Xiang Hu Bao van, an innovative health insurance competitor

In October 2018, Ant Financial launched an online mutual aid platform named Xiang Hu Bao to cover the medical expenses of its members. In less than six months, 50 million Chinese have joined the platform which aims at covering one fifth of the Chinese population in a two-year period; that is 280 million people.

Xiang Hu Bao, which literally means “mutual protection,” covers the costs related to 100 serious illnesses. Although quite similar to health insurance, the platform does not require admission fees nor regular payments. Should a claim occur, all the members of Xiang Hu Bao shall equally share the health expenses of the patient. The latter could receive a compensation of up to 300 000 RMB (44 700 USD). The monetary transactions are made on Alipay, an Ant Financial online payment platform. Ant Financial is a subsidiary of Alibab Group.

The major problems with these “mutual protection” platforms are fraud and lack of transparency. Xiang Hu Bao seems to have found the solution to these two constraints through the use of Blockchain technology. In fact, the claims are handled by an online assessment committee involving qualified volunteers. In addition, and for greater transparency, the files processed are published for the entire Xiang Hu Bao community. Although being a serious act of violation of the patient’s privacy, the users of the platform do not mind such a practice given the low cost of coverage.