On March 22, the Insurance Association of China released China's first commercial health insurance development index. The index surveyed 36 large and medium-sized cities, with respondents being residents aged 20 to 54. The survey results showed that China's commercial health insurance development index was 60.6, at the lower end of the basic level. Huang Hong, Vice Chairman of the China Insurance Regulatory Commission (CIRC), said at the index release that China's commercial health insurance remains at a relatively low level globally in terms of both depth and density; from another perspective, this also shows that China's commercial health insurance has huge development potential and broad prospects. In addition, Huang Hong revealed that the CIRC is revising the “Administrative Measures for Health Insurance.”
China's commercial health insurance development index is composed of two dimensions—health and insurance—covering 6 first-level indicators, 13 second-level indicators, and 34 third-level indicators, evaluating residents' awareness, adequacy, and planning. The index scores show a trend of gradually decreasing from east to west and from south to north, which is basically consistent with the distribution of per capita income and per capita GDP in China. Among them, East China scored highest at 61.8, while Northeast China scored lowest at 58.9.
By employer type, employees of wholly foreign-owned enterprises, joint ventures, and representative offices scored highest on the commercial health insurance development index, reaching 65.6. Self-employed individuals and people without an employer scored lowest, at only 55.8 and 54.6 respectively, a gap of more than 10 points. In addition, it is worth noting that the commercial health insurance development index for private enterprises was 61.7, lower than the levels of public institutions (63.6) and state-owned enterprises (63.5).
By gender, men and women both scored 60.6 on the commercial health insurance development index, but with different emphases. Women scored higher than men on all health-related indicators, but on protection-related indicators, women lagged behind men in both protection adequacy and protection planning.
By age, residents aged 30–39 scored highest on the commercial health insurance development index, at 64.7. Scores for residents under 30 declined as age decreased, and among them residents aged 50–54 scored lowest, at 53.1.
In addition, Chinese residents' commercial health insurance development index scores showed upward trends with increases in education and income, respectively. By education, residents with a master's degree or above scored highest at 67, while residents with a high school education or below scored lowest at 52.4, a gap of 14.6 points. By income, residents with annual personal incomes of RMB 200,000 (inclusive) to RMB 500,000 and RMB 500,000 (inclusive) and above scored highest, at 69.7 and 68.2 respectively, while residents with personal incomes below RMB 30,000 scored lowest, at only 52.8.
Xu Jinghui, Chairman of China Pacific Life Insurance Co., Ltd. and a member of the CIRC's Expert Committee on Major Decisions, said when interpreting China's commercial health insurance development index that the survey found health-related indicator scores were all higher than protection-related ones, indicating that residents generally attach great importance to health issues but do not yet have sufficient awareness of insurance and have not realized that health insurance is actually a powerful tool for promoting health. CIRC Vice Chairman Huang Hong said that for commercial health insurance to achieve soaring and rapid development, it is necessary to strengthen top-level institutional design and policy guidance and integrate it with the national “healthcare reform” policy. Huang Hong pointed out that commercial health insurance differs greatly from property and life insurance in product actuarial work, risk management, and operating patterns; it involves a wide range of fields and demands high professionalism. This requires commercial health insurance to emphasize data accumulation and analysis, strengthen the building of professional talent teams, enhance exchanges and coordination with health-related industries, and advance the informatization level of commercial health insurance.
CIRC Vice Chairman Huang Hong said that since the “Twelfth Five-Year Plan” period, China's commercial health insurance has been the fastest-growing business segment in the entire insurance industry. From 2010 to 2016, direct premium income grew rapidly from RMB 69.172 billion to RMB 404.25 billion, a 4.8-fold increase; the share of health insurance in life insurance premium income rose from 6.37% to 18.18%, and its share of the entire industry's premium income rose from 4.66% to 13%; health insurance claim payments grew from RMB 26.402 billion to RMB 100.075 billion, a 2.8-fold increase; health insurance depth rose from 0.17% to 0.54%; and health insurance density rose from RMB 50.5 per capita to RMB 292.3 per capita. A senior health insurance industry insider told The Paper that, by conservative estimates, Chinese residents' medical expenses will exceed RMB 8 trillion by 2020; assuming medical insurance covers half, the remaining RMB 4 trillion represents the space for health insurance. Zhu Jinyuan, President of the Insurance Association of China, said that while health insurance business is growing rapidly, it is also necessary to examine whether health insurance has achieved good matching and coordination with public health. As an important pillar of the medical security system, commercial health insurance needs to further leverage its scalable and targeted characteristics and advantages.
Source: The Paper April 7, 2017