Chinese insurers “nervous” at possible COVID surge

Many Chinese insurance companies have pulled the plug on their COVID insurance products, with the industry bracing for a huge surge of payouts as coronavirus cases soar.

Chinese-language media reports said that the previously popular low-cost COVID-19 insurance products are no longer being sold in most major e-commerce portals, Quartz reported, with only one COVID-specific product remaining for sale online.

The sole standing product is sold by Alibaba-backed Ant Insurance and underwritten by the state-owned People’s Insurance Company of China, a report by the 21st Century Business Herald said. The policy has a monthly premium of RMB2.61 yuan (SG$0.51), with benefits including RMB100 per per day of hospitalisation due to the disease.

As Beijing begins to scale back its pandemic restrictions amid public protests against their severity, experts predict up to 90% of the population could get infected. Such a huge amount of claims could be financially devastating for insurers.

There have already been reports of COVID-19 patients having difficulty claiming from their insurers. In one case, the insurer asked the claimant to provide results for a COVID-19 nucleic test, as well as original chest X-rays and blood tests. However, due to the medical system being under massive stress caused by surging infections, the claimant may have a hard time getting these tests.

Despite this, the China Banking and Insurance Regulatory Commission has recently urged insurers to develop affordable insurance products to help customers deal with the costs of getting infected with COVID-19.