ShanZhen: Precision Risk Control and Health Services Enable Comprehensive Elderly Insurance Coverage

VCBeat (WeChat ID: vcbeat) has learned that Shanzhen, in collaboration with Anxin Insurance and RGA (Reinsurance Group of America), has jointly developed an elderly medical insurance product, which has been officially launched on the Shuidibao platform. The release of this comprehensive medical insurance product, offering coverage of up to one million yuan and tailored for individuals aged 60 and above, fills a gap in the market for comprehensive medical protection for this age group.

China’s first senior medical insurance policy covering individuals up to age 80 has been launched, breaking through the age restrictions that previously limited older adults’ access to such coverage. Not only are individuals over 60 eligible for coverage, but applicants as old as 80 are also accepted, with renewable coverage extending up to age 100. The product provides basic coverage for 100 common critical illnesses, along with upgraded protection that is not restricted to specific conditions, and offers a maximum sum insured of RMB 4 million. Furthermore, supported by precise risk-control technology, the product features more affordable pricing, significantly enhancing the leverage of insurance protection.

Why has Shanzhen, an internet-based holistic health platform, partnered with the insurance industry? What is the underlying logic behind this collaboration? What value does developing medical insurance for the elderly truly offer? With these questions in mind, VCBeat conducted an exclusive interview with the executive responsible for Shanzhen’s insurance products.

《Guangming Daily》^①According to reports, more than 80% of an individual’s lifetime medical expenses occur after the age of 60, making the elderly population the group with the strongest demand for medical resources and health security. Currently, insurance products targeting individuals over 60 are predominantly cancer-specific policies, while the vast majority of comprehensive medical insurance plans on the market set the maximum enrollment age at 60. However, medical big data statistics from Shanzhen reveal that cancer accounts for less than 15% of hospitalization reasons among those aged 60 and above, leaving 85% of elderly medical risks uncovered by insurers willing to “share” them.

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Clearly, in addition to cancer insurance and single-disease coverage, the elderly require more comprehensive medical insurance, yet the supply side lacks products that match these needs. Individuals over the age of 60 face a high overall risk of morbidity and exhibit significant variations in individual health status. To avoid assuming substantial claims risks, insurers resort to a one-size-fits-all approach by classifying them as “substandard lives” to mitigate potential claim losses. Upon closer examination, the root cause lies in the nature of the insurance industry, which operates by managing risk; it lacks the capability to accurately analyze the health status and disease risk profiles of individuals over 60, thereby hindering rational product design and pricing.

It is evident that only by gaining a profound understanding of the elderly population and mastering their health status can we break through the bottlenecks in developing health insurance products for seniors. Since its establishment in 2014, Shanzhen has been deeply committed to the field of health services for middle-aged and elderly individuals. Drawing on years of research and accumulated expertise in health services, Shanzhen has proposed the “Double 60” concept: among individuals aged 60 and above, more than 60% have health risks that remain controllable, making them fully eligible for relatively comprehensive medical coverage; meanwhile, a significant proportion of the remaining population can also be covered by reimbursement-based critical illness insurance.

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What has long been overlooked is that, in addition to a high average health risk level, there is significant heterogeneity in individual risks among the elderly population. The standard deviation of health indices among middle-aged and young adults is minimal, whereas the elderly exhibit substantial individual variability (“a thousand faces for a thousand people”). Consequently, the traditional product development logic that relies on averages for risk control is clearly inapplicable to individuals aged 60 and above. It is precisely this groundbreaking discovery that has brought about a fundamental disruption to the development logic of medical insurance for the elderly.

If precise risk control measures could be used to assess the health status of each policyholder, replacing one-size-fits-all group-based risk assessment with individualized risk control, would it then be possible to identify the 60% of individuals aged 60 and above who are insurable? Shanzhen’s Alpha Precision Risk Control Engine, combined with its health service system, provides a comprehensive end-to-end solution.

“The Alpha Precision Risk Control Engine” is the decisive factor enabling the development and market launch of this insurance product. The project lead for Shanzhen’s insurance division told VCBeat, “The Alpha Precision Risk Control Engine serves as the implementation vehicle for health risk control among the elderly. Built upon Shanzhen’s extensive experience in providing health services to China’s middle-aged and elderly population and its medical research findings, this risk control engine was jointly developed by teams specializing in medicine, big data, and insurance actuarial science. It represents the culmination of Shanzhen’s long-term research and follow-up studies on the elderly population across China.”

Shanzhen boasts a highly professional research team, comprising both a medical research group of numerous MDs and overseas experts, and an R&D team specializing in insurance actuarial science and big data algorithms. It is only with such a high-caliber, multidimensional team, combined with Shanzhen’s extensive experience and accumulated expertise in health services for the middle-aged and elderly, that products like the “Alpha Precision Risk Control Engine” can be developed to break through the challenges of health risk management for older adults. The emergence of the Alpha Risk Control Engine has truly made the large-scale promotion of medical insurance for the elderly possible.

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Shanzhen also operates the “ECO-Wellness Health Service System,” which provides a nationwide service network covering 31 provinces and over 200 cities across China for the insurance industry. The “ECO-Wellness Health Service System” not only plays a role in front-end risk control but also impacts risk management throughout the entire product lifecycle.

It is understood that this senior medical insurance product incorporates the industry-first P-PE (Postpone Physical Examination) post-underwriting risk control model. Instead of mandating a medical examination prior to policy issuance, it adopts an incentive-based “post-examination” approach to adjust the coverage scope and sum insured for preferred-risk policyholders. This design neither raises the barrier to purchase for consumers nor compromises on providing comprehensive million-yuan-level coverage for elderly applicants who meet precise risk control criteria. The P-PE service for this insurance is provided by Shanzhen and integrated with its Alpha precision risk control engine.

With the assistance of its precision risk control engine, Shanzhen can further identify insurable populations, and in conjunction with its nationwide health service network, make the launch of comprehensive medical insurance for the elderly possible.

China’s population is aging at a remarkably rapid pace. According to statistics, by 2018, the number of elderly people aged 60 and above in China had reached 249 million (Source: National Bureau of Statistics).

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Meanwhile, according to the China National Assessment Report on Ageing and Health, by 2040, individuals aged 60 and above will account for 28% (402 million) of China’s total population. Therefore, the elderly health insurance industry will not only face substantial market demand in the future but also represent a blue ocean market.

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Shanzhen has restructured the design logic of elderly medical insurance products by leveraging a “big data risk control + health service system,” while enabling one-on-one risk prediction for elderly policyholders through its precise risk control engine. This approach empowers end-to-end innovation in elderly medical insurance products and creates an entry point for breaking into the blue-ocean market of elderly health insurance.

The project leader also revealed that Shanzhen, as a pioneer and game-changer in senior medical insurance, will leverage its precise risk control technology and health service system capabilities to empower the entire insurance industry. It plans to collaborate with industry partners to launch more senior medical insurance products. The aim is to help society build a comprehensive elderly healthcare security system, provide greater protection for seniors, and contribute to “healthy aging.”

① http://theory.people.com.cn/n/2014/0324/c40531-24715507.html