Jack Ma’s Ant Group is in talks with regulators in China to revive its crowdfunded medical coverage unit, Xiang Hu Bao, and develop it into a regulated company, The Wall Street Journal reported on Thursday (May 6), citing sources.
Xiang Hu Bao — which means “mutual treasure” or “mutual protection” — has 91 million members that rely on its mutual-aid service. Forcing the unit to shutter could be detrimental to the people who need the service or who have funded payouts for other members, sources told WSJ.
The crowdfunded medical coverage has no signup fees, and members can get as much as $45,000 for life-threatening illnesses or injuries. Members have had to contribute less than one cent toward each claim, per the report.
It is anticipated that Xiang Hu Bao will be transformed into a commercial product regulated by the banking and insurance arms in China, according to sources. Further, Ant Group is collaborating with a licensed insurance firm to facilitate Xiang Hu Bao’s conversion to a regulated medical insurance plan. Talks between the government and Ant are ongoing and no direction has yet been decided, sources said.
Introduced in 2018 as an insurance product, Xiang Hu Bao is not yet profitable, and has seen members drop off from its high of 106 million. Memberships started declining after Ant Group’s initial public offering (IPO) was halted by regulators in November 2020.
Regulators in China are investigating government officials about how Ant Group was able to get fast approval for a dual listing in Shanghai and Hong Kong. Beijing is also probing which companies would have benefited the most from Ant’s IPO.
Last week, global investors lowered their expectations for Ant Group’s future revenue and profitability. Before the company’s IPO was scrapped by state officials, Ant had a valuation topping $315 billion. Regulatory filings in February pegged Ant’s value at $144 billion.
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