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Chinese insurers pulling back on Covid cover as restrictions lowered

16th December 2022 - Author: Kassandra Jimenez-Sanchez

Chinese insurers are withdrawing coronavirus policies from sale as they try to avoid huge payouts amid a nationwide surge of cases following the relaxation of Covid restrictions in the country.

coronavirus-covid-pandemic-virusAccording to online news platform Quartz, Chinese media has reported that numerous low-cost coronavirus policies that were popular among consumers are no longer available for sale on major online marketplaces.

As of December 13, 2022, only one Covid-specific insurance policy was still available for purchase on the major platforms, the 21st Century Business Herald reported. This information was also republished by the state media outlet Securities Times.

This particular policy was 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). The coverage also included 100 yuan per day of hospitalisation due to an infectious disease.

But according to the Financial Times, the low-cost Covid policies offered by Alibaba have been removed from its current product offering. Other previously available Covid-related policies, including those offered by Waterdrop, the largest third-party insurance platform in China, have also been removed from listings.

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As coronavirus cases surge in China, insurance companies appear to be fearful of the financial stress ahead – especially from policies sold that promised payouts of thousands of dollars for confirmed Covid cases.

A former senior Chinese infectious diseases official has predicted that as much as 90% of the country’s population will eventually be infected by Covid, Quartz reported.

“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.

As low-cost Covid policies are being pulled, insurers have been urged by the state insurance regulatory body, China Banking and Insurance Regulatory Commission, to quickly develop affordable insurance policies to cover medical costs related to serious illness and death from Covid.

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