Health insurers are entering the medical and care sector in several ways to boost value and to raise their competitive edge.
The insurers include names like China Life , Ping An, China Pacific, Taikang and New China. In integrating medical insurance with the healthcare sector, the steps taken by insurers include investing in equity in the healthcare industry, building hospitals, entering the online medical sector and investing in eldercare homes.
Investing in equity in the healthcare industry
In 2015, Taikang Life teamed up with Tianjin-based traditional Chinese medicine and healthcare company Tasly Holding Group to launch a China healthcare fund with CNY5 billion (US$784 million) in total capital commitments. The Tasly Healthcare Industry Fund seeks investment opportunities in fields like hospitals, medical equipment, diagnostics, nutritional products and supplements, as well as innovative projects in remote healthcare, mobile Internet-based services and healthcare data.
In April this year, the CBIRC approved the acquisition of a 51.56% stake by Taikang in the Baibo Dental Group for about CNY2.06 billion.
In 2016, China Life announced the establishment of China Life Healthcare Investment Fund, which was the largest such private equity fund in the country. Its size stood at CNY5 billion at the end of last year.
Establishing strategic partnerships through direct investment has become a major investment tactic for insurance giants. For instance, five companies controlled by the Shanghai-based conglomerate Fosun Group acquired a combined 5.01% stake in New China Life. Global insurer Allianz set up a joint venture with China Pacific Insurance (CPIC) in the Shanghai Free Trade zone to offer health cover in China.
Building hospitals
Building their own hospitals is also seen as a key for insurance companies to gain in medical management, health management, and claims risk control.
Chines insurance majors are building their own general and specialist hospitals and are striving to advance their claims payment services.
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In 2017, Taikang broke ground with Singapore’s mainboard-listed IHH Healthcare (IHH), for the CNY1.36 billion Gleneagles Shanghai Hospital. Located in Shanghai New Hongqiao International Medical Centre, Gleneagles Shanghai is a 450-bed multi-specialty general hospital.
In January 2018, Taikang built Taikang Southwest Medical Centre in Chengdu, which can fully link domestic and foreign direct payment systems.
New China has established health management centres in more than 10 Chinese cities such as Xi'an, Wuhan, and Qingdao.
Entering the online medical sector
Insurance companies are implementing online medical services through the Internet, which is an important channel for transforming network resources into insurance customers.
Ping An's Good Doctor online healthcare platform delivers healthcare services such as online family doctors and health mall services through mobile devices. It has a nationwide network of healthcare service providers covering 3,100 hospitals, 1,100 health check-up centers, 500 dental clinics and 7,500 pharmacy outlets.
Investing in eldercare homes
At least 10 Chinese insurance companies, including China Life, China Pacific, Taiping, New China Life, and Taikang, have invested in elder care businesses. They leverage these to promote health insurance and pension insurance.
For instance, Taikang is establishing eldercare homes in cities like Beijing, Shanghai and Guangzhou, using a community+hospital model.
This first appeared on Asia Insurance Review's eWeekly China. If you are keen to tap one of the world's leading insurance markets, subscribe here.