Big Data and other forms of digital technology will shake up the huge Chinese insurance market, according to S&P Global Ratings.

Successful utilisation of these technologies will separate the winners from losers in an increasingly competitive sector, the ratings agency says in a new report.

“We believe technology will disrupt traditional insurance business models.

“New technologies will shape the direction of insurance companies in areas of distribution, pricing and claims administration.

“Digitalisation, Big Data analytics and access to multi-distribution channels will increasingly dictate the future of China’s insurance marketplace.”

Big Data is one area in which the biggest Chinese insurers have invested heavily.

They already use popular mobile platforms such as WeChat to support policy sales and claims handling.

The use of Big Data will further accelerate, because China already boasts one of the largest pools of consumers who use mobile devices to pay bills and manage financial services.

“As a result, the pool of data on financial customers is ever-expanding,” S&P says.

“Chinese insurers can use this data to improve customer services, enhance cross-selling, pinpoint marketing efforts and better understand the needs of policyholders.”

Major insurers continue to dominate in property and casualty, with a combined market share of almost 60%, led by PICC Property and Casualty Insurance on 34%.

But smaller insurers still have a chance, if they have the right formulas.

“Speedier product customisation, coupled with precise or targeted geographic outreach, should allow mid-tier insurers to stay relevant within China’s underpenetrated insurance industry,” S&P says. “The country’s increasingly affluent population will provide an abundance of growth opportunities for the still young insurance industry.”