China’s health insurance market to grow five-fold by 2020

BEIJING - China’s private health insurance market will grow fivefold to RMB1.1 trillion (US$167 billion) by 2020, a report by Boston Consulting Group and Munich Re suggests, as the nation’s emerging middle class supplies it with fast-growing demand.

As wealthy Chinese look for alternatives to the public insurance system, private health insurance has been growing at a compound annual growth rate of 36% since 2010 and hit RMB 241 billion as of 2015, according to the report.

The fastest growth in the private health insurance sector is expected to be in reimbursement policies, which are more expensive but more flexible than the critical-illness policies that many Chinese have today, the China Daily reported.

Critical-illness insurance pays a lump sum if an insured person is diagnosed with a covered medical condition, while reimbursement insurance pays on an ongoing basis if a health problem requires multiple medical consultations or hospital visits.

"Private reimbursement insurance makes tremendous sense in China. There isn't yet a mass market for it because of the cost. But there is a lot of interest and we expect to see many new products in the next few years," said Luo Ying, a partner at BCG's Beijing office and a co-author of the report. www.webershandwick.cn (ATI).