40 market data is much harder to obtain for lower-income segments. Without such data, insurers can neither design responsive products nor market effectively to lower- income segments, even though they represent a much larger potential market. So Zhou Ling designed YiBao’s model to work in partnership with charitable organizations. For one thing, employees of those organizations tend to be financially vulnerable themselves, with low incomes, low levels of household savings, and insufficient insurance coverage. YiBao’s customer base in its first two years has consisted primarily of charitable organizations’ volunteers, staff members and their families. Along with providing the initial customer base, charitable organizations serving low- and moderate- income populations also provide YiBao with valuable grassroots insights into those populations’ priority needs for insurance. YiBao analyzes that information and advises insurers about how to design the most responsive products, receiving a commission (usually 10-15 percent) on the resultant policies sold. YiBao also uses its own resources for promotion and sales of the insurance products, relieving the insurance companies of one of their biggest operating expenses. That major cost savings is passed on to the low-income consumers in the form of more affordable premiums which in turn means more policies sold. The number of people reached with YiBao products more than doubled between 2015 and 2016. By the end of 2016, after less than two years of YiBao’s existence, more than 21,000 people had received coverage, and the equivalent of nearly USD $92,000 had been paid out. Final 2017 growth figures are likely to be even higher. Although its business model is still being refined, YiBao is poised for success in the future for several reasons: Ì Ì Distribution: YiBaoworksthroughexistingcommunity- based organizations, opening up distribution channels that will allow them to engage hundreds of thousands of people via a trusted source. Ì Ì Product Innovation:  YiBao is committed to product innovation based upon unique insights. For example, they developed a new type of group insurance specifically for autistic children, who are typically uninsurable. The YiBao team learned that although all schools are required by law to carry insurance for all students, when accidents do happen, the law also pits the schools and the parents against each other in a fight to determine liability. So YiBao developed a new product where the students are covered regardless of whether they are in school or not at the time of the accident. This solves a real problem for the community, and the pricing is such that parents and schools can both share the cost of the coverage. So far over 6,000 children have been covered by this product. Ì Ì Digital Technology: China, like the rest of the world, has come a long way since the days when mobile phones were a luxury exclusively for the well-off. Every year the price of digital technology drops and the quality and accessibility improves, opening up huge opportunities to serve low-income people with digital financial services. YiBao is working actively to improve their IT systems so that they can provide better service to all their customers. They are establishing internet sales channels, using PC-based and mobile platforms, and are conducting marketing and promotion campaigns via WeChat, the Chinese social media mobile app that boasts 980 million active monthly users. YiBao’s strategy calls for reaching massive scale by expanding its intermediary role to include public/private collaborations. Government ministries have significant resources at their disposal for the protection and financial aid of low-income, vulnerable groups. But the staffs of those ministries are not experts in insurance product design or delivery, making them reluctant to engage directly with insurance companies. YiBao plans to act as a specialized third party, brokering collaborations to design and develop insurance products for which the government can provide funding. These products will safeguard the health and stability of the low- and moderate-income majority, a vital public objective on whichChina’scontinuedeconomicperformancedepends. YiBao believes that its model can scale up to serve a significant share of the uninsured and underinsured households in China. They also hope it can provide a useful blueprint for other nations seeking to make insurance markets work for the majority. View the original article on NextBillion