Over 60% of short-term health insurance claim payout rates are below 50%

As an important supplement to residents’ health protection, short-term health insurance has become widespread, serving as a key link between basic medical insurance and commercial insurance. The claims ratio is a core indicator measuring the coverage value, pricing reasonableness, and operational sustainability of these products. According to incomplete statistics from Beijing Business Daily, as of March 8, 132 insurance companies have announced their 2025 annual short-term health insurance claims ratios. Overall, the current industry claims ratio for short-term health insurance is not high; over 60% of insurers have claims ratios not exceeding 50%. What factors influence the claims ratio? Is a higher claims ratio better? What trends can we expect in the future?

A higher claims ratio is not necessarily better

Short-term health insurance refers to health insurance products sold to individuals with coverage periods of one year or less, without guaranteed renewal clauses. The most well-known examples are million-dollar medical insurance and惠民保 (Huimin Bao).

According to the “Notice on Regulating Short-term Health Insurance Business,” insurance companies should disclose the overall comprehensive claims ratio of personal short-term health insurance business on their official websites every six months. The claims ratio for the first half of the year should be disclosed no later than the end of July; the annual claims ratio should be disclosed no later than the end of February of the following year.

According to incomplete statistics from Beijing Business Daily, 132 insurers have already published relevant data. The median claims ratio among these 132 insurers is 42%, and the average after removing the top three and bottom three extreme values is 40.72%.

Fu Yifu, a special researcher at Sichuan Commercial Bank, told Beijing Business Daily that the claims ratio for short-term health insurance is primarily affected by product design. The stricter the coverage scope, deductible, payout ratio, and exclusion clauses, the lower the claims pressure. Second, customer demographics and risk control also play a role—differences in age, health status, and occupational risk among policyholders significantly affect claims probability. The strictness of underwriting directly determines subsequent claims. Additionally, external factors such as medical inflation, changes in medical behavior, and regulatory policies on health insurance also influence claims costs, collectively determining the final claims ratio.

Is a higher claims ratio better for short-term health insurance? Not necessarily. If a product’s claims ratio is too low, it indicates that the insurance company retains a larger proportion of the premiums paid by policyholders, making such insurance less cost-effective for consumers. Conversely, if the claims ratio is too high, insurers may stop offering the product due to unprofitability, and consumers who have purchased the product for years may lose renewal options, which is also unfavorable. Industry experts suggest that a reasonable claims ratio for short-term health insurance is between 60% and 80%. This range balances good claims experience for consumers and financial stability for insurers.

Based on this standard, the overall claims ratio for short-term health insurance among insurers is relatively low. Currently, 86 insurers have claims ratios not exceeding 50%, accounting for 65%. Fu Yifu pointed out that the industry-wide low claims ratio reflects that short-term health insurance remains in a stage of strict risk control and cautious coverage. On one hand, insurers adopt conservative underwriting and responsibility settings for profitability and safety reasons; on the other hand, issues such as product homogenization and insufficient inclusive coverage limit consumers’ actual benefits.

How to enhance consumer experience

Data from the State Administration of Financial Supervision shows that in 2025, commercial health insurance premiums reached 997.3 billion yuan, just short of the industry’s expected trillion-yuan milestone.

As a popular product in the current health insurance market, short-term health insurance’s importance is self-evident. How to increase consumer acceptance, improve user stickiness, and raise claims ratios are the most direct approaches.

Industry insiders predict that with continued regulatory guidance encouraging insurance to return to its core purpose of protection, and efforts to develop inclusive products, product responsibilities will gradually relax, and coverage will become more comprehensive. Meanwhile, the customer base will expand to include elderly and chronic disease populations. Coupled with rising medical costs, claims expenditures are expected to steadily increase. Intensified industry competition will also push insurers to enhance coverage attractiveness and proactively offer concessions.

To truly improve consumer experience, simply increasing the claims ratio is not enough. Fu Yifu suggests that short-term health insurance should simplify terms, broaden coverage, lower deductibles, and launch more inclusive versions to make protection more accessible to the general public. Service improvements should include streamlining medical processes, providing health management, appointment booking, hospitalization advances, and chronic disease management—shifting from “post-claim” to “pre- and mid-claim” services. Claims processing should be digitalized, with instant claims, direct payments, and reduced paperwork and waiting times to ensure transparency and convenience. Risk control should rely on precise underwriting and anti-fraud measures instead of excessive restrictions, balancing risk management with ease of application and claims for normal customers.

Beijing Business Daily Reporter Li Xiumei

(Edited by Qian Xiaorui)

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