Accessibility Assessment of the Disabled to Commercial Insurances in China: Design and Findings
The report investigated the accessibility of the disabled to nine commercial insurance products in seven categories on whether the disabled groups can be covered by their products and the applicability of insurance claims process Thirteen commercial insurance companies were interviewed to share about their progress or challenges in providing financial solutions to the disabled groups. The research is consisted of three parts: analysis of product terms, tele consultation with customer services, and interviews with representatives from the insurance companies on its insurance underwriting, claiming and marketing. The research and analysis led to the following findings:

First, besides family property insurance and car insurance, which can generally cover people with disabilities, most commercial insurance products on the Chinese market shut the door to the disabled.

Second, people with different disabilities have limited accessibility to insurances to various degrees. Among them, people with intellectual and mental disabilities are extremely unlikely to be insured; people with other disabilities might have certain accessibility to insurance products (except critical illness insurance), but separate underwriting is usually required.

Third, there are no clear and sufficient terms in in “rejection of insurance” for the disabled in most products. That is to say, there is no fundamental basis for making a claim on underwriting or refusal.

Fourth, the terms and accessibility for some insurance products can be of great similarity in different insurance companies, such as accident insurance and critical illness insurance; but can be widely different for other products, such as life insurance and annuity insurance, varying from direct rejection to direct undertaking.

Fifth, due to physical defects, people with disabilities often encounter barriers in insurance applying and claiming. Therefore, supportive services are necessary, without which, the disabled could not be truly protected by insurance.

Demand and Market Analysis: Taking Persons with Intellectual and Mental Disabilities as an Example
This chapter firstly analyzes the risks and possible consequences that might be caused by the various types of disabilities, which shows the necessity of insurance solutions. Secondly, we will focus on the analysis of the groups with intellectual and mental disabilities, especially autism and intellectual disabilities. Based on data of a nationwide survey, it analyzes the five aspects of people with autism and intellectual disabilities, which includes group characteristics, current social security status, insurance status, risk status, family affordability, and financial literacy, etc., in order to share the demand and market opportunities for commercial insurance to develop.

Yibao, a social enterprise which provides comprehensive service and financial inclusion solutions to nonprofit organizations and persons with disabilities, has launched a national survey on the social security and financial protection of persons with intellectual and mental disabilities in May 2019. In total, 7,284 valid questionnaires were collected, and a comprehensive analysis carried out based on the data on the five aspects. Results showed that the persons with intellectual and mental disabilities face with multiple risks and has multi-dimensional needs for insurances. In general, the government has established a basic social security system for all, including subsidies for social security and rehabilitation, and financial support for serious diseases. It also provides multi-dimensional assistance and financial security network for people with moderate to severe disabilities. However, due to the multiple risks, there is still an urgent need for commercial insurance to provide supplementary protection for persons with disabilities. Analysis shows that some people with disabilities have got access to commercial insurance, but the vast majority has not (Figure 2); in terms of accidents, serious diseases and medical treatments, the incidence rate is far from being low. Among them, 30% of the families with children of intellectually disabilities reported accidents, and more than 50% have had medical treatments. This on one hand reflects the importance of accident insurance and illness insurance, and on the other hand indicates that high incidence rates lead to high loss ratio.

It is worth mentioning that more than 80% of families with children of intellectual and mental disabilities expressed willingness to invest for future financial protection for their children. About one third are willing to pay 1,000 to 3,000 yuan per month, that is an annual payment of about 20,000 yuan; about one fifth of the families are willing to invest 3,000 to 6,000 yuan per month, which is about 50,000 yuan per year. Given that there are more than 10 million people with intellectual disabilities in China, preliminary estimation indicates a huge annual market size exceeding 100 billion.

Conclusion

1. The persons with disabilities have low accessibility to the commercial insurance in China.
   1. The persons with disabilities are financially excluded to various degrees. There is no health insurance product in the Chinese market that is accessible to people with disabilities without constraints. There are many restrictions on terms on accident insurance, critical illness insurance or medical insurance, which are in greatest need for the persons with disabilities. The persons with disabilities have a certain possible access to annuity and life insurance, which are based on fund management as the main business model and therefore are more accessible. The possible unrestricted access for the groups is basically car and homeowners’ insurance. We have obtained more positive feedback regarding their terms which does not have restrictions or rejections on people with disabilities.
   2. Insurance companies have not yet started the construction of service accessibility for persons with disabilities. In general, before any targeted insurance products for the persons with disabilities launches, the construction of service accessibility in terms of insurance enrollment and claims support would not be designed. Some insurance companies have developed wireless platforms, which persons with disabilities can browse the page to a certain extent thanks to their phone functions. But the enrollment process still lacks an unobstructed transformation. At the same time, according to different types of disabilities, insurance companies need to provide corresponding services to meet the needs. And any difficulties that create barriers for the persons with disabilities will further reduce the possibility for the groups to be enrolled.
   3. The reasons to hold rejection to the persons with disabilities is legally and morally challenged. Most commercial insurance in the Chinese market are designed for the “standard user”, which means, all the insured are required to be “in good health and able to work and live normally”. However, there is no clear definition or explanation on this term yet.
2. There are some obstacles for commercial insurance to better cover persons with disabilities. The rejection of enrollments or claims and being unable to provide targeted insurance are related to the following key influencing factors, a) the lack of market and risk analysis databases, b) the inefficient systematic support. Both are the main external manifestations. The internal manifestation is that c)the relevant information is asymmetry and inconsistent, which ultimately leads to insufficient attention and practical actions on the demand for insurance for persons with disabilities.
   1. The disability insurance risk features and market data are insufficient. China has not established a nationwide database of various types of disability risks, including the incidence, characteristics, and life cycle of various types of disabilities. There is a lack of scientific and complete risk analysis. In this case, it is difficult to accurately calculate the cost when developing new insurance products. At the same time, the market data is unclear for insurance companies to be motivated. In general, the development of China’s insurance market has been relatively short, and the insurance awareness and active participation rate is relatively low, not to mention that people with disabilities are limited due to relatively low incomes and lower levels of education. There is not enough trust and motivation to develop disability insurance products.
   2. There is a barrier between the commercial interest and the financial inclusion for persons with disabilities. People with disabilities have generally low incomes, low financial literacy, and low awareness of active participation. Therefore, the overall need for insurance products is focusing on “safety-net” type of micro insurance, which often means meager profits and requires a certain period of market cultivation.
   3. The current market development in China lacks an overall plan and momentum, though the related documents from the government propose to actively promote the development of commercial insurance for people with disabilities. No single insurance company is willing to invest when the market outlook is unclear. The work will require a solid foundation build-up, including the construction of database, market demand research, and the cultivation of insurance awareness for disabled persons. It needs to involve the collaboration of multiple agencies and the participation of multiple entities and requires a clear lead and responsible agency to formulate an overall plan.
   4. Relevant information is asymmetry and inconsistent. Regarding whether the disabled group can be insured, there are inconsistency in the information between the front-end (sales staff or customer service) and back-end (underwriting and claims) within the insurance company.
3. The potential and social value of commercial insurance for persons with disabilities need urgent attention.
4. 1. Disability insurance has huge market demand and positive feasibility. a) This research estimated that the annual investment of only one family of people with intellectual disabilities in insurance protection may exceed 100 billion yuan. With the care, support services, and supervision, the willingness to invest will be stronger and the scale will be larger. b) Regard to the group characteristics of persons with disabilities, there has been a set of basic national survey data. In order to further study the special needs of people with disabilities, under the support of the China Disabled Persons’ Federation, a team of national experts formed the China Disability Social Security and Commercial Insurance Research Group. Since November 2011, they have conducted extensive surveys and studies in 21 cities and counties in 10 provinces across the country. c) Some local governments have already purchased a large number of disability insurances collectively, which are expected to cover more than 30 provinces and cities. The local governments are establishing corresponding work processes and models in information integration, product design, plan formulation, insurance services, service supervision, and settlement of claims. More importantly, it has accumulated a set of disability insurance data, which improves the understanding and recognition of insurance. d) After nearly three years of practice, the inclusive insurance product represented by Xizhibao for disabled persons has proved the feasibility and sustainability in terms of product availability, controllability of claims, and services to a certain extent. With the continuous improvement of the understanding of the underwriting group’s insurance status, and timely adjustments to the product design and plan, the product payout ratio can be controlled.
   2. The inherent urgency of disability insurance is clear. Without the insurance, various types of disability risks such as accidents, illness, loss, liability, driving, etc., will be a heavy burden to the families.
   3. Commercial insurance for persons with disabilities can create social value. Based on the analysis of the cases, we find that commercial insurance for people with specific disabilities can transform institutional exclusion into institutional inclusiveness. Commercial insurance gradually helps to improve the comprehensive protection system for people with disabilities from the short-term to the long-term, a) The financial inclusion mechanism is a fundamental dimension; b) Credit enhancement serves for the gradual construction of various insurance data for people with disabilities and the accumulation of mutual trust between financial institutions and families with disabilities, so that disadvantaged groups can obtain more financial products and guarantee services and improve financial performance; c) Investment function serves the development of disabled individuals’ development opportunities and family asset construction and disadvantaged groups can gradually accumulate more physical capital, personal abilities, family assets, and social trust needed for their own development. Based on the construction and operation of the three mechanisms, commercial insurance has become an important part and driving force for the establishment of a comprehensive protection system.

Recommendations

1. Develop an institutional system for disability commercial insurance
   1. Commercial insurance for persons with disabilities straddles “social security” and “inclusive financing”, which integrates economic and social components. From the perspective of the insurance industry, it is an economic issue that requires accounting for costs and commercial sustainability. From the perspective of social security, it is a social issue that involves the life quality of 85 million people with disabilities and 250 million families that are related.
   2. Disability insurance is an important manifestation of social fairness and justice. With the development of the society, China entered a stage that financing has started to play an important role in the lives of ordinary people, as well as for people with disabilities. Insurance does not only share the risk and reduce the vulnerability for disabled people and their families, but also effectively provides long term social security for the disabled and improves the quality of their lives.
   3. Commercial insurance for persons with disabilities needs to consider the dual principles of affordability and commercial sustainability. The fee of the insurance products provided which are suitable for people with disabilities should consider the affordability for persons with disabilities. The cost should not be a barrier for the group to obtain commercial insurance. On the other hand, insurance providers also need to gain appropriate profit to be able to obtain a market-oriented and sustainable operation mechanism. It will also inspire more insurance companies to enter the field.
2. The government leads to actively build a support system for commercial insurance for persons with disabilities.
   1. One focus of China’s security system and basic public service system is to support individual development and establish an effective mechanism for shaking off the relative poverty. In the modern national governance system, the formation and functioning of poverty alleviation rely on the joint collaboration of the government, the market, and the society. Such a comprehensive, multi-subject supply, multi-layer security and service framework will provide many innovative opportunities for various types of business and social services to alleviate relative poverty.
   2. Commercial insurance has multiple functions and values. The overall protection of the disabled and the ability to resist risks cooperates with the government’s social security system. At the same time, commercial insurance can reduce the government’s direct investment pressure and mobilize multiple resources to build an overall insurance cost-sharing mechanism. What is more noteworthy is for the insurance industry, launching disability insurance does not only mean opening a new business field and market, but also enhance the image of the insurance as a responsible guarantor among the public.
   3. Incorporating commercial insurance for the disabled into the scope of the social security system and inclusive finance is necessary. Commercial insurance should be an important component of China’s social security system for the disabled, which requires more attention and support. The table below displays a proposed plan for incorporating commercial insurance into the scope of the social security system and inclusive finance.
   4. Speed up the specific measures to support the development of commercial insurance for persons with disabilities. First, local government ministries, disabled people’s federations, and insurance companies need to implement insurance mechanisms to the innovation of the management and services for persons with disabilities, and at the same time, build a professional and transparent system. Secondly, it is recommended that the government introduces more policies, to support the development of insurance products and services for persons with disabilities. Third, pilot projects can be an effective method to explore innovative ways of inclusive insurance for people with disabilities.
   5. Strengthen the protection of the financial rights of persons with disabilities. We call out for setting up a standard for the “rejection of insurance” by insurance companies based on sufficient evidence. China’s financial protection system needs to strengthen the responsibility of financial institutions in protecting the rights and interests of the consumers. This includes not only improving the standardization of product design and sales, but also the need to provide sufficient basis for “rejection”.
3. Transform the “unknowing rejection” to “an emerging market”
   1. Insurance companies should clearly define existing product terms to avoid legal and moral hazards. As China’s financial protection for consumers continues to increase and the legalization construction accelerates, the legal risks caused by the unclear definition of the insurance terms will continue to increase. It is recommended that the insurance industry conduct special discussions on this issue, to clearly define and supplement the existing terms.
   2. Disability insurance can play an important role for supply-side reforms in the insurance industry. Commercial insurance companies can actively participate in the development of insurance products for the disabled, which enhance the company’s competitiveness and its reputation and credibility in society, helping to expand the scale of the commercial insurance market. At the same time, the development of commercial insurance for persons with disabilities can help mobilize the resources and reduce the cost pressure of families and social security.
   3. Speed up the establishment of a China Disabled Population’s Protection Platform. It includes, a) a risk database for the disabled in China based on existing data and nationwide surveys, b) a national insurance library for disabled people with general rules and security fundings, c) a disability insurance product library and service system.
   4. Set up an inclusive insurance business unit to actively play the leading role of state-owned insurance companies. It is recommended to encourage existing insurance companies to set up inclusive insurance departments or institutions that provide special services to people with disabilities.
4. More social sectors can participate in accelerating the construction of a network of cooperation and support for commercial insurance for persons with disabilities.

1. 1. Encourage the research on insurance for people with disabilities. It is recommended to promote such topics in funding project directions, such as “Inclusive Insurance.”
   2. Build a national service platform for the protection of persons with disabilities. In addition to local governments, the Disabled Persons’ Federation, and insurance companies, it also requires the participation of social organizations, banks, trusts and other financial institutions, as well as scientific research institutions that serve people with various disabilities, to jointly build a national comprehensive service platform for the protection of people with disabilities.
   3. Intensify insurance and financial education for the disabled and the public through multiple channels. Relevant departments need to further promote the financial knowledge and financial skills development for families with disabilities to raise the awareness of the value and role of inclusive insurance and other risk prevention methods. It will encourage the purchase of insurances, seeking relevant services, and the motivation to proactively reduce risks.

Brief Introduction of Initiators

Yibao

In response to the national strategy of inclusive financing, Yibao focuses on serving the inclusive financing needs of various vulnerable groups. Serving in the field of public welfare, Yibao have been actively cooperating with government, financial institutions, non-profit organizations, scientific research institutions, on research and promotion, talent training, product design, and public welfare financing project. Yibao provides inclusive financial solutions to assist the poverty alleviation and support the development of people’s living quality.

In the six years since its establishment, Yibao have cooperated with and support insurance companies to serve more than 18,000 non-profit organizations in 30 provinces and cities across China, and supported more than 780,000 non-profit organization practitioners, disabled groups, and rural children. In 2017 and 2019, Yibao was certified by China Charity Exhibition and Beijing Social Enterprise, and won a series of domestic and international awards, including the Golden prize in the China region of MetLife Foundation Global Inclusive Financing Competition and Global Entrepreneur Resilience from Swiss Reinsurance Foundation.

Zhou Ling, founder of Yibao, is a doctoral graduate for social security from Beijing Normal University, a master tutor of Beijing City University, a mentor of Ginkgo Fellow Program. She was renowned as 2017 iWen’s Future Financial Impact Figure and was on the 2020-2021 Social Impact Elite List of G20 Young Entrepreneurs’ Alliance.

ACCESS Health International and Fintech for Health platform

ACCESS Health International is a global non-profit advisory group dedicated to improving people’s medical treatment opportunities in low, medium and high-income countries, so that more people can enjoy high-quality and affordable medical and health services. ACCESS conducts research on the best practices of models in the health field of specific country or region so that they can be adopted and adapted worldwide.

Supported by MetLife Foundation, ACCESS Health established a “Fintech for Health” platform in 2019. It aims to promote the development of innovative financing and payment models at home and abroad. It aims to enable people to afford healthcare services using digital financial services and financial inclusion approach. Over the next three years, ACCESS Health will test and scale projects that support people pay for and afford the medical care they need, and to build powerful database through cooperation to promote cross-sectoral innovation in healthcare accessibility and affordability.

Beijing AiEr Foundation

On May 17, 2009, “Female Mayor AiEr Foundation” was originally founded in Shanghai as promoted by China Mayor Association and initiated by its Female Mayor Branch. Its mission is to mobilize the government, social organizations, medical institutions, enterprises, and individuals to support the rehabilitation of the disabled and raise the awareness of the whole society through the impact of female mayors.

In March 2016, to fulfill the mission with better quality, integrated resources of society, and being professionally operated, the China Municipal Association and Lady Tao Siliang established Beijing AiEr Foundation for the purpose of “advocating charity, alleviating the poor, supporting the disabled, and helping students with disabilities”, to carry out charitable projects in various fields such as poverty alleviation, assistance to the disabled, and education.

Research Center on Fintech and Protection of Financial Consumer Rights, Central University of Finance and Economics

The Center focuses on research on the rights and interests of financial consumers and promotes financial education. The protection of the rights and interests of financial consumers underpins financial stability. The Center provides recommendations to government and regulatory authority for policy making and promotes the agenda of protection of financial consumers, financial stability, sustainable investment, impact investment, philanthropy and finance, green financial and financial risk management, to contribute to the sustainable development of the China’s financial industry.

Research Center for Society and Finance, School of Social Sciences of Tsinghua University

In 2018, the Center was initiated by well-known sociologists and financial scientists at home and abroad as a non-profit and interdisciplinary think tank to promote the integration of financial studies and sociology and for the sound development of China’s financial industry. It is committed to combining financial studies with sociological research, academic research with social practice to conduct academic and policy research, promote cross-discipline integration, and strengthen the application of research results.