Ant Financial renames Xiang Hu Bao as a mutual aid plan, no longer an insurance product
Alibaba's financial affiliate Ant Financial Services Group and its partner upgrade a high-profile health insurance product sold on mobile payment platform Alipay to a “mutual aid plan” yesterday as a result of regulatory pressure. The new plan will be independently operated.
Jointly launched by Ant Financial and Trustmutual Life Insurance Co, Xiang Hu Bao attracted more than 10 million policy-holders or members in a week on its October 16, 2018, debut.
Unlike conventional insurance plans, Xiang Hu Bao allows its members to enjoy protection “for free” as long as they meet certain credit requirements. When a policy-holder falls ill, fellow members then “lend a helping hand” by sharing medical expenses.
A member may also receive assurance cash.
However, industry regulators have warned of misleading product promotions and insufficient information disclosure.
Trustmutual Life said that it will stop selling the product.
And the company will no longer be the underwriter of the revised mutual aid plan, which will be solely operated by Ant Financial.
Ant Financial said that it will make some adjustments such as reducing the management fee from 10 percent to 8 percent and capping the amount of money that each member will have to shoulder during the whole year of 2019.