Billionaire Jack Ma’s Ant Financial has done more than perhaps any company to disrupt China’s gargantuan banking and asset-management industries. Now it’s trying to re-imagine health insurance.
Ant’s Xiang Hu Bao, which means mutual protection, has attracted 50 million people since its October inception, or more than five times the population of New York City.
The product operates somewhat like a collective, in which members contribute evenly to payouts of as much as 300,000 yuan (RM183,947) when a participant falls critically ill. It’s free to sign up, there are no premiums or upfront payments, and disputes about claims are adjudicated by volunteer members, according to a statement from the company on April 11. In return for managing the process, Ant will take an 8% administrative fee out of every payout.
Ant, best known for the Paypal-like Alipay service that underpins Alibaba Group Holding Ltd’s online shopping platform, is re-designing financial products from money market funds to consumer credit that have long been dominated by state-owned Chinese behemoths. The company’s foray into healthcare comes at a time when the country is grappling with a rapidly aging population, one of the more pressing long-term threats to the world’s second-largest economy. Ant said on April 11 it hopes to sign up 300 million Xiang Hu Bao users within two years, which would represent more than 20% of China’s population.
Ma’s company joins a raft of startups angling to disrupt old-school health insurance in China, including Tencent Holdings Ltd and Sinovation Ventures-backed Waterdrop. Beijing-based Waterdrop crowdfunds from 78 million users and paid out more than 95mil yuan (RM58.24mil) to members in the four or so months ended October, according to its website.
The products may help fill a yawning gap in medical protection for the world’s biggest population as its rate of critical illnesses soars, partly due to more expert diagnoses. As of April, almost a third of Xiang Hu Bao’s members hailed from poorer rural areas, while nearly half were migrant labourers.
Ant says Xiang Hu Bao isn’t an insurance product and thus isn’t subject to the same regulatory oversight governing traditional industry players like Ping An Insurance Group Co.
Anyone between the age of 30 days and 59 years can join, provided they meet basic health criteria. As more people participate, the costs of the plan are spread more widely. Given the growing user base, every member should pay no more than 0.1 yuan (6sen) for every critically ill person, according to Ant. It covers a list of no more than 100 ailments. If a dispute over claims arises, a jury consisting of hundreds of thousands of pre-approved users will vote on whether to pay out compensation.
Ant plans to leapfrog early adopters of the model by tapping the hundreds of millions of people that use its Alipay and money-market fund operator Yu’E Bao. Payments are deducted from users’ Alipay account on the 14th and 28th of every month, and anyone with a decent credit score can join.
To combat fraud, Ant is using the same blockchain technology that underpins digital currencies like Bitcoin, which rely on common verification by members. Members who fall critically ill within 90 days of joining the plan will not be compensated. – Bloomberg
But, do you know that actually, we in Malaysia have a similar concept as Xiang Hu Bao?
Introducing ” Life Engineering ” program, Malaysia first medical costs crowd sharing program. This program was launched on 2017 March 15th with more than 200 hospitals on the program panel. Now there are almost 3,000 people in the program.
In Life Engineering, your total maximum sharing is only RM50 per month; and in return, you can put up to RM1,000,000 in-patient hospitalization cost to share. If nobody falls sick in the program, then you and the community do not need to share a single cent.
In the last 23 months, only Four(4) cases have happened and each member of the community only need to share not more than RM70 over this whole period, to get a million ringgit coverage.
Note: there were more than 19 months where no one needs to pay a single cents.
Sharing the news from The Star Online : https://www.thestar.com.my/tech/tech-news/2019/04/11/millions-rush-to-join-a-wild-new-health-plan-from-jack-mas-ant/