Health Insurance Market In China Witnessing A Huge Boom Over High Premium Plan Demand

Posted on: Jan-2019 | By: MarketDeeper | Medical Care

Medicare has outpaced life insurance policies in China as the fastest-growing category of the industry as wealthy consumers try to fill the insufficient public coverage. The emergence of health insurance creates opportunities for an industry infested with scandals, symbolized by the bribery of the former head of the insurance scheme and the subsequent withdrawal of his agency from the banks. While major national groups such as Ping An and China Life are dominating, foreign players including Hong Kong-based AIA and AXA of France are seeking to take benefit of new market opportunities in China. From 2014 to 2017, growth in sales of the universal life insurance company, which only contained elements of nominal risk protection, boosted China's corporate debt growth.

Health insurance premiums increased 23% in the first 10 months of 2018 compared to the previous year, and in contrast with 2% for all insurance premiums, according to China's insurance regulator. At that rate, health insurance premiums will hit an unprecedented Rmb539 billion which makes around $78 Billion for the full year.

The performance has transformed a handful of unknown companies, including Anbang Insurance, into billions of dollars and prompted authorities to take financial risks. Since then, regulators have asked insurers to reorient products based on protection under the motto "insurance policy protection."

As the emerging middle class spends more on health, health insurance is poised for growth. As per the Ministry of Health of China, total health spending in 2017 reached Rmb5.16 billion, only 6.2% of GDP, in contrast to 7.6% in South Korea and 10.7% in Japan, respectively.

The fastest growing Chinese health insurance category is health insurance schemes that provide fixed-rate in terms of illness, but do not compensate patients for specific medical costs.