The new policy on building insurance systems in poor regions will be a test of the insurance industry’s ability to innovate, contends Lin Yaomin 林瑶珉 Kunlun Health Insurance Company CEO, arguing success will be determined by how it tackles the following challenges

  • suppliers’ willingness to provide insurance for low-income groups: insurance firms have more incentive to target mid- to high-income groups because the costs are similar in issuing an insurance policy worth 100 or 10,000
  • finding a sustainable model for profit generation: controlling costs will be key to ensuring profits for insurance firms operating in poor regions, argues Lin
  • using technological innovation to reduce operational costs: limited internet coverage and low smartphone usage rates are all obstacles for developing microinsurance in poor regions, says Lin, emphasising that, while microinsurance means low premiums, it does not mean low compensation amounts
  • reducing operational costs through regulatory innovation: the ‘Guiding opinions’ are an innovation, but require more detailed supporting policies (for example, encouraging firms to set up service and sales branches in poor regions to solve the challenges of the ‘last mile’)