Waterdrop Chief Actuary Hui Teng: Good Products and Services Are the Underlying Logic of High-quality Transformation for Health Insurance
BEIJING, Dec. 21, 2022 /PRNewswire/ — At the recently held 2022 China Insurance and Aged Healthcare Forum, Hui Teng, Chief Actuary of Waterdrop Inc., was invited to give a speech titled Good Products and Services Are the Underlying Logic of High-quality Transformation for Health Insurance. He shared Waterdrop’s innovative practice in the high-quality transformation of health insurance products and discussed the future of China’s health insurance market.
Hui Teng said, the growing health insurance market has seen bottlenecks like homogeneity of products and services and lack of innovation. By type:
1. Critical illness insurance. Customers show a low willingness to buy critical illness insurance mainly due to high premiums, under leverage, low coverage, inadequate coverage of unhealthy people, and lack of innovation.
2. Medial insurance. Medical insurance provides a wide range of protections, but as product innovation approaches the ceiling, the focus is gradually shifted to micro innovation, and there is a price shock from “Huiminbao” Insurance. Improvements can be made in the fields of expensive drugs and innovative therapies.
3. Care insurance. Existing care insurance products are intended for wealth management more than protection, but the real demand for care services is unattended, and service standardization and accessibility need to be improved.
Hui Teng believed that good insurance products and services will be the core and foundation of future development for the health insurance market. A good insurance product or service shall have six elements: 1. a certain customers base to cover enough population; 2. an acceptable price; 3. the ability to meet particular needs of certain groups; 4. convenient purchase channels; 5. the ability to address customers’ pain points; 6. well-developed supporting services to make customers feel satisfied.
Hui Teng said, methods to create good products and services include three “expands” (expand coverage of customers groups, coverage of disease types, and services) and two “lowers” (lower threshold and price).
Expanding coverage of customer groups addresses the bottleneck of the user base. Existing health insurance products in China mainly target healthy people and the young and middle-aged. Given that population aging is accelerating, and there are 0.3 billion diseased population and 0.3 billion new citizens, we could expand the coverage of future insurance products from healthy population to diseased population, from juvenile, young and middle-aged groups to the seniors, and from urban population to the submerged market.
Expanding the coverage of disease types serves to address the pain points of customers. Critical illness insurance products in the future shall cover not only severe illnesses but also other disease types. In addition, the insurance products could adopt approaches that are perceptible to users and not rely on the definition of illnesses, such as disability insurance. Illnesses with high underwriting risks, geriatric diseases, and mental illnesses may imply a huge room for the health insurance market.
Expanding services deals with the sense of gain for customers. Health insurance shall provide not only compensation for losses but also services. In addition to fast and satisfactory compensation, the products shall satisfy people’s needs for medical resources and services. Health insurance can engage deeply in the processes of diagnosis, treatment, medication, and rehabilitation.
Lowering the threshold addresses the accessibility of insurance products, including relaxing access conditions (without lowering the underwriting standards), focusing on the aged and micro and small insurance, and making uninsurable risks insurable.
Lowering prices could make insurance products more inclusive. Instead of lowering the price in absolute terms, it means increasing the cost performance through the design of the insurance form and the innovation of insurance content. We could also make the payment method more flexible, by changing annual payment to monthly payment, for instance.
Hui Teng introduced some attempts of Waterdrop in creating good products and services. In terms of good products, this year, Waterdrop launched Waterdrop Blue Ocean, the industry’s first customized critical illness insurance product with a waiver on health declarations. The product features a wider coverage of illnesses, a more affordable premium, and a lower threshold so that it can effectively reach people with pre-existing medical conditions, the elderly, and new citizens. The product also offers a mini version that highlights the “lower threshold”, and million-yuan medical insurance with no deductible.
As to good services, Waterdrop connects online and offline services. In September, it launched Bangbangpei, a product for one-stop claims settlement with eight claims assistance services and four claims settlement tools. In November, Bangbangpei initiated a pilot offline to provide online and offline-linked claims assistance services. Waterdrop also connects insurance with health management, providing diagnosis, treatment, medication, and rehabilitation services to give users a better experience.
About Waterdrop Inc.
Waterdrop Inc. (NYSE: WDH) is a leading technology platform dedicated to insurance and healthcare service with a positive social impact. Founded in 2016, with the comprehensive coverage of Waterdrop Insurance Marketplace and Waterdrop Medical Crowdfunding, Waterdrop aims to bring insurance and healthcare service to billions through technology. For more information, please visit www.waterdrop-inc.com.
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