Without legacy systems to drag down their efforts, companies in emerging market—and China, in particular—may be poised to outpace U.S. and European counterparts developing InsurTech innovations.

Unencumbered by legacy systems, technology innovators in emerging markets are often able to create new solutions faster, Willis Towers Watson suggests in its Quarterly InsurTech Briefing for the third-quarter 2017, published by the global advisory and brokerage firm in collaboration with CB Insights.

The emerging markets businesses are also able to attract intellectual and financial capital from partnerships unseen in developed, heavily regulated countries with high penetration of insurance products.

“And both technology and business models are exportable,” said Rafal Walkiewicz, CEO of Willis Towers Watson Securities, in a video introducing the reports main ideas.

China, he said, is the world’s third largest insurance market. And the “Chinese insurance revolution has led to both new mainstream products and new distribution models. Tech giants are making further waves with new digital distribution platforms like Taobao Insurance,” he said.

The report describes Taobao Insurance as the insurance distribution platform of Taobao, which is Alibaba’s e-commerce platform, explaining that booming e-commerce in China is creating demand for new nonlife products, such as product return insurance.

Retailers in China had not historically offered free shipping for product returns, but growing e-commerce activity fueled the need for a free-return policy reimbursing merchants for shipping costs, providing added security to consumers that would increase sales. Taobao, established a partnership with Chinese insurer Huatai P&C, to introduce the first free-return shipping insurance product in China. According to the report, Huatai P&C was able to leverage data from Taobao’s historical e-commerce transactions to develop a pricing model, which is further supported by the insurer’s risk management capabilities.

In 2016, the total e-commerce market in China grew 31 percent to exceed $700 billion, the report said, noting that increasing mobile penetration and a continued transition of retail sales to e-commerce will continue the growth trajectory.

Taobao Insurance now offers a variety of insurance products to Taobao’s large customer base, which includes 529 million monthly active users through partnerships with more than 40 insurers in China, including Ping An, Taikang, AIG China and others. According to Willis Towers Watson, products include motor, A&H, travel, property and life insurance.

The report also refers to the role that Alibaba played in forming Zhong An, China’s first online-only insurer established in 2013 by Ping An, Tencent and Alibaba in 2013. Zhong An is now one of only four companies nationwide in China to receive a license from the CIRC to sell insurance products online.

Zhong An, which also distributes free-return insurance through Taobao and Huatai P&C, offers more than 240 niche products. All are distributed digitally, mostly through the online platforms of the company’s many ecosystem partners, the report says.

Zhong An has raised over $2.4 billion of capital to date, including its recent $1.5 billion IPO on the Hong Kong Stock Exchange (at a valuation in excess of $10 billion) in September 2017 and its $931 million Series A round funded by several private equity investors in 2015.

At one point, the report also notes that Chubb is repositioning its China strategy, beginning with its long-term preferred provider distribution agreement established in 2016 with Suning Commerce, the third largest e-commerce company in China.

Overall, the report demonstrates that InsurTech investment continues to increase in Emerging Asia. Although total InsurTech funding volume fell 68 percent to $312 million in the third quarter of 2017, compared to a record level of $985 million tallied by CB Insights for the second quarter, 48 property/casualty and life/health transactions in the third quarter represented the third most transactions completed in any quarter to date—and six companies in Emerging Asia, including three companies in China, raised capital during the third quarter.

Hong Kong-based insurance comparison platform CompareAsiaGroup’s $50 million round was the largest transaction in the third quarter.

The three China-based start-ups raised capital in the third-quarter, which was more than any country outside of the U.S. They included an online distribution platform leveraging big data to personalize group insurance products for small to midsized employers, a medical insurance platform for critical illness and a software provider that uses blockchain to streamline underwriting processes and manage risks for commercial and personal insurers.