By Clare Baldwin and Diana Chan
HONG KONG (Reuters) - Your child throws a tantrum and smashes something? Take out "naughty child insurance". Similarly, buy cover against your bride becoming pregnant before the honeymoon, your team being knocked out of the soccer World Cup, burning your tongue eating hotpot or if smog ruins your holiday.
Quirky, maybe, but China's insurers are turning to ever more creative ways to drum up business in a market where growth has stalled and penetration rates of around 3 percent, half the global average, are little changed from a decade ago. Premiums in China are less than $278 billion a year, way below the $1.3 trillion paid in the United States and below even the UK's $330 billion, according to Munich Re and Swiss Re data.
"It's consumer acquisition, a way to engage new customers," said Joseph Ngai, who heads the Greater China financial institutions practice at McKinsey in Hong Kong. "It's primarily marketing."
While most of these policies are short-term promotions, they offer insight into daily concerns in the world's most-populous nation - such as marriage and children.
Ping An Insurance Group Co of China Ltd <601318.SS> (2318.HK), the world's second-biggest life insurer by market value, has offered an "Accidental Pregnancy Before Honeymoon" policy to cover the cost of having to unexpectedly cancel a honeymoon. It also offered a payout just to wives in the case of divorce, and another policy, akin to an investment plan, that paid out - after a certain period - if a couple stayed together, local and state media have reported.
Last year, Ping An offered another policy incentivizing couples to marry in the 10 days leading up to this year's Nov. 11 "Singles Day". The policies, which went on sale at midnight and included 12-month membership to an online matchmaking site, sold out in 10 minutes, the official China Daily newspaper reported.
In an emailed response to Reuters for this article, Ping An Property & Casualty said it seeks to "solve or alleviate real life problems." While it still sells "innovative" products, it said it is no longer offering pregnancy, marriage and singles insurance.
Sino-Life Group Ltd <8296.HK>, Sunshine Insurance Group and Anbang Insurance Group also sold married couples "concubine-proof", "red rose" and "rich flower" insurance policies, according to the China Daily and the companies' websites.
For young children, there's now insurance for recalled infant milk formula, and for little ones who get out of hand People's Insurance Group of China Co Ltd (PICC) (1339.HK) offers a policy against "mischievous and destructive" habits. The policy - tagline: "Why not let us pay for the child's fault?" - costs 44 yuan ($7.16) and provides cover up to 100,000 yuan for 12 months.
Chongqing-based Ancheng sells a similar policy in three different versions, with parents of the naughtiest children paying 116 yuan for a 5,000 yuan payout.
Many insurers have latched on to this wave of creative policy marketing, with Ancheng, Ping An and ZhongAn, backed by Ping An and internet giants Alibaba Group Holding Ltd (IPO-BABA.N) and Tencent Holdings Ltd <0700.HK>, among the more aggressive.
WORLD CUP "HEARTBREAK"
During the recent soccer World Cup in Brazil, Ancheng and ZhongAn offered policies allowing Chinese customers to pay for protection against over-drinking, being attacked by hooligans and a "Heartbreak" policy for when their favorite team was eliminated. Uptake wasn't huge, but the policies succeeded in winning plenty of media coverage.
For the industry's regulators, though, some of these policies skirt too close to a Chinese love of gambling. In June, the regulator said it would increase penalties for insurers selling products with "gambling or gaming" properties.
A policy has to offer "meaningful cover" and not just a financial bet, said Guanjun Jiang, a China-based Milliman actuary, adding that a WeChat group with about 100 actuaries and other professionals criticized the World Cup policies as "gimmicks" that didn't adhere to the principles of insurance.
ZhongAn confirmed it sold the World Cup over-drinking and hooligan policies. Ancheng did not respond to requests for comment.
Other attention-grabbing tactics cover Chinese cultural events. Ancheng has a policy covering any medical costs resulting from burns while eating hotpot, a Chinese tradition involving cooking raw meat and vegetables in a boiling pot of soup placed at the center of the table.
Other Ping An and PICC policies - which were quickly shut down by the China Insurance Regulatory Commission - paid out if city smog levels topped a certain level for a specified period, if customers were hospitalized due to smog, or if tourists spent at least two days in a smoggy city.
And foreign insurers, too, have tried their luck.
During last year's Mid-Autumn Festival, Germany's Allianz (ALVG.DE) teamed up with Alibaba's Taobao insurance to guarantee sightings of the full moon, paying out between 50 and 188 yuan - and in some cases a pack of moon cakes - if bad weather obscured the view.
(Editing by Ian Geoghegan)