Editorial by Hugh Terry
Defusing China’s demographic timebomb
This month’s China in Focus looks at the challenges facing China about how to deal with its rapidly ageing population.
This is not a unique scenario. Every OECD nation and a number of the more mature developing economies face the problems that come with an ageing population. Fewer workers must support the social security and healthcare systems as the demand for these networks steadily increases.
China’s deficit is made more acute by the convergence of three influences: the legacy of the one-child policy reducing workforce replacement rate; a shortfall in the state pension system; and a shift in society away from caring for elderly family members towards pursuing a career.
With these in mind, we look at opportunities for the use of annuities as a stage to provide private retirement income. We also take a look at how the internet of things is integrating with healthcare systems to reduce acne conditions. Businesses like Dr Brain (Alzheimer’s monitoring) and Sonova (3D printed custom hearing aids) are making headway. Insurers including Taikang, Union Life and China Life are investing in retirement communities that integrate these new technologies into their properties to offer healthcare support to their tenant populations.
The first InsurTech of the month is Chengdu MeiMei, which has developed a range of medical devices that incorporate an ear thermometer, glucose meter, ECG meter and full-body scan. The company is working to improve its data mining in order to prevent acute conditions such as cardiac arrest by identifying early warning signs.
Beijing-based Bihubao is the second InsurTech of the month. This startup is focusing on automating workflow for insurance agents to provide better, more tailored tools and prevent misselling of products. It is extending coverage into tier two cities previously only covered by government-backed schemes. It has also become the administrator for Alibaba’s Xianghubao critical illness scheme.
Our spotlight is on the tech that is being used to predict and prevent loss from a natural disaster: earthquakes. China’s inner provinces are regularly devastated by earthquakes and yet insurance penetration is low.
A network of 15,000 observation stations is being deployed as an early warning system. But insurance is being used as part of the programme to improve reparation to these low-income communities which typically have to wait for central government aid to pass-through.
Enjoy the edition!
The Digital Insurer