This article is by Daniel Tao, Zhibao Technology Inc
On some fundamental level, we understand that every day is a series of activities, each with some level of risk. Some are more obvious than others; scuba diving off a boat in the middle of the Indian Ocean is clearly risky. But what about the risk every time we call an Uber and get in the back seat of a stranger’s car? What about the risks flowing into our houses through our natural gas pipes?
Market data shows the average American has seven insurance policies at any one time. These typically include medical, auto, renters’ or homeowners’ insurance etc. Our instinct is to assume that between all our policies, all those daily activities are covered, right?
Lessons from Abroad
In my home market of China, things are not quite the same. While China might be the world’s second largest insurance market by total premium, it is heavily skewed by commercial insurance policies covering our skyscrapers and metro systems; in many ways, the commercial side closely resembles the insurance market in London or New York.
Dig deeper, and the individual side shows a dramatically different picture. There is no way to misread the data – Chinese individuals are drastically underinsured. Reporting from Swiss Re shows that the total insurance penetration in China is between 3.9% and 4.1%, drastically below the 11.5% in the US. Density shows and even starker shortfall, around $500 per person versus nearly $7000 in the US. When mandatory coverages, such as auto, are excluded, the numbers are even more dramatic, with non-life density halving again to under $250 per person.
So, what is driving this divide, and how are the preferences and habits of the next generation of consumers influencing the development of the market?
Market reforms in the 1980s spurred the breakneck development of an affluent middle class in China. Within just one generation, people could own houses, cars, and businesses, upending the lifestyles and dreams of hundreds of millions. However, while people adapted to their newfound wealth, their understanding of wealth and security lagged.
Before the advent of these golden years, the previous generations suffered through war, famine, and revolution. For older generations, the golden rule was to save every cent possible, for only your own savings could be counted on when times get tough. To this day, this habit has persisted – World Bank figures show that China’s gross national savings rate has hovered at around 45%, compared to 25% worldwide and 18% in the US. Objectively, this has created a culture where “self-insurance” is the dominant method of protection, rather than state or commercial coverage.
Next-Generation Insurance for the Next Generation of Consumers
Chinese Generation Z, or “95Hou”, literally people born on or after 1995, are facing issues that are completely different compared to their parents. Significant uncertainty driven by record youth unemployment, a stagnant but somehow still unaffordable housing market, and a wholehearted embrace of a mobile-first lifestyle mean that this generation is facing a completely new set of issues.
It’s against this backdrop that we’ve seen the rise of a new way of servicing this next generation of consumers. Consumer preferences fostered by years of smartphone-centric living have given rise to ultra-short term, gamified insurance products. I just ordered lunch, a white-collar staple of salad and coffee to eat at my desk. My App says it’ll be here at 12:05pm, but just in case, I can buy “insurance” that gives me a little cash payout if it’s more than 25 minutes late. Why not? It’s less than US$1.
Just like Gen Z in the west, with a focus on leisure and lifestyle yoked to an ever-shortening attention span, it’s no wonder that reporting shows more than 84% of Chinese “95hous” reported a preference for buying insurance online.
Finding Customer Demand In-Situ
For insurance companies, agencies, and brokers, this shift poses a fundamental question – how do we find the next cluster of gamified demand?
It’s in this environment that companies like Zhibao Technology have found new ways to help individuals and small- and medium- enterprises (SMEs) protect the lives and business they’ve built. That means helping them understand the risks they face and guiding them in sourcing and purchasing appropriate insurance or risk mitigation products.
The answer is deceptively simple – work directly with platforms, companies, associations etc. that these “95 hous” already interact with to offer targeted, intuitive, and affordable insurance options.
This approach has multiple advantages. Firstly, by targeting the insurance down to a specific activity or scenario, the potential risk and the corresponding insurance product become easier to understand. Rather than a nebulous “Platinum plan,” offer specific types of coverage to marathon runners to cover their potential accidents and medical conditions sustained during their race. Secondly, this approach meets consumers in an environment they are already familiar with – embedded within a site they already know and love.
This 2B2C (to-business-to-consumer) approach helps find pockets of in-situ demand, allowing insurers and brokers to focus diffuse demand into actionable clusters.
Zhibao illustrates the scale this model can reach. Over the past decade, the company has worked with more than 3,100 distribution platforms and issued policies to 27 million customers in China. In sectors like sports and event coverage alone, it has issued more than 1.4 million policies in 2025.
Where do we go from here?
I don’t think it’s a joke or an exaggeration to say that most people dislike buying insurance. I think anyone who’s tried to figure out why the “platinum plan” is so much more expensive than the “bronze plan,” or tried to do the mental arithmetic to see if they can get away with a $30,000 deductible can agree that the current system isn’t ideal. Who knows whether future generations will even attempt the ordeal.
Unquestionably, current insurers and brokers will need to adjust their way of doing business to cater to this new generation of customers; this generation has very different problems, and even more diverse ways to solve them.
By looking abroad, we can catch a glimpse of a new system, perfectly targeted to meeting this new generation of mercurial consumers. If we are able to provide insurance solutions that solve their problems, in a manner and speed that is acceptable to them, then we could see a new golden age of insurance on-demand insurance products covering anything from late burritos, to sporting events, to lifestyle trips and music festivals.
About the Author
Daniel Tao is the Underwriting & Product Director & Investor Relations Director at Zhibao Technology Inc., a leading and high growth InsurTech company primarily engaging in providing digital insurance brokerage services through its operating entities in China. To business-to-customer (2B2C”) digital embedded insurance is the Company’s innovative business model, which Zhibao China Group pioneered, launching the first digital insurance brokerage platform in 2020, which is powered by their proprietary PaaS (“Platform as a Service”).
Zhibao has developed over 40 proprietary and innovative digital insurance solutions addressing different scenarios in a wide range of industries, including but not limited to travel, sports, logistics, utilities, and e-commerce. Zhibao acquires and analyzes customer data, utilizes big data and AI technology to continually iterate and enhance its digital insurance solutions. This iterative process, in addition to continually improving its digital insurance solutions, will keep it abreast of the new trends and customer preferences in the market. For more information, please visit: ir.zhibao-tech.com.
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