Insurance: Health Insurance Business Risks Cannot be Ignored

Recently, the China Banking and Insurance Regulatory Commission announced the operation data of the insurance industry in 2021. In the case of negative growth of property insurance and life insurance, the premium income of health insurance increased by 3.35% year-on-year, adding a bright color to the insurance industry in 2021.

In 2021, a number of favorable policies will be introduced to support commercial health insurance to play a greater role in the multi-level medical security system. Whether it is property insurance or personal insurance companies, health insurance is an important focus.

The data shows that in 2021, the health insurance premium income of property insurance companies will increase by 23.7% year-on-year, and the health insurance premiums of life insurance companies will increase slightly by 0.14% year-on-year under the condition of negative overall premium growth.

Industry insiders believe that health insurance actively responds to the impact of the epidemic, continuously innovates product forms, and has more prominent protection attributes. At the same time, it embraces new technologies and deepens transformation and upgrading, showing strong development tenacity.

However, according to data from the China Banking and Insurance Regulatory Commission, in 2021, health insurance compensation expenses will increase by 37.91% year-on-year.

Compared with the 3.35% increase in premiums, the business risks of health insurance cannot be ignored, and the profitability cannot be optimistic. If health insurance claims continue to grow faster than premiums, insurers will be overwhelmed.

Especially the short-term health insurance carried out by some property insurance companies, the current comprehensive cost rate remains high.

Specific to the business risks of various types of insurance, in 2021, the rapidly developing "people-friendly insurance" business in various places will not be underwritten and some will implement a flat rate.

It cannot be ruled out that in some places, the project sustainability may be caused by the adverse selection of the insured. Under pressure. Some local government departments have also set minimum business compensation level requirements, and insurance companies are likely to suffer losses.

The long-term medical insurance with adjustable rates is in the early stage of development, and it has insufficient ability to manage and control risks such as medical expense inflation, selective surrender, and excessive medical treatment faced by insurance types.

Commercial long-term care insurance business is small and lacks effective risk management and operating experience.

This also reminds insurance companies to pay special attention to the sustainable development of health insurance, and to pay more attention to the stability of operations, such as whether the pricing basis is reasonable and whether the choice of risk targets is prudent.

At the same time, striving to achieve information sharing with medical institutions, expanding the insured population and insurance stickiness, and exploring the formulation of commercial insurance catalogues have become effective ways to solve the risk problems of health insurance business.

At present, the establishment of a unified commercial insurance catalog has become an industry consensus. Zheng Bingwen, director of the World Social Security Research Center of the Chinese Academy of Social Sciences, once said that the establishment of a commercial health insurance catalog is a breakthrough in promoting the level of health insurance financing, and a key starting point for the establishment of a multi-level medical service system and a multi-departmental coordination mechanism.

It is understood that in May 2021, the Insurance Association of China took the lead in launching the research on the "Standard Formulation and Long-term Development of Commercial Health Insurance Catalogue", and the relevant results will be released this year.