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On November 6, EqualOcean held a meeting with Peng Xuan, co-CEO of Yuanxin Huibao, getting a glimpse into his insurance firm's business. Here is how the 'insurance products for cancer' got started in China – and got successful.
Peng Xuan proudly stands beside the parent company's front desk. Image: Courtesy of Peng Xuan
"We had generated the data and medical information from hospitals, doctors, pharmacies and patients – so we created one of the most sophisticated medical insurance products," said Peng Xuan (彭煊), co-CEO of Yuanxin Huibao (圆心惠保), who then explained how he decided to venture into the medical insurance field.
Incubated by the parent company Yuanxin Keji (圆心科技) and founded in July 2019, the young medical insurance developer has carried its Series A funding round from Sequoia Capital and Qiming Venture Partners (启明创投), worth CNY 50 million.
The company is utilizing sister company, Miaoshou Doctor (妙手医生) ecosystem to utilize medical big data and design accurate insurance products, drawing on info from 20 million registered users, 3 million DAUs, 30,000 doctors and hundreds of pharmacies in China.
Peng Xuan is an experienced insurance professional. He used to serve as Chief Product Officer at an online insurance provider, 1an.com (易安), and holds his PhD in Software Engineering from the Beijing Institute of Technology.
Peng Xuan: Yuanxin Keji (圆心科技) is the parent company and controlling shareholder, with over 56% of the shares of Yuanxin Huibao (圆心惠保). The parent company provides tremendous support for our technical development IT team.
We have carried out a Series A funding round with Sequoia Capital and Qiming Venture Partners, and have already moved into to a Series A+ period, the company is at a fast-paced growth process.
Our parent company was not satisfied with the scope of its business and initiated a sophisticated insurance product for those high-end cancer drugs to extend its service coverage and ecosystem, thereby creating Yuanxin Huibao.
Peng Xuan: I used to work for 1an.com (易安保险,) one of the big-four, licensed online insurance companies in China. Our chairman used to work for the medical arm of PingAn Insurance. The founding team members are experienced in China’s insurance scene: we recognized the significance of medical insurance and seized the opportunity.
I received another report on September 30, postulating that the health insurance market size has already surpassed CNY 500 billion, with over 30% YoY growth. The market size of online medical insurance reached CNY 70 billion, which was only CNY 35 billion in 2018.
On top of that, we have also realized the disruptive trends in the medical insurance market. We had to transform the medical insurance products into more value-added, personalized ones. Therefore, we created a sophisticated cancer insurance product, covering most of the expensive tumor and cancer drugs that have not yet been covered by the Chinese Health Insurance System (医保), and sold these to the insurance providers. Our job is to design and develop cancer insurance products for the insurance companies and providers to sell to their end-users.
The competition in the Chinese insurance market is beyond fierce. When a company creates a lucrative product, others set about developing a better one. For cancer drugs, heavyweights in China’s insurance field have no choice but to use our products.
Peng Xuan: In only four months, we started to sell our products to WeChat, Ant Financial and other major players, extending the scope of our service to almost the entire Chinese population and dominating more than 50% of the insurance market for cancer drugs. We're also in talks with the largest insurance groups, such as Taiping General Insurance (中国太平) and Sunshine Insurance Group (阳光保险).
Our parent company provided us with related big data and technical support. And we created an executable medical insurance product. We could also use the parent's oncologist and pharmacy network. Meanwhile, we obtained all the related insurance licenses.
Our clients are the cash-rich insurance companies with great prepaid-premiums in their case, and our cash flow is satisfactory. Despite the fact that we’re quite a latecomer in the field, we have the largest market share in the cancer-related insurance field.
While our “competitors,” Medbanks (思派) and Ace United (上海美信) have annual revenues of less than CNY 20 million, we can generate over CNY 30 million from one case. There is no doubt that our business model is superior. By the way, this story started with no more than seven people on July 1.
Peng Xuan: That’s partially thanks to the parent company and my image in the sector. Sequoia China had already achieved over 10-fold returns from its investment in our parent company, and that is how they were interested in Yuanxin Huibao in the first place.
As to Qiming Capital, our relationship is relatively deeper. They knew me since I had been a consultant for them for years in online insurance and insurance-related businesses in China. They had realized my potential and advised me to start up my own. So here we are.
This network provided me with one of the best advantages in the industry. I and my team's connections allowed us to reach the c-Suite members of any insurance company in China, making it possible to promote our products to the decision-makers quickly, and efficiently.
Peng Xuan: We have been accumulating a tremendous amount of data from the hospitals and pharmacies and online health consultancies. Meaning that we know how many people have been complaining about specific problems, and what proportion of this demand is serious and needs to be dealt by the hospital or clinic and by which medicines exactly they would have been needed. That is a prerequisite to creating any above-average medical insurance product.
Cancer is different. If you’re diagnosed with it, you cannot question whether you should spend time visiting the hospital or going to the pharmacy. People sell everything and use all their resources to reach the best services and the best doctors when they are diagnosed with it. Yet resources are limited in China.
We help people diagnosed with cancer to reach those hospitals that are in high demand: Tianjin Medical University and Cancer Hospital (天津肿瘤医院), Chinese PLA General Hospital (301医院) and Peking Union Medical College Hospital (北京协和医院) in Beijing ,and several other major hospitals in the first and second-tier cities, by guaranteeing that they will be treated with priority, while they would have need to wait for months to reach treatment if they hadn’t had purchased this insurance. This is an unprecedented coverage for cancer insurance products in China.
Just as EqualOcean's motto is ‘Tech For Equal’ ours is ‘Cancer Treatment for Equal.’ We want all the Chinese to reach high-quality cancer treatment.
The structural problems of China in cancer treatment are creating opportunities for insurance providers. After successfully serving the Chinese market, we’re planning to get a clearance from the FDA so that Chinese users can use the best drugs and services from all over the world.
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