Since 2017, the growth rate of China's health insurance has fallen from its peak. Although there was a brief recovery from 2017 to 2019, the downward trend has deepened since 2020, and the growth rate of health insurance has fallen to the freezing point of 2.4% in 2022. The industry is increasingly concerned about the development of health insurance. What is the problem of health insurance? Is it possible to return to high growth?
In recent years, the development of health insurance in China shows the characteristics of the following two aspects: First, the growth engine of health insurance switches, and short-term health insurance, mainly medical insurance, becomes a new engine. In the context of the overall downward growth rate of health insurance, the short-term health insurance operated by property insurance companies still maintained double-digit growth with an average growth rate of 23.8% in the past three years, while the growth rate of long-term health insurance operated by life insurance companies declined severely with an average growth rate of only 4.5% in the past three years. From the perspective of the proportion of incremental premiums, the growth engine of health insurance changed from long-term health insurance to short-term health insurance. Second, health insurance business is highly concentrated, and disability income and care insurance have been developing slowly for a long time. In recent years, serious disease insurance, million medical treatment, people's benefit insurance and other types of insurance have developed rapidly. In 2020, serious disease insurance alone accounted for 53.2% of the total premium of health insurance, disease insurance and medical insurance accounted for more than 98% of the total premium of health insurance, and disability income insurance and nursing insurance developed slowly, accounting for only about 1%.
Health insurance "engine" flared behind, hidden what mystery? In 2016, the development of health insurance ushered in a good policy opportunity period. From 2016 to 2020, China's serious disease insurance achieved rapid development, with the total premium income increasing from 152.8 billion yuan to 435 billion yuan. At the same time of rapid growth, the critical illness insurance market is gradually saturated. As of October 2021, the number of valid sickness insurance policies in China reached 636 million, covering 391 million people, of which the number of serious illness insurance policies was between 200 million and 300 million. So far, the stock market of serious disease insurance has been close to saturation, and entered the cultivation period of incremental market. While serious illness insurance stalls, medical insurance shows a trend of rapid development. In 2016, since the launch of the first million medical insurance in the industry, it has grown rapidly with the support of Internet channels with the characteristics of high insurance amount and low premium. Since 2020, urban benefit insurance, which links basic medical insurance, exempting health notification, unified pricing and low premiums, has been rapidly rolled out, becoming the second engine to promote the development of medical insurance. The pandemic has also played a role in the trade-off between critical illness and medical insurance. Under the impact of the epidemic, the travel frequency of residents has been greatly reduced, and the serious disease insurance expansion scenarios, which mainly rely on face-to-face sales by agents, have been greatly reduced, while the medical insurance products that rely on Internet sales have developed rapidly. At the same time, the epidemic has also led to a decline in residents' income expectations and more conservative spending. In the face of serious illness insurance and medical insurance with similar protection functions but huge differences in price and leverage, consumers are more inclined to purchase medical insurance. It is worth noting that the rapid expansion of medical insurance not only forms a substitution effect for serious disease insurance and occupies the development space of serious disease insurance, but also leads to the rapid decline of the average premium of health insurance, forming a vicious circle of "the faster the growth of medical insurance, the lower the growth of health insurance".
In the post-epidemic era, thanks to the alternating drive of critical illness insurance and medical insurance, the proportion of health insurance in China's insurance market continues to increase, and the penetration rate of insurance continues to deepen. However, due to the saturation of serious disease insurance, the impact of COVID-19, the decline in the number of agents and other factors, health insurance, especially serious disease insurance business, has fallen off a cliff, and the growth rate of health insurance has declined rapidly. In the long run, the era of high growth of health insurance is over, and medical insurance is expected to surpass serious disease insurance and become the largest type of health insurance. The integration of health insurance and medical services has become the development trend of health insurance.
