Where Lies the Rationale for KangAi Commune's Long-Term Existence?

Social insurance and commercial insurance both provide protection, but each consumes some of the premium in the process. Social insurance has a cost ratio of 10–20%; commercial insurance has different payout ratios in different companies — some 50–70%, some as low as below 30%. That is to say, of every 100 yuan people pay, only part goes to protection payouts, while a large part is consumed along the way.

If KangAi Commune, with the help of technology and new forms of organization, can keep that consumption below 5% (currently under 2%), then its cost-performance advantage will stand out. This, we believe, is where KangAi Commune's economic value lies and the basis for its long-term existence.

Of course, the three cannot be compared exactly; they differ in all sorts of ways. Social insurance, for instance, is a guarantee underwritten by the state, and commercial insurance also offers a degree of rigid payout assurance. Mutual aid, for its part, wins on flexibility and a low threshold. Our hope is that a combination of these approaches (rather than replacement) will place everyone under multiple layers of protection.