Working with two global giants in the reinsurance space, Munich Re and Scor Re, to make sure customer' money is protected. Munich RE Cigna. SCOR The Art & Science of Risk Source: Desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 27#28Roland Berger Nanyan 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 > China > Founded in 2015 > Acquired an insurance broker in 2018, and TPA Medilink-global in 2019 > Received investment from Bluerun Venture, SIG, Starr and Boci Group from 2015 to 2020. > First to implement SaaS+MGA model in China > Provide comprehensive third-party insurance e- commerce services. Key takeaway Expanding value chain coverage to scale up Nangan > In its early stage, Nanyan focus more on broker enablement and systematic solutions, which is a relatively easy cut-in for new entrants > When Nanyan got more and more fundings, it started to make strategic moves by acquisition, obtaining broker and TPA who have already had strong precense in China > With its SaaS, geographical coverage of broker, TPA capability, Nanyan have the full capability of MGA and relatively large scale comparing to other players in China market. Partnerships with leading insurers and health agencies to 「AIG 富邦财险 中国平安 build an eco-system > Partners with 55 re-/ insurers PICC PING AN 中国人民保险 中国太平 保险、银行、投资 CHINA TAIPING 史 带 财险 > Connects and partners with different distributors STARR GLOBAL INSURANCE & INVESTMENTS 广东省旅游控股集团有限公司 GUANGDONG PROVINCIAL TOURISM HOLDINGS CO., LTD. Source: Desktop research, Roland Berger CTS 20200525_MGA model evolution Asia_vf.pptx | 28#29Roland Berger It 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 Nangan 2016 2017 2018 2019 2020 Broker + Tech Solution Broker + SaaS + TPA MGA 2015 Model Evolution Funding G Partnership > $1.76 million in Series A by Bluerun Business Highlight > Partnershiped with life insurance broker, health insurer, life insurer > Monthly premium revenue reached CNY 1m in Mar > $10s of millions in Series B by SIG, Bluerun > Partnershiped with P&C insurer by providing claim technology service > Monthly premium revenue reached CNY 10m in Jan > $15 million in Series B1, by STARR, SIG, and Bluerun Business Expansion Source: Desktop research, Roland Berger > Acquired Safeinsure Broker (宇泰) > Founded a health TPA, Liangniao (椋鸟科技健康) > Acquired an Leading TPA, Medilink-Global MediLink-Global Electronic Healthcard Network SAFEINSUREBROKER > $10s of millions in Series B2 by Bocigroup 20200525_MGA model evolution Asia_vf.pptx | 29#30The acquisition of an insurance broker and TPA helps Nanyan to gain core capability along insurance value chain quickly Case study on Nanyan SAFE INSURE BROKER Company overview > Insurance broker, founded in 2004; Headquarter in Beijing and branches in Shanghai, Guangdong, Shenzhen, Jiangsu > Its broker business includes traditional insurance ( life, P&C, health insurance), internet insurance, and reinsurance > Partnership with leading insurers: MediLink-Global Electronic Healthcard Network Company overview Roland Berger Nanyan > TPA and medical network for mid and high-end medical insurance > Previously owned by MediLink Global before selling 51% of shares to Selfdoctor Technology Co., Ltd in 2014 (price: USD 300k) > Large client base, handling TPA for 30+ life and health insurers including: 中国平安 PING AN 中国大地保险 FOSUN HEALTH China Continent Insurance 复星联合健康保险 G 中意财险 GENERALI CHINA INSURANCE - 富邦财险 HK Allianz 安联保险集团 复星保德信 Pramerica FOSUN Liberty Insurance... 利宝保险 STARR COMPANIES 弘康人寿 売 安盛天平 GLOBAL INSURANCE & VESTMENTS 阳光保险 中国太平 1 中英人寿 Sunshine Insurance CHINA TAIPING AVIVA-COFCO Potential benefits > Regional presence in China countrywide > Access to its broad clients portfolio and product coverage 中国平安 PICC 國泰人壽 LAMP Cathay Life Insurance PING AN GBG Fasurance Without Borders" 鬧繪素 中英人寿 SINO LIFE AVIVA-COFCO 太保安联(1) 泰康人寿” CPIC Allianz AIP AYA TAIKANG LIFE Potential benefits > Regional presence in China and South-East Asia > Access to MediLink's broad clients portfolio Source: Nanyang website, desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 30#31Roland Berger MSH China is now the largest high-end health insurance provider, leveraging on its scale, network and TPA capabilities. Case study on MSH China MSH INTERNATIONAL Overview E Key success factors STACI SAINT HONORE GROUP > Entered China in 2001 > Headquarter in Shanghai, branch offices in Beijing, Guangzhou, Shenzhen, Chengdu, Singapore, and service offices in Suzhou, Wuhan, Dalian, Hefei, Harbin and Wenzhou > Largest market share of high-end health insurance in China Most in-depth local healthcare network > MSH"'s first move when entering China market 20 years ago, was to build up its healthcare network, connecting to both public and private hospitals and clinics > The healthcare network makes its unique advantage when dealing with both insurers and customers Partnerships with leading insurers > MSH takes partnership with local insurers as its second step in China. With its partnership with global insurers, MSH makes itself a best choise for foreigners in China. some of its global partners: Allianz some of its local partners: 中国大地保険 中国太平 China Continent Insurance 冒百年人寿 CHINA TAIPING MetLife AXA avrist General Insurance 华泰保险 永安保险 Huatai Insurance high-quality TPA service YONG AN INSURANCE AEON LIFE PICC 中国人民保险 > 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 | 31#32Roland Berger MSH 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 Building local healthcare network > 2001 1st international health insurance- service center > 2002 1st direct billing network with top- ranking local hospitals 2004 1st local medical case management practice 華山醫院 HUASHAN HOSPITAL th T 8888 # PEXING UNION MEDICAL COLLEGE HOSPITAL PITAL ? 和睦家医疗 United Family Healthcare ParkwayHealth™ Medical Centers 百汇医疗器 Today Healthcare network includes 1040 hospitals international clinics, in 80+ cities. 2005-2016 Partnership with local insurers > 2005 1st International Health Insurance policy approved by the CBIRC > 2006 1st Long Term Disability policy approved by CBIRC 2011 1st international health insurance service provider with ISO 9001 Certification in China ISO 9001:2008 BUREAU VERITAS Certification > 2013 1st international health insurance service provider with ISO27001 Certification in China bsi. ANAB ACCREDITED > 2016 Partnership with Boc Insurance and Yongan Insurance on various overseas insurance plans. 永安保险 YONG AN INSURANCE Today 中銀保险 BOC INSURANCE Partnership with about 5 global insurers and 20+ local insurers. 2017- Expanding Affiliation MSH INTERNATIONAL STACI SAINT HONORE GROUP > 2017 Launch new operation system 2.0 - iHealth > 2019 Strategic partnership with 111 group (a leading integrated online and offline healthcare platform in China) on health insurance and PBM MInc. Today Is expanding its eco-system and value chain Source: MSH China website, desktop research, Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 32#33Roland Berger April 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 > April reinforced its presence in Asia in 2012 through acquisition Operations in China, Hong Kong, Singapore, Thailand, Vietnam, Indonesia Provides international personal medical insurance for individuals, families, SMEs and groups in Hong Kong, Philippines, Singapore, Thailand, Vietnam EE Key success factors Comprehensive coverage of insurance value chain april international > 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 with April and insurers could leverage on April totally in-depth network locally and globally > Operating in Asia for 25+ years, April has developed a strong network with insurers, network providers and medical service providers and managed to develop products adapted to their customers' needs, wherever they are in the Asia Pacific region > With its integrated and regional footprint, April owns the advangtage of ecnomics of scale, which helps to lower insurers' CoR High-quality service capability > 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 | 33#34Roland Berger For 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 % nexus > Presence in Europe, Buy and USA, China (inc. Hong Kong build over > Nexus has preferred acquisitions fuel growth, from 2014 to 2019, organic growth Singapore, Malaysia > Founded in 2008 > Offers insurance on accident & health, surety, travel, latent defect, marine and aviation, financial lines and trade credit >>USD 400m gross written premium "Aims to be the largest specialty MGA in Asia, achieving USD 50m in GWP" maintaining profit margins Partnerships with underwriters via brokers - Nexus's EBITDA grew from USD 3m to USD 18m in 2019 - Nexus completed ~19 acquisitons - Nexus's EBITDA to gross written premium margins maintained at 4-5% consistently > Funds mainly came from investment firms such as B.P. Marsh & Partners, an investor in early stage financial services businesses (~19% shareholding stake in Nexus) Nexus partners with more than 30 specialist underwriters to support product offerings Distribution > Brokers are a key distribution channel for Nexus e.g. started Xenia Broking Group and acquired Credit & Business Finance (a specialist insurance broker) in 2019 > As Nexus turn it's growth ambitions to Asia, we expect Nexus to continue acquisition and drive growth aggressively Nexus acquired a Malaysia-Based Structured Solutions Specialist (Huntington Underwriting) in 2018 Source: Nexus Underwriters, Press News, Roland Berger 20200525_MGA model evolution Asia_vf.pptx | 34#35A 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 > Offices in Thailand, Vietnam, Myanmar and Cambodia > Founded in 2012 > Focuses on health insurance for individuals, travelling corporates and for > Focuses on Thailand, Key success factors Value-for- money offering(s) via digital channels where it insurers Focus on expats >5,000 families and companies > In-house doctors who provide free consultation and recommend best medical facilities > Consumers view Luma's plans to be value-for- money due to cheaper premiums and lifetime renewal guarantee unlike other insurance companies with age renewal limits > Leveraging of mobile app and social media to engage consumers and provide lifestyle advice e.g. exercising > Thailand imposed a mandatory health insurance requirement¹) for expats with long stay visas 1) with > As a result, Luma has focused on expats by offering attractive insurance packages - Expats can also choose to receive treatment in certain countries in Europe - Offices are staffed with multi-lingual speakers e.g. 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 Roland Berger Luma > There is an increasing expat population in Thailand, especially among the Chinese, which doubled in size from 2011 to 2016, with the average expat's income increasing by 28k USD in 2018 > The increasing attractiveness of Thailand for expats would lead to more demand for expat health insurance and boost Luma's performance 20200525_MGA model evolution Asia_vf.pptx | 35#36D. RB perspectives and key questions X- + Roland Berger#37Roland Berger MGA model is now getting traction in Asia while key developments drivers still remains "in the making" Source: Roland Berger 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 ? 20200525_MGA model evolution Asia_vf.pptx | 37#38In case you have further interest... Roland Berger Laurent Doucet Partner +852 6895 7769 [email protected] 20200525_MGA model evolution Asia_vf.pptx | 38#39Roland Berger THINK:ACT