Amazing!

A newly hired analyst who has not read the 387 page annual financial statements disclosed by the six major professional health insurance companies may think that in the trillion dollar trend of health insurance, these six companies should be making a lot of money, right?

However, the fact is that three out of these six companies have not yet made a profit. Among the three companies with positive operating profit (total profit), Taibao Anlian Health only earned 40596 yuan throughout the year. This money can only be used to rent a 1000 square meter office building in Lujiazui, Shanghai for one week.

On a macro level, health insurance is definitely a track that most VCs seek to easily obtain excess returns. In an industry with an annual growth rate of over 30%, finding another company that continues to grow in the industry can result in excess returns by combining the two.

But the fact is, this industry is not yet going so smoothly. The traditional production relations in the industry are still continuing their historical advantages, while the power of innovation is hindered by highly regulated data. If health and medical data are not truly integrated, actuarial and risk control will be difficult to advance, and good health insurance products will not be able to be launched.

Why are most of these six professional health insurance companies limited to losses, even though they are located upstream in the industry chain? What kind of situation are they in, what pain and growth are they experiencing, and what hopes and dreams are they carrying?

Therefore, Arterial Network interprets the financial statements of these six major professional health insurance companies for the year 2019 and previous years in order to provide answers to these questions

There are currently seven professional health insurance companies in China, with PICC Health being the earliest established and approved in March 2005. Four professional health insurance companies, including PICC Health, were established between 2005 and 2006; Ruihua Health was established the latest, only in May 2018.

In terms of business scope, all seven companies are roughly similar. For example, Kunlun Health's business scope includes "various RMB and foreign currency health insurance businesses, accidental injury insurance businesses; health insurance businesses that are in line with national medical security policies and commissioned by the government; consulting services and agency businesses related to health insurance; reinsurance businesses related to health insurance; capital utilization businesses allowed by national laws and regulations; and other businesses approved by the China Insurance Regulatory Commission.

In terms of business areas, there are currently significant differences among companies. PICC Health has the widest business scope, covering the vast majority of the country's

Provinces (municipalities directly under the central government, autonomous regions, and cities specifically designated in the state plan), while Taibao Anlian Health only operates in four regions: Beijing, Shanghai, Guangdong Province, and Sichuan Province. However, it is worth noting that with the rise of Internet channels, regional barriers may be broken, and Fosun United Health and other development in insurance Internet channels in recent years deserve attention.

The differences in business area and establishment time to some extent affect the revenue and asset size of the enterprise. Among the six major professional health insurance companies, PICC Health, which has the longest establishment time and the largest operating scale, has an absolute leading revenue scale. In 2019, PICC Health achieved a revenue of 21.579 billion yuan, more than the total of the other five companies.

The total operating revenue of the six major professional health insurance companies in 2019 was 38.899 billion yuan, accounting for 5.5% of the original premium income of health insurance in 2019.

PICC Health also has an absolute leading asset size, with an asset size of 41.429 billion yuan in 2019; Ruihua Health, which has only been established for two years, has the smallest asset size of only 316 million yuan.

In terms of profit, Ping An Health is in a leading position, achieving an operating profit of 581 million yuan in 2019.

After analyzing the data of the six major professional health insurance companies, we can see that their development in the past year or two can be described as mixed: the good news is that their insurance revenue has outperformed the market, and companies such as Fosun United Health and Ping An Health have doubled. Specifically, in terms of health insurance business, each company has achieved growth of over 50%, far exceeding the market; Unfortunately, although professional health insurance companies are on the rise, their profitability is not optimistic. Only Ping An Health and Kunlun Health have achieved considerable profits, while others feel that they are still in a state of confusion.

From multiple dimensions such as policies, market size, and market demand, 2020 is destined to be a "big year" for the development of health insurance, and professional health insurance companies have unique opportunities.

From the practical situation characterized by the industry, professional health insurance companies may break through from the following three aspects:

Firstly, we should return to the concept of 'insurance by name'. From the top 5 premium income products of these 6 professional health insurance companies, it can be seen that several companies have a serious shortage of long-term medical insurance products, and their income still relies on sustainable financial products, which deviates from the current "big policy". The real direction is to break away from the old path and design and develop products that can provide health and medical security.

Secondly, the current level of technological and information technology in the industry is insufficient, and this issue is more evident in the channels. The health insurance industry is still a relatively conservative and traditional industry, and users still rely heavily on paper copies and image copies for insurance, which hinders the accumulation of data and the application of technology. If full process informatization can be achieved, innovation in technologies such as artificial intelligence will help the entire industry enter a broader sea of stars.

Thirdly, health insurance companies should focus on medical services. Users buy insurance not for the purpose of insurance, but for the purpose of enjoying medical security and good medical services. If "health insurance" is divided into two words: "health" and "insurance", then users must buy "health". In this regard, professional health insurance companies should promote the management of users' health, the convenience of medical treatment, the convenience of insurance claims and reimbursements, etc.

From the current situation, it may be a moment for all participants in the health insurance industry, including professional health insurance companies, to stand on the horizon again.

Down to earth, looking up at the stars