“For a large country like China, the health condition of people in Beijing is definitely different from those in Guangdong province. But in the traditional insurance pricing model, we treat them the same way,” Li said. “For these platforms with large [volumes of] traffic, they can employ internet finance technologies to divide their clients into clearer categories based on health condition, regions, ages etc … every customer may have hundreds of labels.”

Further, insurance products selling online can be updated faster and offer a more diverse range of policies within one larger category of products.

Mutual aid plans are not technically insurance, as payouts are not provided by the company, and are therefore not subject to regulations from the China Banking and Insurance Regulatory Commission.

However, as China aims to build a “multi-tiered medical insurance system”, in February the government officially included online mutual aid in the national health care security system to support its development.

By 2025, China's online mutual aid industry is expected to reach 450 million users or nearly one-third of the country’s population, Ant Group’s whitepaper said.

“In the future, we hope to join hands with our partners to create China’s Kaiser Permanente or UnitedHealth model,” Shen said.

Shen has even bigger ambitions. Although Waterdrop will focus on the China market over the next three to five years, longer term he wants to introduce the model to countries involved in Beijing’s Belt and Road Initiative.