Chinese insurers are getting nervous about the country’s covid surge

Previously popular, low-cost policies promising payouts for covid infections are no longer available as cases soar

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A fever clinic in Shanghai, China
A fever clinic in Shanghai, China
Photo: via Reuters (Reuters)

Chinese insurance companies are pulling covid policies from online shelves as they scramble to avoid potentially crippling payouts amid a nationwide surge of coronavirus cases.

According to Chinese media reports, numerous low-cost coronavirus policies that were popular among consumers are no longer available for sale on major online marketplaces.

An article (link in Chinese) by 21st Century Business Herald and republished by the state media outlet Securities Times noted that as of Tuesday (Dec. 13), only one covid-specific insurance policy was still available for purchase on the major platforms.


That particular product is sold on Alibaba affiliate Ant Insurance’s platform and underwritten by the state-owned People’s Insurance Company of China, with a monthly premium of 2.61 yuan (37 cents) and coverage that includes 100 yuan per day of hospitalization due to an infectious disease, according to the article.

Other previously available covid-related policies, including those offered by leading Chinese online insurance platform Waterdrop, have also been removed from listings, according to Chinese media reports (link in Chinese) and the Financial Times.


No longer “small probability events”

With a former senior Chinese infectious diseases official predicting as much as 90% of the country’s population eventually being infected by covid, insurance companies are likely fearful of financial stress ahead — especially from policies sold that promised payouts of thousands of dollars for confirmed covid cases.


“The areas where insurance can make a difference must be small probability events. When the rate is too high, a confirmed case cannot be an event that receives a pay out,” He Xiaowei, director of the Department of Insurance at the University of International Business and Economics, told 21st Century Business Herald.

Meanwhile, there are reports of already-insured covid patients in China who are struggling to claim insurance payouts for their infections.


One woman told the state agency China News Service that she had purchased an insurance policy this spring promising a payout of 20,000 yuan in the event of a covid infection.

After testing positive with a rapid antigen test at home this week, she tried to file her claim, but was told she had to provide hospital-approved certificates showing a positive nucleic test result, details on whether her case is mild or severe, and original chest X-rays and blood tests, according to the news report.


But with testing systems overrun and medical systems under strain, she’s unsure if she will be able to get the required documents from a hospital, she told the news agency (link in Chinese).

At the same time as low-cost covid policies are being pulled, the Beijing branch of the state insurance regulatory body, China Banking and Insurance Regulatory Commission, has urged insurers (link in Chinese) to quickly develop affordable policies to cover medical costs related to serious illness and death stemming from covid.