The Asian Development Bank (ADB) put $37.3 million into Chinese health insurer Fosun United Health Insurance to expand coverage for the country’s rapidly aging population, according to bank announcement. The investment marks ADB’s first direct equity stake in an insurance company. Two other investors—the International Finance Corporation and Shanghai Fosun Pharmaceutical—each put in the same amount. FUHI is one of only seven specialized health insurance companies in China. The money will help the company grow its business and meet capital requirements.
China faces a demographic time bomb as its population ages fast. By 2035, an estimated 400 million Chinese will be 60 or older—30% of the entire population. The current public health system can’t handle that kind of demand. Women face extra challenges getting insurance because many work informal jobs and have less financial knowledge about insurance products.
“ADB’s investment in FUHI will help strengthen the commercial health insurance market in the PRC, providing essential coverage for medical and long-term care needs, particularly for the elderly and women,” said ADB Country Director Asif Cheema. FUHI plans to create insurance products tailored specifically for women and will run financial literacy programs. The company will also put 55% of ADB’s investment into green bonds that fund environmentally friendly projects. ADB gets to nominate someone to FUHI’s board to help with oversight.
FUHI started in 2017 as China’s sixth professional health insurance company. It sells medical insurance, critical illness coverage, nursing care insurance, and accident protection. The company wants to become a leader in lifetime health management across China.
The partnership should help more Chinese people get private health insurance to supplement the government system, especially as medical costs rise and the population gets older.
