What is the cost of international health insurance in China?

Are you looking to secure international health insurance in China but not quite sure of the average premium for individuals and families? What about the key drivers shaping health insurance in China? The answers to these and much more can be found in this article by Pacific Prime China, with reference to our annual Cost of International Health Insurance Report.

Discover the answers below or head to our landing page to download the report for free!

The cost of health insurance in China for individuals and families

China’s International Private Medical Insurance (IPMI) premiums for individuals averaged USD $3,623 in 2020, down by 19.35% from 2019, while IPMI premiums for families averaged USD $12,020, down by 11.66% from 2019. When compared to other locations around the globe, IPMI premiums for individuals and families ranked 45th and 16th, respectively.

Table of rankings and average costs of international health insurance for individuals and families in China

Why premiums are lower in 2020: China’s correction phase

After years of increases, premiums have been going down in what can be perceived as a “correction phase” and adds to what we witnessed in our 2019 Cost of International Health Insurance Report. However, 2020’s decrease was further exacerbated by the unprecedented COVID-19 pandemic, which has affected the pool of policyholders in the country, namely expats that have migrated back to their native countries and consumers favoring entry-level insurance products from local or regional alternatives. The ramifications in which the pandemic has brought to China have clearly been enormous and continue to affect nearly every single trend in the health insurance industry and market. To understand better where the insurance market is heading, let’s explore the key drivers shaping health insurance in China.

What are the key drivers shaping health insurance in China?

The Cost of Health Insurance 2020 Report includes a dedicated section detailing the key drivers shaping health insurance in China. Here is an insight into two compelling trends:

1. Subdued demand as there are fewer expats in the country, but not for long

The COVID-19 pandemic that swept across China in 2020 had adversely affected the demand for international health insurance plans, especially the demand from expats and their families in China. During the course of the year, many expats and families opted to return to their home countries in favor of familiar healthcare treatment and options*. Thus, with fewer policyholders needing coverage for their healthcare in the country and fewer people making claims during that period, this ultimately led to lower premiums as there was limited demand and use.

*Note: This does not imply that China’s healthcare system lacks in quality and service for expats as the country has several international hospitals and facilities that are more or less equivalent to their Western counterparts. For further reading: Healthcare in Beijing: international hospitals, clinics, and insurance options for expats.

“China continues to see a large disparity of medical treatment costs in the private vs. public sector, which has been highlighted again in 2020, despite some reduction in treatment (claims) due to the COVID-19 pandemic.” – Jason Armer, Country Manager at Pacific Prime China

What insights can we glean from 2021?

As we head into the third and eventually the fourth quarter of 2021, we might begin to see a shift in demand for IPMI. This is because China may begin to allow visitors and expats back as the country starts to lower restrictions and pushes on with its nationwide vaccination program. Of course, this will depend on the severity of COVID-19 cases in countries it allows travelers from and the system used to indicate that travelers have been vaccinated (e.g. digital vaccination passport).

Our thoughts on IPMI premiums in 2021

It’s difficult to predict precisely what the IPMI premiums will be like in 2021 as China has yet to fully open its borders, however, one certain trend is the willingness for local consumers to secure health insurance to protect at least from COVID-19.

This trend could push insurers in China to design more insurance products that target this market and generate a pool of local policyholders to make up for the lower IPMI uptake. Our article, China’s booming health insurance industry, mentioned this trend in 2020 which highlights the following contributory factors:

• Aging population
• Technology in healthcare
• Private hospitals to meet demand
• Tax subsidies and health

Head to the article for a better understanding of what this trend will mean for 2021.

2. Digitalization making waves in the insurance sector, as the country embraces apps and tools

With reference to the 2021 Cost of International Health Insurance Report, Chinese consumers are more adept with digital innovation and its use, unlike their counterparts in many other neighboring countries. There also seems to be less red tape from regulators who support insurers in making digital offerings. This itself will likely boost the uptake of insurance products and services through consumers’ mobile devices.

More so, China is transforming itself into a technological superpower in 2021 which will influence the insurance industry to a high degree. For instance, insurtech – a portmanteau of insurance technology – will be a leading player in supporting traditional insurers and possibly help to control variables that influence premiums. Fraud detection and claims automation through the use of Artificial Intelligence (AI) technology could also lower premiums. The report covers the impact of fraud and AI in the insurance industry in detail.

The future of digital technology in insurance

Digital technology will make a dramatic impact on the insurance landscape in the coming months and years, which is why Pacific Prime China will be monitoring closely for the interest of individuals, families, and businesses in China and around the globe. To keep updated on the latest, visit our blog page.

Learn how to select the best health insurance plan in China

Now that you have a better understanding of the cost of international health insurance premiums for individuals and families, you may want help selecting the best health insurance plan in China for you and/or your family. If so, our advisors are on hand to offer impartial advice and compare across a range of vetted health insurance plans in China. To get started, contact us for a free quote today!

Disclaimer: Pacific Prime China solely represents, operates and manages locally regulated insurance products and services in the territory of PR China. Any references to Pacific Prime Global Company or Group, the international services, insurance products or otherwise stated written or verbally, is for introduction purposes about our overseas network only as each entity is fully independent.