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Short-term health insurance in China

Health insurance is booming in China, creating an opportunity in short-term business for non-life insurers.

Short-term health insurance is emerging as a new growth driver of China's property and casualty (P&C) insurance industry, attributed to rising risk awareness of health resulting from COVID-19. Total health insurance premiums reached CNY 707 billion in 2019, a 25% average annual growth rate from CNY 31.2 billion in 2005¹. For non-life insurers, the growth in short-term health insurance premiums was 44% annually in this period, including 47% year-on-year growth to CNY 84 billion in 2019 alone, the fastest of all business lines for P&C insurers. The segment's share of total non-life premiums continued to grow, reaching 6.5% (2018: 4.8%). The growth drivers include increasing demand, advances in Insurtech, and P&C insurers' diversification from motor to non-motor business.

This Expertise Publication provides insights into the market risk landscape, challenges and opportunities facing non-life insurers that operate short-term health business. The research explores challenges including high committee fees, homogeneous products and dependence on third-party platforms to access clients. It interviews senior executives and practitioners in the health insurance industry value chain, including from insurance companies, online platforms, third-party management service providers, pharmaceutical companies and hospitals. The report is available in Chinese only.

The findings indicate that P&C insurers will outperform life insurers in the short-term health insurance (mainly medical business) market in China. Short-term health insurance is expected to account for 20-30% of the estimated CNY 2 trillion health insurance premiums in China by 2025, according to a January 2020 regulatory paper on the development of insurance in service sectors. The report analyses the drivers of this opportunity for non-life insurers, including supportive polices, increasing consumer demand for health insurance, flexible product strategy by P&C insurers (such as one-year policy terms to avoid bias in assumption and pricing), digitalisation and the growth of China's middle class.

The report has three parts. The first introduces short-term health insurance as a new growth driver for P&C insurers, given the challenging environment for motor business. The second provides a panoramic analysis of short-term health insurance products, services, channels and Insurtech. The third discusses the growth prospects of short-term health insurance by market size, market position, target customer groups, development models, digital platforms and ecosystem construction. This research is a joint collaboration between Swiss Re Institute and Swiss Re P&C Solutions.

 

¹2005 is the first year in which non-life insurers have data on short-term accident and health business since they were permitted to write such lines in 2003.

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lifeinsurance insurance insurancesolutions china healthinsurance propertycasualty

expertise publication 助力“健康中国 2030” —聚焦中国财产险公司短期健康险发展

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