65 million members signed in less than one year
Alibaba (BABA) is quietly running a booming health insurance side business through its Ant Financial affiliate. In October last year, Ant Financial launched a healthcare-coverage product known as Xiang Hu Bao, which covers members’ treatment for diseases such as cancer, Ebola, and Alzheimer’s disease, according to a report by Bloomberg. Less than one year down the road, Ant Financial’s healthcare coverage product has already signed up about 65 million members. Now Ant Financial is aiming to reach 300 million members in two years.
Of note is that Ant Financial is leveraging artificial intelligence technology to automate a lot of functions in its healthcare coverage arm that it only runs with a small team of workers. For example, the 65 million members are managed by a team of only 50 people, suggesting that this could be a lucrative business as the company has found a way to control costs.
Global healthcare coverage market to clock $2.2 trillion in revenue in 2024
Heath insurance is another area where Alibaba is going neck-and-neck with Tencent (TCEHY). Tencent, which backs Alibaba’s e-commerce rival JD.com (JD), is into the membership healthcare coverage business through a unit known as Waterdrop. The Waterdrop has signed up 70 million members on its healthcare coverage product.
Health insurance is becoming an attractive field for e-commerce companies. Amazon (AMZN) teamed up with Berkshire Hathaway (BRK) and J.P. Morgan (JPM) to launch a healthcare coverage program for their employees.
The global healthcare insurance market generated $1.7 trillion in revenue in 2018 and is forecast to grow to a $2.2 trillion revenue industry by the end of 2024, according to Prescient & Strategic Intelligence projections.