Mutual aid: The next big hit in insurtech?

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Hello readers,

Imagine a health insurance plan that covers hundreds of critical illnesses and conditions yet it costs you just a few dollars a month. Sounds too good to be true? Well, China has made it possible, and it goes by the name of “mutual aid.”

Today we look at:

• What the heck is China’s mutual aid, and can it work in Southeast Asia?
• The plant-based startup that makes v-edgy pork
• Other newsy highlights such as WeChat’s download surge and Reliance Jio’s $54 phones

PREMIUM SUMMARY

We pay together, in sickness and in health

Mutual aid is the cool friend we never knew we needed. How does it work? You receive medical coverage when you pitch in for other people’s medical expenses. So the more people there are in the program, the cheaper the premiums will be for each individual.

• One for all, all for one: Mutual aid has gotten the attention of a few Chinese internet giants. WeChat’s owner Tencent, Alibaba’s fintech affiliate Ant Group, smartphone maker Xiaomi, food delivery platform Meituan-Dianping, and ride-hailing app Didi Chuxing have all jumped on the bandwagon.
• When it’s not good to go 10x higher: While the average monthly fees could go as low as 3 yuan or US$0.44, prices often fluctuate. On Alipay’s mutual aid platform Xiang Hu Bao, for instance, its monthly premium increased more than tenfold over a 6-month period, causing some members to call it quits.
• Setting the SEA stage: With an insurance penetration rate of only 5%, Asia Pacific’s developing countries have a huge unmet demand for insurance. The region’s super apps have already spotted this opportunity and are moving into the digital insurance space: See Grab’s GrabInsure and Gojek’s GoSure.
• The Chinese inspiration: Tech companies in Asia tend to follow the footsteps of their successful counterparts in China. But at present, no one has taken the throne to offer mutual aid-like products in the region yet. Could it be a matter of time before that happens?

Dive deeper: Can China’s “one for all, all for one” approach to health insurance work in SEA?

STARTUP SPOTLIGHT

Introducing v-edgy pork