In the next few decades, hundreds of millions of home-based elderly care people will bring a market of 10 trillion yuan every year.
In the face of this huge cake, insurance companies are actively building an ecosystem of "insurance + home service" relying on the existing health service system, combining different sales and service scenarios to provide customers with personalized and customized health care services, and empowering the main insurance business with the two-wheel drive of "customer + service".
However, the lack of sufficient professional service personnel, the huge gap in the payment side, and the lack of industry-related service standards have become obstacles for insurance companies to build a closed-loop home care service for the elderly.
In the context of continuous improvement of policies, Ping An has joined hands with relevant institutions to build the "Nursing Consortium" and "Housing Consortium" models, and create standards for home-based elderly care and age-appropriate transformation.
Although the "insurance + home care" model requires long-term and sustained investment by insurance companies, it can be expected that with the explosion of market demand, the home care related service model will become an important engine for the growth of the life insurance market.
Source | China Insurer magazine
The layout of insurance companies in the field of home care is accelerating.
According to data released by the National Bureau of Statistics, the number of elderly people aged 60 and above in China reached 297 million at the end of 2023, accounting for 21.1% of the country's population, an increase of 7.84% compared with 2010.
China, which has officially entered a moderately aging society, will have become a proposition essay that must be done at the economic and social level of China in the next few decades or even longer. For the way of elderly care, various survey statistics all point to the same direction, that is, "home care".
Statistics show that by the end of 2021, less than 1% of the total elderly population in China had lived in elderly care institutions. According to the data of the Fourth Sample Survey of the Living Conditions of the Elderly in Urban and Rural China, 95.6% of the elderly are mainly caregivers of family members, and 2.8% of the elderly are mainly caregivers of nannies, hourly workers and other domestic workers, and the proportion of the two is as high as 98.4%, which also means that home care is the choice of the vast majority of the elderly in China.
According to the survey data of the Research Center on Aging, 85% of the elderly clearly expressed that they must care for the elderly at home, 7% did not think about it, and the remaining 6% considered living in an institution. Obviously, home care is the preferred way for the vast majority of middle-aged and elderly people.
In fact, we have seen some data from abroad, including Finland and Germany, where more than 90% of the elderly want to retire in their own homes, which is a basic active choice of ideas.
In fact, at present, China has basically formed a "9073" pension service pattern, that is, about 90% of the elderly care at home, about 7% of the elderly rely on the community for the elderly, and about 3% of the elderly live in institutions for the elderly.
Under the "9073" pattern, how to build an ecosystem of "insurance + service", accurately meet customer needs, and build a new model of home-based elderly care with family as the core, community as the backing, and professional services as the basis has also become a new topic actively explored by insurance institutions.
The "blue ocean" of home care
According to international standards, more than 7% of the population aged 65 and over is mildly aged, 14% is moderately aged, and more than 20% is severely aged. In 2021, China's population aged 65 and above was 200.56 million, accounting for 14.2% of the country's population, indicating that China has entered a stage of moderate aging.
China is also the fastest aging country in the world. It is estimated that by 2035, the population aged 65 and over will exceed 21% of the national population, entering a stage of deep aging. The proportion of 65-year-olds in China has gone from 7% to 14% to 21%, which is about 34 years. In most countries in Europe and the United States, it took about 100 years.
In fact, in the 15 years after 2022, the post-60s and post-70s generations will enter the retirement period, bringing the largest "retirement wave" in history, with more than 20 million people retiring every year. In the case of "not rich" and "unprepared", China's rapid aging has brought tremendous pressure to the entire social economy.
What needs more attention is that by the end of 2021, about 190 million of China's 260 million elderly people had chronic diseases, accounting for more than 70%, and about 45 million disabled elderly people, accounting for more than 15% of the elderly population.
The Blue Book of China's Elderly Care Services (2012-2021) predicts that the total number of disabled people in China will rise to 72,792,200 by 2025 and 100 million by 2030.
The huge number of sick people who are "aging" will undoubtedly bring a huge demand for elderly care and medical services (Figure 1). According to iiMedia's 2022 pension industry report, the market size of China's pension industry in 2021 will be 8.8 trillion yuan, an increase of 22.3% over 2020, and the average annual growth rate is estimated to be 15% in the next five years, much higher than the growth rate of GDP.
● Pain points of home care for the elderly
Although there is a lot of demand for home-based elderly care, the supply of related services is insufficient, especially in terms of professional nursing staff and high-quality services, and there are still many pain points that need to be solved urgently. Moreover, with the advancement of science and technology, the elderly have an increasing demand for smart elderly care services, including smart homes, telemedicine, emergency rescue, etc., but the current supply of services in this area is insufficient.
From a practical point of view, the current degree of professionalism of home care services is not high, and it still prefers basic housekeeping services. The low educational background and insufficient professional level of nursing staff are contradictory compared with the increasingly urgent demand for the integration of medical care and elderly care and health care for the elderly.
Relevant statistics show that there are only 1 million people currently employed in the pension service industry, and most of them are temporary workers who have not undergone systematic training and are about 50 years old, and there are only 50,000 elderly care workers with professional knowledge and certificates. The gap in elderly care talents has reached 5 million, which has formed a huge constraint on the improvement of the overall level of home care services.
Industry insiders believe that low income, difficult working conditions, heavy work content, lack of upward channel, etc. are the main reasons for young people to leave, and highly educated professionals are reluctant to enter the pension service circle.
In addition, the existing pension system is not perfect, and the education and training system is not perfect, which cannot meet the needs of future career development.
How to strengthen the construction of talent team, cultivate community home-based elderly care service professionals, improve salary and attract more young people to devote themselves to the elderly care service industry, and create a group of high-level elderly care personnel are common problems faced by relevant elderly care service institutions.
From the perspective of payment, the average level of basic security for the elderly is low, the average monthly income of the elderly in urban areas is 2,377 yuan, and the average monthly income in rural areas is only 832 yuan, and the ability to purchase pension services is obviously insufficient.
With the generational change of the "post-60s" silver-haired group, the number of elderly people with higher payment ability is increasing, but the overall growth of the number and the higher proportion of groups with lower payment ability have led to the gradual increase of the overall payment gap, and the shortage of the supply side has also aggravated the occurrence of this problem. The innovation of the payment side and the construction of a more perfect pension security service system are important ways to solve the problem.
The gradual maturity and promotion of the pilot long-term care insurance system has laid a good foundation for the innovation of the payment side of the pension industry.
Long-term care insurance preliminary structure payment model
China's long-term care insurance system originated in 2016, the Ministry of Human Resources and Social Security officially issued the "Guiding Opinions on Carrying out the Pilot of Long-term Care Insurance System", and 15 cities including Shanghai, Guangzhou, and Qingdao took the lead in carrying out long-term care insurance pilot work to explore the long-term care insurance policy system with Chinese characteristics.
In 2018, after the establishment of the National Health Insurance Administration, it conducted a follow-up evaluation of the pilot in conjunction with relevant departments, and expanded the pilot to 49 cities in a steady and orderly manner in 2020.
In 2020, the National Health Insurance Administration (NHSA) and the Ministry of Finance (MOF) issued the Guiding Opinions on Expanding the Pilot Program of Long-Term Care Insurance to expand the scope of the pilot program for long-term care insurance, and to provide a guiding framework for the scope of protection and financing methods. Under the guidance of national policies, various localities have successively introduced differentiated long-term care insurance pilot policies, combining local income levels, price levels, aging status, etc., to clarify the specific pilot implementation standards including disability level assessment, payment channels, and security fund collection.
At the same time, in order to build a multi-level long-term care insurance protection system, the Chinese government encourages commercial insurance to participate in the management of long-term care insurance, and has issued relevant policies to strengthen the supervision of commercial insurance participation in long-term care insurance (Figure 2).
At the policy level, the state encourages commercial insurance institutions to participate in the development of long-term care insurance products. In October 2021, the "14th Five-Year Plan for Universal Medical Security" issued by the General Office of the State Council clearly stated that the long-term care insurance handling service system should be improved. Improve the management service mechanism, and introduce social forces to participate in long-term care insurance handling services. Encourage commercial insurance institutions to develop commercial long-term care insurance products.
In April 2023, the China Banking and Insurance Regulatory Commission (CBIRC) issued the Notice on Launching the Pilot Program for the Conversion of Life Insurance and Long-term Care Insurance Liability, deciding to launch a pilot project for the conversion of liability between life insurance and long-term care insurance from May 1, with a tentative period of two years.
In this regard, some industry insiders believe that the pilot of "life insurance to long-term care insurance" makes full use of existing life insurance products to carry out conversion business, which can alleviate the pressure on care funds for the disabled elderly who already hold life insurance policies. At the same time, it will also help reduce the pressure on long-term care insurance financing, and help commercial insurance companies pay attention to the design and development of long-term care insurance-related products.
In view of the current development pain points of long-term care insurance, such as the large dependence on medical insurance funds and the single financing channel, industry experts suggest that the supporting role of commercial insurance should be played to make up for the lack of financial support and empower the diversified and high-quality development of long-term care insurance.
In fact, commercial insurance has inherent advantages in integrating resources, and can combine third-party nursing institutions, nursing equipment, nursing staff and long-term care insurance by building a platform and equity investment, which will help to realize the establishment of a long-term care ecosystem.
Song Zhanjun, deputy secretary-general of the China Insurance Research Institute of Beijing Technology and Business University, believes that long-term care insurance, as an important part of the social insurance system, is inseparable from the help of commercial insurance in the process of its development and growth. On the one hand, commercial insurance fully participates in the management of social long-term care insurance; On the other hand, it has continuously launched commercial long-term care insurance products, contributing to the construction of a multi-level nursing security system.
According to reports, although China's commercial long-term care insurance products began to be promoted as early as 2005, far earlier than the social long-term care insurance pilot launched at the national level in 2016, the product scale of commercial long-term care insurance in 2021 will be about 13.2 billion yuan, accounting for only 1% of health insurance premiums.
According to the data shared by Xu Zhiyi of Jinding Capital, there are 7.74 million disabled elderly people in the 49 cities of the long-term care insurance pilot, of which long-term care insurance covers 1.72 million elderly people, with an average annual customer unit price of 16,000 and a total market size of 2.75 million. In 2030, it is estimated that the number of disabled elderly people in China will reach 100 million, and the long-term care insurance will cover 30 million elderly people, and the market size of long-term care insurance pension services will be 480 billion yuan according to the annual customer unit price of 16,000 yuan. Some medical expenses, commercial insurance costs, out-of-pocket sources, and other extended business income are not taken into account.
● There is a huge gap in commercial long-term care insurance
With the gradual deepening of the pilot of policy-based long-term care insurance, the state and the government are increasingly aware of the diversity and comprehensiveness of the care and service needs of the disabled population and related families in the aging society, emphasizing the importance and necessity of establishing a multi-level long-term care system, and guiding commercial insurance companies to provide health insurance, health management, medical services, long-term care and other wide-coverage and multi-dimensional commercial long-term care insurance products.
However, at present, there are only more than 100 related products in the commercial long-term care insurance market, which is not only far from the number of other types of insurance products, but also the phenomenon of product homogeneity is prominent. It can be said that there is a lot of room for growth in China's commercial long-term care insurance in terms of product richness and penetration.
According to estimates by the Insurance Industry Association and Swiss Re, the total demand for long-term care services for the elderly in China's urban areas in 2021 was about 1.4 trillion yuan, while the protection side composed of household expenditure and policy-based long-term care insurance and subsidies was less than 500 billion yuan, with a gap of 921.7 billion yuan. The protection gap of nearly one trillion yuan leaves a broad imagination and development space for commercial long-term care insurance (Figure 3).
In the next step, commercial insurance companies need to further tap their potential and pool strategic resources, continue to deepen the field of long-term care insurance, and promote the early and comprehensive implementation of the long-term care insurance system.
Industry experts said that on the one hand, insurance companies should fully participate in the management of social long-term care insurance, and strengthen the understanding and reserve of long-term care risks while improving the professionalism of management and management; On the other hand, we should continue to promote the development and upgrading of commercial long-term care insurance products, gradually expand the upstream and downstream industrial chain of nursing security, and develop relevant products that are recognized by the masses, have acceptable prices, and provide supporting service rights, so as to make greater contributions to the construction of a multi-level social security system.
At present, more and more leading commercial insurance companies have set up special long-term care insurance management departments. When it comes to long-term care insurance, action is more effective than planning, and it's better to think about it in practice than to rest on your laurels. Only when all parties give full play to their respective capabilities and roles, can there be hope for commercial nursing insurance, a multi-level old-age security system, and an aging society's old-age care needs can be better met.
The pension policy system has been gradually improved
According to Luo Shougui's "China Pension Industry Development Report 2021", from 2013 to 2021, China issued a total of 334 pension policies. Among them, the number of old-age care services (85) and social security policies for the elderly is the largest, followed by medical and health services for the elderly, supplies and facilities for the elderly, old-age technology, old-age financial services, old-age education and training, etc.
Since the reform and opening up, the state has successively issued 108 policies for elderly care services, 78% of which were introduced after 2013, indicating that the government is paying more and more attention to the elderly care service industry. In terms of elderly care services, the policy strongly supports the "combination of community home + medical care" and supports the home care service model (Figure 4).
Among many policies, long-term care insurance, led by the government, is considered to be the "sixth insurance" of social insurance in addition to medical care and pension, and has become an important infrastructure for market players to explore the home-based elderly care model. The national standard of "Basic Specifications for Home Care Home Care Services" launched at the end of 2023 has laid an institutional foundation for the innovation of long-term care insurance and the "insurance + home care" model.
● National standards for home care services for the elderly
In October 2023, the national standard (GB/T43153-2023) of the "Basic Specifications for Home Care Home Care Services" was officially released. This is the first national standard issued by China for home-based elderly care services, which provides a basic basis for reasonably defining the scope of home-based elderly care services, standardizing the qualification conditions of the supply entity and the content requirements of the supply process, and is of practical significance for promoting the standardization, standardization and professional development of home-based elderly care services.
The national standard is compiled on the basis of a comprehensive summary of local practices and existing standard achievements, and is compiled to meet the needs of the elderly and the development of home-based elderly care services. On the basis of a comprehensive summary of local practices, the main content of the standard is divided into five parts, including "terms and definitions", "overall requirements", "service content", "service process and requirements", and "service evaluation and improvement".
Among them, the "overall requirements" clarify the basic conditions that service organizations and service personnel should have and the basic requirements that services should meet; "Service content" includes 7 services, including life care, basic care, health management, visit and care, spiritual comfort, entrusted agency, and family living environment for the elderly, covering the main professional services required for home care; The "service process" clarifies a series of procedural requirements from consultation and reception, ability assessment of the elderly, signing of service agreements, service preparation to service implementation; "Service Evaluation and Improvement" clarifies the form of service evaluation and the requirements for feedback on the improvement of problems found in the evaluation.
Zhen Bingliang, director of the Social Welfare Center of the Ministry of Civil Affairs, introduced at the press conference that the release and implementation of national standards can on the one hand enhance the recognition of the elderly for home-based elderly care services by promoting the construction of professional and standardized services, and promote the improvement of consumer confidence and consumption willingness of the elderly; On the other hand, it can provide effective technical specification support for strengthening the internal management of home-based elderly care service organizations, and play a role in standard guidance and strengthening self-discipline.
Relevant people from the Ministry of Civil Affairs said that in the future, relatively detailed supporting standards will be formulated in a timely manner for specific service contents, further enhancing the guidance and operability of standards, and promoting the effective improvement of the accuracy and refinement of home-based elderly care services.
The layout of insurance companies is "speeding up"
There is no doubt that home care, as the most important pension scenario, will inevitably become a blue ocean track with huge potential, and it is also a new force for all parties in the pension industry chain.
As one of the important participants in the pension industry, insurance companies will inevitably play a key role in the future pattern of the home-based pension industry by virtue of their comprehensive advantages in life, health, pension and investment.
Moreover, unlike the wealth management or savings products of other financial institutions, insurance has a unique value that is difficult to replace in building "resisting longevity risks, accumulating pension wealth, and building a service ecology". On the one hand, the insurance company has a large capital scale and a long operation cycle, which is consistent with the characteristics of the funds required by the pension market; On the other hand, insurance companies have sufficient experience in capital management and product development, and the main business of insurance and pension services complement each other and can form a closed loop of business.
In fact, as the first industry to perceive the changes in the age structure of the population, many insurance institutions have already quietly laid out "insurance + home services", and combined with different sales and service scenarios to provide customers with personalized and customized home care services.
According to incomplete statistics, at present, more than 20 insurance institutions such as Chinese Life, Ping An of China, China Pacific Insurance, AIA Life, Zhongyi Life and Sunshine Life have accelerated the exploration and layout of home care service tracks.
From the perspective of the products and services provided by various companies, the types of services provided by insurance institutions to participate in the home care market are also diversified, and there are currently four main paths: one is to carry out home community care through community embedded pension micro-institutions. For example, the "Home Care" product line, one of the three major health care product lines of Everybody Insurance, provides home care services through home care services.
The second is to provide home-based elderly care services around the needs of age-appropriate transformation, housekeeping, care, and home care. For example, AIA Life's "Friendly Comfort", Zhongyi Life's "Yue Pension", Great Wall Life's door-to-door home care services focusing on the whole life cycle, and Hongkang Life's personalized pension model.
The third is to focus on disease prevention, medical services, and post-illness rehabilitation, and provide a package of health management services. For example, CCB Life's "Enjoy Health" health management service, Taiping Life's "Enjoy Family Medicine", etc.
Fourth, in response to the diversified needs of "medical, pharmaceutical, nursing, nursing, and travel", we have launched comprehensive pension solutions. For example, Ping An's home care brand "Ping An Butler", ICBC AXA Life's elderly care service brand "Sheng Hua Nian", MetLife's "360Future" family care solution, and Tongfang Global Life's health care service brand "All +" 2.0, etc.
Sunshine Insurance disclosed in its prospectus that its first-of-its-kind "Sunshine Filial Piety and Worry-free" home care service system solves the core "pain points" of the elderly's life, provides a package of health management services for elderly customers, and meets the multiple needs of silver-haired customers.
According to reports, relying on the group's overall resource advantages, "Sunshine Filial Piety" focuses on home safety, home medical care, and home companionship, integrates a number of services for the elderly, and provides home-based parents with services covering multiple projects such as video consultation with family doctors throughout the year, online drug purchase, one-click call for help when falling, sick outpatient clinic, inpatient green channel, regular nurse door-to-door basic physical examination throughout the year, and home sports and health (Figure 5).
At present, the platform-based model of home care services explored by these insurance companies is mainly based on the current stage of aging development and the current situation of the policy system. According to the Accenture report, "this kind of exploration is still based on insurance products or customer rights as the main payment method, and the business model and management closed-loop are still not yet formed (we call this state the "platform 1.0" model), and there is still a gap between the scale and mature business closed loop of future insurance product fund payment (i.e., the "platform 2.0" model)." ”
Looking forward to the future, insurance companies will establish a platform-based home care service model, which can feed back and empower the main business of insurance in terms of economic benefits. With the continuous expansion of the platform business, it can further realize customer acquisition conversion and independent operation.
For insurance companies, the short-term value brought by the development of home-based elderly care services is to meet the needs of insurance customers for elderly care services and improve customer experience through service empowerment; Promote customer reach and insurance sales through the benefits and perception of home care services. As a policy right, home-based elderly care services attract new and old customers to convert new orders and enjoy elderly care services with a good reputation for service.
The medium-term value is customer acquisition conversion. Through continuous customer reach, maintenance and activity operation, we will enhance the stickiness of old customers, attract new customers to take out insurance, and empower the main insurance business with the two-wheel drive of "customer + service". Through the digital platform, non-insurance customers are attracted to purchase and use home-based elderly care services, and the service interaction continues to convert insurance sales.
The long-term value is to establish an independent operational capability, extend from serving insurance customers, gradually make the pension service business operate independently and have profitability, and reshape the insurance and health care business ecology. The platform-based home-based elderly care service model connects supply and demand, provides high-quality services, and realizes platform service income.
In general, insurance companies + home-based elderly care have started, and more insurance companies are starting from the different roles of the platform-based elderly care service ecology to help the healthy development of the elderly care ecology and empower the main insurance business. The "insurance + home care" model requires long-term and sustained investment by insurance companies, but in the future, with the explosion of market demand, it will become an important engine for the future growth of the life insurance market.
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