November 27, 2019
Xiang Hu Bao, an online mutual aid platform introduced by Alipay, has attracted over 100 million participants since it was launched just over a year ago, helping health protection in China become more inclusive by making it more accessible especially for the lower income and those living in rural areas.
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100 million participants signed up for Xiang Hu Bao in one year. (Graphic: Business Wire)
As of November 22, 2019, more than 10,000 people have received financial aid for their medical needs through Xiang Hu Bao, contributed by other participants in the platform. More than two thirds of Xiang Hu Bao participants earn below RMB 100,000 (US$ 14,000) per year, while a third of them come from rural China.
Xiang Hu Bao, which literally means “mutual protection”, was launched in October 2018 and provides its participants with a basic health plan against 100 types of critical illness, including thyroid cancer, breast cancer, lung cancer, critical brain injury and acute myocardial infarction. All participants share the risk of becoming critically ill and bear the related medical expenses as a collective. While Xiang Hu Bao is not a health insurance product, it complements premium health insurance offerings in the market that have wider range and depth of coverage.
“Xiang Hu Bao was designed with inclusiveness in mind,” said Ming Yin, Vice President of Ant Financial. “We hope Xiang Hu Bao can support participants to help one another by providing a trustworthy platform in addition to the medical care protection provided by China’s social security and premium health insurance companies.”
Unlike traditional online mutual aid platforms in China, Xiang Hu Bao is more inclusive because it requires no upfront payment or admission fees. It is available to participants between 30 days and 59 years of age who meet basic health and risk criteria. When a participant makes a claim, supporting evidence must be submitted via the Alipay app and then it goes through a review and approval process. Traditionally, online mutual aid platforms in China lacked cost-effective capabilities to reduce the risk of fraud, impacting their reputation and therefore prevented them from scaling up to help those people truly in need.
On the Xiang Hu Bao platform, the entire evidence submission process is powered by Alipay’s proprietary consortium blockchain technology, which ensures the process is tamper-proof. Once claims are approved, the participant will receive a one-time payout of up to RMB 300,000 (~US$43,000), the cost of which is shared equally by the other participants. Disputed claims are escalated to an online review board that consists of qualified volunteer participants.
According to Xiang Hu Bao, around six out of ten of its participants come from third and lower tier cities, counties and rural areas. A recent survey conducted by Health Economics and Medical Security Research Center, Nankai University1 examined the annual income of Xiang Hu Bao participants and discovered that two thirds of them earn less than RMB 100,000 (~US$ 14,000). Not surprisingly, around 86% of participants cannot afford medical expenses exceeding RMB 300,000 (~US$ 43,000). Also, the survey shows that 10 percent of Xiang Hu Bao’s participants had no other health plans other than Xiang Hu Bao.
“The majority of Xiang Hu Bao’s participants are from middle or low-income communities who are at great risk of falling into poverty if they become critically ill,” said Zhu Minglai, director at the Health Economics and Medical Security Research Center, Nankai University, adding that Xiang Hu Bao has enabled low-income communities to receive basic health protection at an affordable cost and supplements other health plans provided by the public and private sectors in China.
In addition to creating value for its participants, Xiang Hu Bao also helps cultivate a greater understanding of the benefits for obtaining protection against illnesses. According to an FT Confidential Research survey,2 one in three of Xiang Hu Bao’s participants intend to buy a critical illness insurance product over the next six months, while for those who do not participate in the platform, the intention of purchasing is only 22 percent. Furthermore, sales of health policies offered by partner insurance companies on the Ant Insurance Platform have increased by over 60% as of June 2019, in comparison to October 2018 when Xiang Hu Bao was launched.
Operated by Ant Financial Services Group, Alipay is the world’s leading payment and lifestyle platform. Launched in 2004, Alipay serves over 1.2 billion users with its local e-wallets partners as of June 2019. Over the years, Alipay has evolved from a digital wallet to a lifestyle enabler. Users can hail a taxi, book a hotel, buy movie tickets, pay utility bills, make appointments with doctors, or purchase wealth management products directly from within the app. In addition to online payments, Alipay is expanding to in-store offline payments both inside and outside of China. Alipay’s in-store payment service covers over 50 markets across the world, and tax reimbursement via Alipay is supported in 35 markets. Alipay currently supports 27 currencies, and works with over 250 overseas financial institutions and payment solution providers to enable cross-border payments for Chinese travelling overseas and overseas customers who purchase products from Chinese e-commerce sites.
1 Source: https://mp.weixin.qq.com/s/HjRYY9jsbpe2LWhabI0ijw (in Chinese)
2 Source: https://www.ft.com/content/3bbf683e-a325-11e9-974c-ad1c6ab5efd1