Chinese consumers shrug off Beijing’s ban on insurance gimmicks
Some consumers said the offbeat insurance products changed their perspective on financial institutions
Tech-savvy consumers have shown mixed response to the ban on smog insurance and similar products after China’s regulator clamped down on unconventional offerings designed mainly for marketing stunts.
Smaller insurers have turned to such products to quickly build up brand awareness and reach more young customers as most of the products are sold online.
However, in a new rule issued in January the China Insurance Regulatory Commission banned non-life insurers from developing eight types of products where the insured event doesn’t lead to real losses for policyholders or if the offbeat products are just a marketing stunt.
The top insurance watchdog argued that such gimmicks disrupt the market order and strayed away from the core mission of insurers to hedge against real risks.
Insurers rolled out these “innovative” products mainly via the internet after young Chinese consumers became accustomed to buying almost everything online. For example, mid-autumn moon insurance compensates a policyholder when foul weather clouds the moon during the Mid-autumn festival. Other offbeat products include World Cup insurance for when a policyholder’s favourite team is knocked out of competition.
Regulators are increasing efforts to discourage such behaviour and nurture insurance back to its tradition
“It’s a pity smog insurance and mid-autumn moon insurance are banned,” said Vicky Lai, a consumer in her 20s. “They changed my perspective on financial institutions as rigid and poker-faced players.”