Pioneering the Market: Insurance Geek and Shanghai Insurance Exchange Forge Co-insurance Framework to Address High-Value Employee Risk Protection Gaps

In the insurance industry, risks characterized by low probability, high suddenness, broad impact, and substantial losses are often difficult for a single insurer to underwrite.

To this end, an insurance organization known as an “insurance consortium” (hereinafter collectively referred to as the “co-insurance system”) has emerged, formed by several insurance companies in accordance with agreed-upon statutes to establish a long-term community of shared interests that jointly provides insurance coverage and risk management for specific risks.

The characteristics of the co-insurance system give it a unique advantage in the field of catastrophic risk management.For instance, enhancing risk protection capabilities: The use of insurance consortia can effectively address the insufficient underwriting capacity of individual insurance companies. By pooling the underwriting capacity and professional technical expertise of multiple insurers within the industry, these consortia jointly provide insurance coverage for special risks.However, in actual operation, there are problems such as relatively single solutions, high prices, and high thresholds, and market demand has not been well met.

InsGeek, an insurtech company founded in 2014, has partnered with the Shanghai Insurance Exchange to establish a life insurance coinsurance system, and has recently launched the “Double Monthly Salary” product under this framework to the market.

It is reported that this project represents another innovation in the life insurance sector during the exploratory development of the Shanghai Insurance Exchange’s Special Risk Diversification Platform.Through the co-insurance system, group high-value life insurance risks are effectively diversified, better meeting corporate clients’ coverage needs for high-sum-assured personal risk protection.

What capabilities enabled InsGeek to enter the coinsurance market, a sector with few corporate participants? What is the underlying logic? How does it collaborate with the Shanghai Insurance Exchange? What challenges has it encountered? What industry trends do these developments reveal? To address these questions, VCBeat conducted an in-depth interview with the head of the Insurance Business Division at the Shanghai Insurance Exchange and Wang Tenghua, Vice President and actuary at InsGeek.

The head of the Insurance Business Division at the Shanghai Insurance Exchange (SHIE) stated that the “Double Monthly Salary” insurance product was listed for trading on the SHIE. Through a co-insurance arrangement, it effectively addresses the specialized personal risk protection needs of key personnel in small and medium-sized enterprises (SMEs), marking an innovation in the SHIE’s ongoing efforts to advance its specialized risk platform.

As the platform service provider for this co-insurance program, the Shanghai Insurance Exchange leverages its Special Risk Diversification Platform to offer functions such as on-exchange matching, online trading, information registration, and fund settlement. This ensures the online and standardized development of co-insurance operations, effectively addressing previous issues such as information asymmetry and delayed fund settlements among co-insurers. By significantly improving transaction efficiency, it provides robust platform support to sustain the healthy growth of the co-insurance business.

“As a technology company that has been deeply rooted in the group insurance market since its inception, Insgeek has always focused on the core needs of enterprises. For instance, companies have demand for high-frequency, low-severity medical insurance, as it can effectively enhance employees’ perception of benefits; furthermore, according to the law of large numbers, growing enterprises with around 1,000 employees are likely to experience cases of critical illness, sudden death, or accidents each year. While these events do occur annually, their probability is not particularly high (i.e., multiple cases do not occur simultaneously).”Once it occurs, the impact on enterprises and employees' families is significant. Therefore, the demand for high-coverage insurance products designed to mitigate high risks has always remained strong."Wang Tenghua told VCBeat."

However, it is currently difficult to find particularly effective solutions on the market that meet the aforementioned requirements. The reason lies in the fact thatThe design of such products faces two major challenges.

First, there is a lack of data.“Product design requires estimating the probability of future risks. However, for business lines with extremely low probability but high severity of loss, data volume is generally insufficient. This often leads to difficulties in product development, as stakeholders are highly cautious about designing high-risk insurance products lacking robust data support,” said Wang Tenghua. Ultimately, such products are brought to market with exceptionally high pricing, which raises the entry barrier and inevitably results in the loss of a significant share of the market. This is a common yet difficult-to-avoid reality for both users and insurers.

Second, there is a lack of business volume.After an insurance product is launched, sufficient data are required to validate the rationality of its design and to guide future updates and iterations. However, data validation depends on adequate business volume. The low business volume resulting from the aforementioned circumstances leads to insufficient data for validation, thereby creating a vicious cycle.

“These are the significant challenges faced in establishing a co-insurance framework, developing products, and bringing them to market; they also represent the industry value of our current co-insurance framework: meeting market demand, pricing that balances risk and business considerations, driving market growth, and accumulating data supported by technology.”

To this end, the Shanghai Insurance Exchange has entered into a collaboration with InsGeek. HoweverThe improvement and promotion of the co-insurance system require technical support and a profound understanding of insurance product operations., why has insgeek become the best partner? And how has it achieved this?

In the corporate group insurance sector, InsGeek has been diligently strengthening its “moat.” To date, InsGeek has served over 7,000 enterprises and more than 1.2 million employees, with premium growth exceeding 100% and a policy renewal rate of 100%.

“Over the years of accumulation, our understanding of the group insurance market and products has been deepening.” In Wang Tenghua’s view, building a co-insurance system is fraught with challenges, especially in the initial stage. Both the demand side (corporate clients) and the supply side (insurance companies) must have a strong willingness to cooperate, and establishing such a platform is not something that can be achieved overnight. “The Shanghai Insurance Exchange, which enjoys high industry credibility, along with its existing co-insurance platform infrastructure, found an almost immediate synergy with InsGeek, which has been deeply rooted in the group insurance sector for many years. By leveraging their respective strengths, both parties have encouraged more insurers and enterprises to participate, ensuring a solid start.”

To date, an underwriting alliance has been formed by five insurance companies, jointly led by InsGeek and the Shanghai Insurance Exchange.

It is worth noting that the Shanghai Insurance Exchange itself possesses functions such as fund settlement, trading rules, and information disclosure. On this basis, Insgeek primarily collaborates with partners to establish a long-term mechanism for co-insurance from dimensions including technology, services, and product development,On one hand, it addresses the issue of insufficient underwriting capacity among individual insurers in fragmented underwriting scenarios., further deepen the supply-side reform of insurance,On the other hand, strengthen the empowerment of insurtech to achieve centralized registration of co-insurance information through technological means., thereby enhancing the accuracy of coinsurance transaction data, improving transaction efficiency, and reducing operational costs.

The first product under the co-insurance framework, “Multiple Monthly Salary Coverage,” has just been launched. Currently available for enterprises with five or more employees, this product links coverage amounts to salaries, offering options of 24x, 36x, or 48x monthly salary, with a maximum coverage limit of RMB 12 million. Its exceptionally low minimum enrollment requirement and ultra-high coverage limits make it feasible for hundreds of thousands of small and medium-sized enterprises (SMEs) across China to purchase the “Multiple Monthly Salary Coverage” product.

Product design is also primarily driven by enterprise needs.“Small and medium-sized enterprises (SMEs) and new-economy companies in China are growing rapidly, yet there are no group insurance products that adequately meet their needs. Given the characteristics of this segment, the minimum number of insured individuals required to initiate coverage cannot be set too high; this is the core rationale for setting the minimum at five employees,” said Wang Tenghua. “The group insurance framework is designed to address scenarios with low probability but high severity per incident. Therefore, we strive to maximize the sum insured, capping it at RMB 12 million.”

In addition, there are two design strategies for linking the sum insured to monthly salary.First, all insurance products involve risk control logic; therefore, linking the sum insured to monthly salary allows for better matching of coverage amounts based on individual user circumstances. Second, an individual’s salary reflects their value to the company to a certain extent, and this value evolves dynamically. Consequently, both enterprises and employees require differentiated insurance products and dynamic coverage amounts.

At the current stage, the design logic of the Double Monthly Salary product primarily focuses on small and medium-sized enterprises (SMEs) and new economy companies, aiming to fill the market gap in this segment and provide adequate protection against unforeseen risks for rapidly growing businesses and their employees’ families.

It is worth noting that InsGeek’s years of accumulation in the group insurance sector have played a significant role in the design of its entire product system.First, Insgeek has integrated the entire corporate group insurance service chain, spanning from front-end sales to mid- and back-end services, including risk control, underwriting, and claims settlement, thereby providing support for the sustained operation of the co-insurance system. Second, Insgeek continues to build technological barriers by establishing a systematic framework in data accumulation, data supply, data mining, and data security, which helps enhance the efficiency of the co-insurance system.

It is precisely on this basis that the three parties are able to jointly establish a co-insurance system for life insurance.

As key participants in market activities, the sustainable development of enterprises is closely tied to employee well-being. Consequently, a growing number of companies are prioritizing benefits design, andThe better the benefits are designed, the more they enable employees to work with peace of mind and in good health.

From the current market perspective, medical insurance within group insurance products can effectively alleviate the financial burden associated with disease-related medical treatment, thereby meeting such market demands.

However, there are few suitable insurance products available on the market to address significant risks. This time, the collaboration between InsGeek and the Shanghai Insurance Exchange in a co-insurance framework has made it possible for hundreds of thousands of small and medium-sized enterprises (SMEs) and new economy companies in China to access salary-multiple insurance products. This low-cost, high-efficiency solution significantly reduces employment-related risks for businesses while enabling tiered welfare structures that effectively incentivize the recruitment of core talent.

As high-sum-assured insurance products are extended to more employees and households through corporate channels, the inclusive nature of insurance will deliver greater social value.