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The Impact of the Development of Internet Insurance on People’s Willingness to Purchase Supplementary Medical Insurance

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DOI: 10.25236/ieesasm.2024.003

Author(s)

Leyi Jiang

Corresponding Author

Leyi Jiang

Abstract

The thirteen-fifth plan of the Chinese government started the “Internet+” initiative in 2016, encouraging internet-based innovation in various fields, including health insurance. In this paper, we apply a logit model to estimate the impact of the development of Internet insurance on the participation rate of supplementary medical insurance based on the data from The Peking University Digital Financial Inclusion Index of China and the Chinese Family Panel Studies (CFPS) from 2014 to 2018. First, we find that Internet insurance promotes growth in the participation rate of supplementary insurance in China. Second, the study finds possible channels through which such an effect operates: as Internet insurance develops, people will be more risk-averse. And since people are more risk averse, they are more willing to purchase supplementary medical insurance to transfer their risks. Finally, people of different incomes and ages usually get different exposures to Internet insurance and have different responses to the development of Internet insurance. The findings provide evidence of how Internet insurance can positively affect the supplementary medical insurance market. In order to encourage Internet insurance, regulations by the government, engagement by the insurers, and recognition by the general public towards the Internet are important.

Keywords

Internet insurance, Supplementary medical insurance, China