Your child throws a tantrum and smashes something? Take out “naughty child insurance.” Similarly, buy cover against your bride becoming pregnant before the honeymoon, your team being knocked out of the soccer World Cup, burning your tongue eating hotpot or if smog ruins your holiday.
Quirky, maybe, but China’s insurers are turning to ever more creative ways to drum up business in a market where growth has stalled and penetration rates of about 3 percent — half the global average — are little changed from a decade ago. Premiums in China are less than US$278 billion a year, way below the US$1.3 trillion paid in the US and below even the UK’s US$330 billion, Munich Re and Swiss Re data show.
“It’s consumer acquisition, a way to engage new customers,” said Joseph Ngai, who heads the Greater China financial institutions practice at McKinsey in Hong Kong. “It’s primarily marketing.”
While most of these policies are short-term promotions, they offer insight into daily concerns in the world’s most-populous nation — such as marriage and children.
Ping An Insurance Group Co of China, the world’s second-biggest life insurer by market value, has offered an “Accidental Pregnancy Before Honeymoon” policy to cover the cost of having to unexpectedly cancel a honeymoon. It also offered a payout just to wives in the case of divorce, and another policy, akin to an investment plan, that paid out — after a certain period — if a couple stayed together, local and state media have reported.
Last year, Ping An offered another policy incentivizing couples to marry in the 10 days leading up to this year’s Nov. 11 “Singles Day.” The policies, which went on sale at midnight and included 12-month membership to an online matchmaking site, sold out in 10 minutes, the official China Daily newspaper reported.
In an e-mailed response to Reuters for this article, Ping An Property and Casualty said it seeks to “solve or alleviate real life problems.” While it still sells “innovative” products, it said it is no longer offering pregnancy, marriage and singles insurance.
Sino-Life Group, Sunshine Insurance Group and Anbang Insurance Group also sold married couples “concubine-proof,” “red rose” and “rich flower” insurance policies, according to the China Daily and the companies’ Web sites.
For young children, there is now insurance for recalled infant milk formula, and for little ones who get out of hand, People’s Insurance Group of China Co (PICC) offers a policy against “mischievous and destructive” habits. The policy — tagline: “Why not let us pay for the child’s fault?” — costs 44 yuan (US$7.16) and provides cover up to 100,000 yuan for 12 months.
Chongqing-based Ancheng sells a similar policy in three different versions, with parents of the naughtiest children paying 116 yuan for a 5,000 yuan payout.
Many insurers have latched on to this wave of creative policy marketing, with Ancheng, Ping An and ZhongAn, backed by Ping An and Internet giants Alibaba Group Holding and Tencent Holdings, among the more aggressive.
During the recent soccer World Cup in Brazil, Ancheng and ZhongAn offered policies allowing Chinese customers to pay for protection against overdrinking, being attacked by hooligans and a “Heartbreak” policy for when their favorite team was eliminated. Uptake was not huge, but the policies succeeded in winning plenty of media coverage.