Does Online Mutual Aid Threaten Commercial Insurance’s Turf?

1. The Claim That It “Took Insurance’s Cheese” Lacks Data Support

Since online mutual aid arose, a view has circulated in the industry: that online mutual aid has seized commercial insurance’s market and taken the insurance industry’s “cheese,” and that this is the core reason it later came under industry regulation and restriction. This claim looks logical and is highly contagious, but deeper analysis reveals a fatal weakness — it lacks any support from real data, and is in essence a one-sided, subjective assertion.

It cannot be denied that online mutual aid once had a huge number of participants, with extremely broad reach. But “a great many participants” absolutely cannot be equated with “a shock to the commercial insurance market.” To establish that online mutual aid and commercial insurance are in strong substitute competition, one must answer several core questions: absent online mutual aid, how many of those who took part would originally have bought commercial insurance? After joining mutual aid, how many voluntarily gave up insurance products they had planned to buy? Did the overall premium scale and national penetration rate of domestic commercial health insurance fall markedly because online mutual aid appeared? After large numbers of online mutual-aid platforms shut down, did the figures for commercial health insurance recover or grow noticeably?

Without precise data to support it, to conclude that online mutual aid has squeezed commercial insurance’s room to survive, merely because both focus on critical-illness risk protection, is a purely arbitrary judgment. Fundamentally, online mutual aid and commercial insurance are two entirely different models of risk protection, and there is no direct relationship of substitute competition between them.

2. The Core Mechanistic Difference: Certain Protection vs. Probabilistic Cost-Sharing

The most fundamental difference between the two lies in the nature of the protection they offer: commercial insurance sells certain protection, while online mutual aid offers the possibility of group risk-sharing.

Commercial insurance operates on a mature contract system, professional actuarial models, adequate capital reserves and strict industry regulation. As long as the policyholder meets the terms of the insurance contract, the insurer must fulfill a rigid obligation to pay. To maintain that absolute certainty, insurers must hold sufficient capital and risk reserves and build solvency management, reinsurance risk control and a full operational and service system; layer upon layer of risk control ultimately forms the operating cost of commercial insurance and determines its pricing model and service standards.

The operating logic of online mutual aid is completely different. Its core vehicle is a mutual-aid community formed spontaneously by the public, following the rule of “one person in trouble, everyone shares the cost.” There is no corporate capital to fall back on, no promise of a rigid payment obligation equal to that of commercial insurance; it runs entirely on community rules and members’ consensus.

These utterly different operating mechanisms mean the two suit entirely different populations and needs. Those with better economic conditions, who seek stable protection and need certainty as a backstop, will choose commercial insurance first; those with limited income who cannot yet afford high premiums, and who want to build a basic line of defense at very low cost, are better suited to online mutual aid. The triple difference in price threshold, certainty of protection and mechanism of responsibility means that their core service populations are essentially staggered.

3. Not a Competitor, But a Market Cultivator for Commercial Insurance

Far from squeezing the market, online mutual aid has actually been a natural market educator for commercial insurance, cultivating vast numbers of potential users for the insurance industry.

Before online mutual aid became widespread, a great many ordinary people had weak risk awareness: they neither understood the financial shock that critical illness and accidents bring to a family, nor the point of arranging risk protection in advance, and they remained outside every protection system. The extremely low barrier to entry of online mutual aid gave ordinary people their first contact with professional protection concepts such as health disclosure, waiting periods, coverage scope, definition of liability and risk-sharing.

When users join mutual aid voluntarily, it is in essence an awakening of risk awareness — it means they have begun to accept the logic that “personal savings cannot withstand major risks; we need to rely on shared effort.” And that risk awareness is precisely the core social foundation of the commercial insurance industry’s development.

Looking at the user growth path, online mutual aid is an important transitional stage in the public’s upgrading of protection. Many users can initially afford only low-cost mutual-aid protection; as personal income and family assets rise, they gradually become dissatisfied with mutual aid’s non-certain protection and actively seek higher coverage and more stable, better-regulated commercial insurance — completing the upgrade from mutual aid to commercial protection.

This also means online mutual aid performs an important and easily overlooked function: with an extremely low threshold, it brings vast numbers of unprotected people into the risk-protection system, continuously supplying precise potential users to the commercial insurance market.

4. Grounded in the Social Security System: The Two Form a Graded, Complementary Ladder

Placed within the larger framework of a multi-tier social security system, the complementary relationship between the two becomes clearer. Public health insurance, social assistance, charity, online mutual aid and commercial health insurance are not mutually exclusive substitutes in competition, but a complete, graded protection ladder with distinct roles, each suited to groups with different income levels, risk appetites and protection needs.

Low-income groups can rely on online mutual aid to meet the basic need of “having some protection at all”; as income rises, they gradually address whether that protection is adequate; and once their economic situation improves further, they seek high-coverage, high-certainty, high-quality commercial protection. This is the natural gradient of a public’s rising protection needs, and the core value of a multi-tier protection system.

5. The Real Test: Social Value Comes Before Commercial Competition

The value of a social mechanism is never judged by “whether it affects an existing business model,” but by whether it addresses a real social pain point, raises society’s overall capacity to withstand risk, and achieves controllable, sustainable development.

Commercial insurance has irreplaceable core value: disciplined contracts, certain payouts, professional operations and capital backing — high-end, stable, well-developed risk protection. Online mutual aid’s unique advantages are equally irreplaceable: a low threshold, low cost and universal participation, building a first, inclusive line of defense for low-income and unprotected groups.

Each has its role and complements the other; they can perfectly well coexist in a healthy way. In the long run, the public risk awareness cultivated by online mutual aid will keep activating demand across the whole protection market, which is good for the long-term development of the commercial insurance industry rather than a shock to it. Defining the two as a zero-sum fight for business is itself a one-sided misconception.

A well-developed social security system never relies on a single protection tool. Public health insurance safeguards the universal baseline, mutual aid broadens inclusive coverage, commercial insurance provides high-end certain protection, and charity supports the most deprived. Only when different institutions clearly define their boundaries and each does its job can a complete risk-protection network be built.

6. Conclusion: Clarifying the Position of Online Mutual Aid

Online mutual aid cannot, and need not, replace commercial insurance. Its core position is to be an indispensable, inclusive link in the multi-tier social security system. Rather than agonizing over “whether online mutual aid has taken commercial insurance’s cheese,” it is better to face its core value squarely: online mutual aid absorbs part of the vast unprotected population, cultivates public risk awareness, and continuously contributes to improving protection for everyone. That is the answer that fits the industry’s reality better and carries greater social value.