Global Insights , China Context





Opportunities for commercial insurance in China from perspective of UK model





China’s medical insurance system is facing three key issues, namely insufficient coverage, strained medical insurance funds, and low user satisfaction. It is impractical for China to adopt the US approach led by commercial insurance, but the introduction of commercial insurance as supplement is essential. Commercial insurance in China is now dominated by fixed benefit products with limited experience in operating medical insurance products. In this regard, the UK medical insurance model may inspire the Chinese market.

The UK health care system is centered on the National Health Services (NHS) led by the government, while commercial insurance generally covers medicines and treatment beyond the scope of NHS. Meanwhile, private healthcare service providers offer better environment and efficiency than their public counterparts. Generally speaking, the takeaway from the UK experience is that additional commercial insurance products designed for the middle class certainly can supplement public healthcare services in the coming years.

Commercial medical insurance is classified into personal insurance and corporate insurance. For the latter, companies in China will no doubt come to realize that a good insurance plan helps improve efficiency and thus are increasingly willing to provide insurance plans with good coverage and services to employees in the future. For personal insurance, the main consideration for maintaining commercial insurance lies in the desire for better private healthcare services and fuller protection than what is provided by the government. However, with the changing policy environment, higher market risks and moral hazards and less recognition of insurance in China, users have yet to understand that commercial insurance is more about obtaining better services instead of just getting compensation. Therefore, the market for personal insurance products is likely to develop at a speed lower than that of corporate insurance products in China.



To access full article, click here.