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Migrant Workers’ Personal Accident and Health Insurance

About the Project
Project start date: 
Mar 2009
3 years
País de operaciones: 
Region of operations: 
Asia and the Pacific
Life - personal accident
Project Thematic Focus: 
Insitutional models and business processes

Project Basics

On October 20, 1949, the People’s Insurance Company of China (PICC) was established by the Chinese government as a nationwide wholly state-owned insurance company offering various types of insurance services. Today, PICC remains a 61% state-owned enterprise.

In early 2008, PICC applied to the Microinsurance Innovation Facility for an innovation grant seeking support for the introduction of a migrant worker personal accident and health product. The grant was awarded and fully contracted in March 2009.

The term “migrant worker” for China refers to farmers who have become workers - people who used to be farmers, but have now left the countryside to find jobs in the cities.  This is a special group who are considered rural residents in the household registration system. They own farmland according to the land contract system, but now do non-agricultural work and live on wages.

For the most part, migrant workers lack any basic government-provided social net and receive little or no social security funds.  Statistics from Sichuan Province, which is China’s largest exporter of migrant workers, show that among migrant workers working in enterprises above county level only 3.14% have industrial injury insurance, 0.84% are covered by medical insurance, 0.83% receive unemployment insurance and 2.99% are provided with pension payments.  Those who receive pension or medical benefits find it very difficult to transfer the benefits to their home because cross-province transfer of social security is not yet available in China.  Migrant workers, who are among the poorest in the population, have to rely on their own accumulated funds rather than social security.

The PICC innovation grant project will address both the need for protection with the introduction of a personal accident and health insurance product, and the specific migrant worker need for “non-local” claims processing.

The project proposes initial introduction of the product in two provinces, with an expansion to twelve provinces by project end.  Each province has considerable flexibility to select distribution channels (including government offices), customize the base product and commission structure, and design and implement their own marketing and consumer education strategy.