In this Nov 22, 2019 file photo, a visitor experiences Ping An Good Doctor's one-minute diagnosis service during a healthcare industry exhibition in Zhengzhou, Henan province. (LIU XU / CHINA DAILY)

Chinese insurers are expediting their efforts to explore business opportunities in the healthcare sector, betting on surging demand from a growingly aging population.

People invest the most in three sectors -education, health and endowment. The last two belong to "Big Health", which means it will be a huge industry. Insurers need to adapt to the change and develop health services and elderly care services that meet demand.

Chen Dongsheng, chairman and CEO of Taikang

Ping An Insurance (Group) Company of China Ltd, China Life Insurance (Group) Co and Taikang Insurance Group are among the insurance majors that have developed a complete medical and healthcare business network.

Not to be outdone, small and medium-sized insurers such as Foresea Life Insurance have built nursing homes.

Emerging internet-based insurers such as ZhongAn Online P&C Insurance Co Ltd, which runs its own online hospital, have also expressed interest in the healthcare segment, according to a report in China Securities Journal.

"Insurance companies have become investors in the health industry, payers of medical services and participants in critical illness prevention and management," said Zhou Yanli, former vice-chairman of the China Insurance Regulatory Commission at a forum in Beijing in August.

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With the annual growth rate of Chinese commercial health insurance reaching a high 30 percent on average, insurance, together with upstream and downstream institutions of the health industry, have focused attention on integrated development, he said.

Sui Ye, partner of consultancy Roland Berger, said it has become a trend for insurance companies to diversify into healthcare. "For one, the segment is growing rapidly and changing. For another, it can be a new growth engine for insurance and other finance businesses," he said.

About 15 to 20 percent of new financial clients of Ping An Insurance are from its medical business every year.

Clients using its medical services sign 3.1 financial contracts each with the company on average, and their average assets under management reach about 10,000 yuan (US$1,486) per person.

The corresponding figures are 2.0 and 5,600 yuan respectively for clients not using its medical service, the company said at its investors' forum in late September.

Ping An Good Doctor, a leading online health service provider and a subsidiary of the group, claims it has 346 million users, and earned a revenue of 2.75 billion yuan in the first half of this year, up 21 percent year-on-year.

It said it can offer diagnosis and treatment for more than 3,000 common diseases. Its services were backed by about 10,000 doctors nationwide. Daily consultancies reached 830,000.

Fang Weihao, CEO of Ping An Good Doctor, said at the event that the firm has developed new private doctor services to target individuals and families. Its video and audio inquiry and diagnosis function will help match patients with the doctors concerned quickly, thus improving efficiency of the system.

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Besides online health services, the insurer offers offline medical services, health, life and endowment insurance. It operates a medical technology research institute, which has more than 10 billion pieces of clinic data.

The company invested 1 percent of its annual revenue in research and development of innovative technology, a large part of which is in the medical sector.

Chen Xinying, co-CEO of the group, said the scale of the medical and healthcare market is expected to surge from 6 trillion yuan in 2019 to 16 trillion yuan in 2030.

The sector enjoys big demand from multiple factors and has benefited from favorable policies and regulation environment in China, Chen said, adding it also helps to offer various and differentiated products for its insurance clients.

The medical sector is a core part of our long-term strategy. We hope to seize new opportunities in the market, create greater value and contribute to the building of Healthy China, by developing a complete medical services system.

Chen Xinying, co-CEO of Ping An Good Doctor

"The medical sector is a core part of our long-term strategy. We hope to seize new opportunities in the market, create greater value and contribute to the building of Healthy China, by developing a complete medical services system," she said.

With the number of newborns decreasing and the old increasing, the demographic structure will change, which will pose challenges to the Chinese society and economy, but it also suggests great business opportunities, experts said.

When average longevity increases, everyone is likely to live longer but may also contract various diseases. The challenge in routine health management and postoperative rehabilitation nursing will be enlarged, so that the insurance industry, as a supplier of risk security for life, can play a role, Taikang Insurance said.

"People invest the most in three sectors－education, health and endowment. The last two belong to 'Big Health', which means it will be a huge industry," said Chen Dongsheng, chairman and CEO of Taikang, at a forum in June. "Insurers need to adapt to the change and develop health services and elderly care services that meet demand."

Taikang has built elderly care communities in 19 cities, and medical centers in several major cities across China. It also made equity investment in medical institutes such as Bybo Dental Group and Harmonicare Medical.

Although the exploration of Big Health business may not give quick or high returns, Chen thinks such investment can bring a stable cash flow in the long run.

Clients can purchase its life insurance and annuity products while living in its elderly care community. They can also buy health insurance and receive treatment at its medical institutes.

Chen said it expects to serve 30 million Chinese families with an annual income of 500,000 yuan, not just high-end clients, and explore a larger market.

One way is to decrease operational costs of elderly communities by developing chain management and introducing advanced technologies like artificial intelligence, he said.

Jiang Xinwei, an analyst at consultancy Analysys, said clients of the medical and financial businesses are highly correlated.

That is why, major finance companies have ramped up efforts to retain clients and stimulate consumption by innovating services. This is unlike merely providing finance, medicine and healthcare in a stand-alone way.

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As world-class medical services at a mass level are still in short supply in China, insurers with medical resources will help make the field strong and competitive, which should help build a highly recognized brand, she said.

Sui from Roland Berger said as the Chinese medical and health sector is under unprecedented transformation, driven by high value-added service and digitalization, insurance companies can play a role in hospitals' management, human health management, drug services and internet medical care.

chenmeiling@chinadaily.com.cn