The executive meeting of the State Council deploys measures for life insurance to expand coverage, improve quality, and develop steadily –
It is imminent to provide rich and high-quality life insurance products
In recent years, my country’s life insurance industry has developed rapidly. Commercial life insurance has a certain coverage in China, but it also faces the problems of single product supply and a low level of protection. In this regard, the executive meeting of the State Council held on December 9 proposed to deploy measures to promote the expansion of life insurance coverage, improve the quality, and steady development to meet the diverse needs of the people.
Experts said that with the advancement of medical care and the increase in the average life expectancy of residents, insurance products must also meet the needs of the masses for health, pension, and security. From this perspective, it is urgent to promote the deepening of reform and opening up in the insurance industry, focus on optimizing supply, and provide rich and high-quality personal insurance products.
The development of commercial health insurance accelerates
The State Council executive meeting proposed to accelerate the development of commercial health insurance. Support the development of more insurance products for serious illnesses, do a good job of connecting and supplementing with basic medical insurance, etc., and improve the ability of urban and rural residents to guarantee serious illness insurance. Promote the development of commercial medical insurance products that meet the needs and affordability of the elderly population. Encourage insurance companies to include reasonable medical expenses outside the medical insurance catalog into the coverage. Through orderly expanding opening to the outside world and strengthening international cooperation, we will promote and improve the development and service level of health insurance.
“Commercial health insurance is an indispensable and important part of the medical security system.” Huang Hong, vice chairman of the China Banking and Insurance Regulatory Commission, said that encouraging enterprises and individuals to purchase commercial health insurance can form a diversified investment mechanism shared by the government, enterprises, and individuals. Ease the government’s investment burden and financial pressure, and ensure the stable and sustainable operation of the medical insurance system. At the same time, commercial health insurance and basic medical insurance complement and connect, which can meet the multi-level, diversified, and personalized health security needs of the people.
Wei Chenyang, director of the China Insurance and Pension Research Center of the National Institute of Financial Research at Tsinghua University, believes that accelerating the development of commercial health insurance still requires coordination at the policy level. For example, issues such as providing protection and controlling the proportion of adverse selection in the entire market depend on a good pricing model, and the health data mastered in the hospital system is very important to the health insurance pricing model.
It is worth noting that critical illness insurance, as an extension and expansion of basic medical insurance, is an important project to benefit the people. Since 2012, critical illness insurance has been piloted nationwide, and now it covers more than 1.3 billion people in China, which alleviates the problem of urban and rural residents falling into poverty and returning to poverty due to illness to a certain extent. However, the current “basic medical insurance + serious illness insurance” still cannot meet the actual medical needs of many people, and the proportion of patients paying out of pocket is still relatively high.
The third pillar of pension needs to be developed urgently
According to data from the National Bureau of Statistics, as of the end of 2019, there were about 254 million people aged 60 and above in my country, accounting for 18.1% of the total population. With the increase of the elderly population, it is imperative to develop the third pillar to provide better old-age security for the elderly.
Zhou Yanli, a member of the National Committee of the Chinese People’s Political Consultative Conference and former vice-chairman of the China Insurance Regulatory Commission, said that the integrated development of the insurance industry, the big health industry, and the elderly care industry has natural advantages. The insurance industry should further enhance the awareness of development, deeply tap the market potential of the health care blue ocean, actively integrate into the health care industry, give full play to the function and role of insurance, and build a health care ecological model with insurance as the core.
Wei Chenyang said that the development of the third pillar of old-age security needs to be linked to the development of the financial industry. Institutional investor-led long-term money and the resulting innovation in products offered to individuals are designed to make the third pillar attractive to individuals and play a role in long-term security. In addition, to start from the two aspects of product innovation and individual investor education, individual investors should pay attention to issues such as long-term returns, and the matching of investment risks and returns.
The reporter learned in the interview that the insurance industry has been actively exploring long-term care insurance in recent years. In 2016, pilot projects of long-term care insurance systems were launched in 15 cities including Qingdao and Shanghai. In 2018, areas outside the pilot cities also began to introduce long-term care insurance. “Long-term care insurance can relieve the family’s payment pressure to a certain extent and improve the quality of life of the insured and their families. At the same time, it can also drive the formation of the elderly care service market and the rapid development of the silver industry, thereby improving medical and elderly care resources. allocation efficiency.” said Zhao Yang, chief researcher of Kaisa Jianke Insurance Brokerage Company.
Insurance funds better support the real economy
It is worth noting that the State Council executive meeting also made clear arrangements on how insurance funds can support the development of the real economy and how insurance institutions can play the role of important institutional investors in the capital market. The meeting proposed to improve the long-term capability investment of insurance funds, prevent the use of insurance funds from speculation, strengthen asset and liability management, and strengthen risk prevention and control. Set a differentiated supervision ratio for the investment of insurance funds in equity assets, up to 45% of the company’s total assets, encourage insurance funds to participate in major construction projects such as infrastructure and new urbanization, and better play a role in supporting the real economy. Carry out in-depth special rectification of related party transactions, and resolutely crackdown on illegal acts of misappropriating, arbitrarily obtaining, and embezzling funds from insurance companies.
It is not difficult to see that the policy level will continue to guide insurance institutions to carry out value investment, long-term investment, and prudent investment, and provide more capital funds for the real economy and the capital market. Compared with other types of funds in the market, insurance funds have the advantages of long term, large scale, stable sources, and easy capitalization. They are an indispensable force in serving the real economy and the capital market.
Jia Yufeng, head of the Fund Utilization Department of the Insurance Association of China, said that the State Council executive meeting put forward very clear and crucial requirements for the use of insurance funds. Insurance funds come from premium income, and the structure of premiums determines the characteristics and inherent requirements of insurance funds. Long duration, stable cash flow, and reasonable cost are the advantages of insurance capital, and it is also the reason why insurance capital has repeatedly appeared in the investment of national strategic projects.
How to improve the long-term investment ability of insurance funds is even more urgent. Recently, the regulatory authorities are actively promoting the insurance industry to continuously strengthen the construction of investment management capabilities by canceling the filing of investment management capabilities, consolidating the main responsibility of institutions, strengthening information disclosure, and supervision during and after the event. The quality and efficiency of insurance funds serving the real economy.