YuanBao Files for IPO: Bridging Insurers and Millions of Paying Users Through Tech-Driven Health Insurance

A 36-day hospital stay, three surgeries under general anesthesia, a burst fracture of the lumbar spine, a comminuted fracture of the calcaneus, and a comminuted fracture of the right femoral shaft—with the hospital estimating costs at 160,000 yuan, an ordinary family with savings of just over 10,000 yuan has seemingly no choice but to borrow money.

“After this incident, with the family truly out of funds, we had no choice but to borrow money from several relatives to cover the emergency costs, handing over each loan to the hospital as soon as it was received.” However, after paying the hospital’s treatment fees, Li Yun faced a new dilemma: how to repay the debts. Tossing and turning at night, Li Yun recalled a commercial insurance policy he had inadvertently purchased earlier—Yuanbao’s Million Medical Insurance.

With a tentative mindset, Li Yun called Yuanbao’s customer service hotline. To his relief, the representative did not impose the stringent requirements he had feared, but simply informed him of the documents to be mailed.

Half a month later, Li Yun received an insurance payout from Yuanbao Million Medical Insurance in his account. After reimbursement through the New Rural Cooperative Medical Scheme (NRCMS) and Yuanbao Million Medical Insurance, Li Yun’s out-of-pocket expense for the total medical costs of RMB 118,487.30 was reduced to just RMB 10,000, which corresponds to the deductible under the Yuanbao Million Medical Insurance policy.

Moreover, Li Yun only learned afterward that Yuanbao’s Million Medical Insurance supports advance payment of treatment costs. This means that during his hospital treatment, Li Yun actually did not need to borrow money from relatives.

Li Yun is not an isolated case among the beneficiaries of Yuanbao’s medical insurance.In fact, as an online insurance brokerage platform, Yuanbao Insurance Brokerage (hereinafter referred to as “Yuanbao”) has provided tens of millions of users with personalized and precisely matched health insurance products, along with services such as insurance consultation, convenient policy purchase, intelligent underwriting, and claims assistance.

Meanwhile, Yuanbao has also established in-depth collaborations with insurance companies such as Ping An Insurance, Taikang Insurance, China Life Insurance, PICC, and ZhongAn Insurance, launching personalized health insurance products tailored to user needs.

The founding team of Yuanbao comprises key members who graduated from prestigious institutions such as Tsinghua University, Peking University, the Chinese Academy of Sciences, and the Central University of Finance and Economics.

What caught VCBeat’s attention was that nearly all of Yuanbao’s founding team members had previously worked at NetEase.

For example, Fang Rui, founder and CEO of Yuanbao, has 17 years of work experience at NetEase: he formerly served as Vice President of NetEase Group and Head of the Group’s Technology Department, and founded NetEase E-commerce and NetEase Pay within NetEase, serving as their CEO.

Co-founder and Vice President Li Ying previously served as Vice President of NetEase’s E-commerce Division, where she accumulated eight years of experience in digital marketing.

Furthermore, many members of Yuanbao’s core management team hail from well-known Chinese internet companies and insurance firms.

The core members’ academic backgrounds and professional experiences have endowed Yuanbao not only with hard technical capabilities but also with soft skills such as team collaboration and industry judgment.

For example, regarding the choice of startup track, Li Ying candidly stated, “Yuanbao must find a track with thicker snow and a longer slope.”

This sector is internet insurance.

In 2011, by chance, Li Ying’s department at NetEase began to venture into internet insurance projects. During an exchange with an Australian insurance brokerage platform, the team discovered the immense development opportunities inherent in internet insurance.

However, regrettably, due to the immature market environment and technological limitations at the time, internet insurance projects did not achieve significant development within the NetEase ecosystem.

By 2019, when it came to choosing their entrepreneurial path, the founding team once again set their sights on internet insurance.

Factors such as the rise in national economic standards, the increasing maturity of the market environment, growing consumer awareness of insurance, and the development and widespread adoption of internet technology have created a favorable external environment for the growth of internet insurance. Meanwhile, as more “participants” enter the field, the maturity and diversity of internet insurance products are steadily improving, indicating that internal drivers are also continuously strengthening.

As it turned out, the founding team of Yuanbao made the right call.

According to Kaiyuan Securities, the gross written premiums for online life insurance grew significantly from 2012 to 2016, with a year-on-year increase reaching as high as 542%. From 2016 to 2018, the China Insurance Regulatory Commission (CIRC) issued documents to regulate the development of online life insurance, ushering in a period of painful restructuring for the sector. In 2019, gross written premiums resumed their growth trajectory. In 2020, amid the COVID-19 pandemic, public awareness of insurance further increased, bringing online insurance into a new phase of development.

Moreover, it should be noted that over the past five years, influenced by the delisting of products with short to medium durations and the development of internet-based health insurance business, the overall proportion of life insurance has gradually declined, while the overall proportion of health insurance has risen year by year, becoming one of the development trends in internet insurance.

Furthermore, Li Ying stated that although internet-based health insurance has achieved significant development in recent years, there remains a substantial gap compared with developed countries such as the United States, both in terms of depth and breadth. Looking at the history of insurance development in developed nations, the rapid growth of their insurance industries was inseparable from a key milestone: per capita GDP exceeding US$10,000. China reached this threshold in 2019.

Driven by macroeconomic factors, an aging society, and the three-child policy, China’s internet-based health insurance sector is poised for significant further growth.

AndYuanbao’s role is to help insurance companies identify users, assist users in finding suitable insurance products, and enable insurance companies to reverse-customize personalized health insurance products based on user needs.

Founded in 2019, Yuanbao encountered the outbreak of the COVID-19 pandemic in 2020. However, the sudden epidemic did not significantly disrupt the development pace of this startup. Instead, under the orderly arrangements of its management team, the company continued to advance in a steady and methodical manner.

Therefore, with the team’s strong collaboration and cohesion, coupled with the pandemic-driven awakening of public insurance awareness, Yuanbao entered a period of rapid growth.

VCBeat has learned that,Yuanbao has attracted millions of paying policyholders, covering 90% of regions across China. Its user base primarily consists of male professionals aged 25–45 who have established families. On the insurance front, Yuanbao has forged deep strategic partnerships with leading domestic insurers, including Ping An Insurance, Taikang Insurance, China Life Insurance, PICC, and ZhongAn Insurance. More importantly, Yuanbao has demonstrated strong fundraising capabilities, securing four rounds of financing shortly after its platform launch, with its Series C round alone raising nearly RMB 1 billion.

Yuanbao’s product positioning may be one of the reasons it has gained recognition from investors, insurance companies, and end-users.

It is reported that inclusive health insurance is Yuanbao’s product positioning. Centered on this positioning, Yuanbao has built a personalized and diversified product matrix “centered on user needs” to address the essential healthcare demands of the general public.

For example, Yuanbao has partnered with insurance companies to customize and launch a range of products, including Yuanbao Million Medical Insurance, Yuanbao Critical Illness Insurance, Yuanbao Inclusive Health Insurance, and Yuanbao Online Consultation and Medication Purchase Insurance. It also offers Yuanbao National Million Medical Insurance tailored for individuals in sub-optimal health conditions, as well as the elderly-friendly Yuanbao Million Cancer Prevention Insurance. These efforts are dedicated to providing cost-effective health insurance products with broad population coverage.

“Who should the designed products be sold to is the question that a startup should think about most.” Li Ying stated that the key to Yuanbao's success lies in tapping into the lower-tier market that insurance giants have not sufficiently focused on in the past, namely the inclusive medical insurance market.

As for the reason behind focusing on inclusive medical insurance, it is because Yuanbao’s founding team identified a structural opportunity in China’s insurance industry—a shift from critical illness insurance with financial attributes to medical insurance with service-oriented attributes.

Furthermore, in Li Ying’s view, traditional indemnity insurance has remained expensive for the general public. With rising disposable incomes and growing insurance awareness among consumers, inclusive medical insurance has emerged to meet this demand, offering a broader market potential.

So, what is Yuanbao’s strategy in the inclusive medical insurance market?

From the perspective of this role attribute of insurance brokerage platforms, marketing capabilities and technological capabilities are undoubtedly key factors that cannot be overlooked; the former pertains to customer acquisition, while the latter relates to product customization, product matching, and other aspects.

Let’s first examine Yuanbao’s digital marketing capabilities, namely its customer acquisition ability.

As previously mentioned, most of Yuanbao’s founding team members have prior work experience in NetEase’s e-commerce division. Notably, during his eight-year tenure at NetEase, Li Ying’s responsibilities were consistently focused on digital marketing, through which he developed a set of “insights” into internet marketing.

These “insights” are so specific thatYuanbao’s customer acquisition strategy can be summarized in four words: “mindset education”—continuously shaping user perceptions through the production of a large volume of short videos. These videos are distributed across platforms such as Douyin, Kuaishou, Baidu, and Tencent.。

However, short-video marketing is by no means exclusive to Yuanbao. In this regard, Li Ying stated,Yuanbao’s digital marketing also features personalized, precision matching.

Specifically, leveraging AI and big data, Yuanbao has developed an intelligent marketing model to deeply analyze the health insurance needs of diverse demographic groups. It then produces short videos depicting real-life stories tailored to different populations and scenarios, distributing them across the entire internet. By “constructing” authentic scenarios, these videos attract the attention of similar target audiences, thereby enhancing public awareness of insurance.

After being directed to the Yuanbao platform via short-video traffic acquisition, user health risks are identified through customer service interactions and leveraged by big data and artificial intelligence. This enables Yuanbao to precisely match users with appropriate medical insurance products and assist insurance companies in reverse-customizing personalized products based on user needs.

Among these, the key lies in converting users’ textual responses into structured data, leveraging big data to achieve precise matching with medical insurance products, and providing insurers with data services and open claims settlement interfaces.

The backgrounds of Yuanbao’s core technology team members have been introduced earlier and will not be reiterated here. However, during the interview, Li Ying emphasized one key point: even Yuanbao’s engineers and algorithm specialists “possess strong business acumen. Their work is deeply embedded in Yuanbao’s business scenarios, where they identify user need tags and then develop suitable products for matching based on these tags.”

Objectively speaking, Yuanbao has indeed developed rapidly and demonstrated keen sensitivity to emerging trends.

For example, according to Li Ying,Yuanbao has partnered with Taikang Online to launch the first million-yuan medical insurance product for non-standard risks across all population groups. Built on data-driven intelligent risk control and online underwriting models, this initiative aims to eliminate bias against insuring individuals with pre-existing conditions and overcome the challenges they face in obtaining coverage.

"Individuals with pre-existing conditions represent a highly valuable population for research and are viewed by Li Ying as the next blue-ocean market in health insurance. The underlying reasons are straightforward: the advent of an aging society, the trend toward younger onset of chronic diseases, and continuous technological breakthroughs position this group as a promising source of incremental growth for the health insurance sector."

ButChallenges in the health insurance market for individuals with pre-existing conditions remain significant. The foremost challenge is data accumulation. Insufficient data poses substantial difficulties for risk control.Meanwhile, Yuanbao is partnering with insurance companies to jointly explore areas such as data accumulation for health insurance covering individuals with pre-existing conditions and product customization.

Additionally,As the entire industry explores the integration of health insurance and health management, Yuanbao has also begun to lay out an ecosystem platform for “insurance + medical services,” aiming to provide users with integrated services encompassing health management, insurance, and disease management.

However, in the interview, while Li Ying affirmed the integrated development of health management and health insurance, she also pointed out the current challenges in their convergence—The non-standardized nature of health management services poses certain challenges to the pricing of health insurance products and user experience.

“The integration of health management and health insurance is undoubtedly a future trend, representing the second-highest priority in public demand for health insurance products after coverage for critical and severe illnesses. In the long term, Yuanbao will seek collaborations with suitable health management service providers and other third-party enterprises to jointly explore the integration of health insurance and health management.”At present, Yuanbao’s development strategy remains centered on enhancing user experience and meeting user needs by improving internal efficiency, strengthening algorithmic capabilities, and elevating service quality.“Li Ying concluded.”