Waterdrop Releases the 2020-21 ESG Report - Striving to Provide High-quality and Sustainable Protection to Billions of Families
Waterdrop Inc., a leading technology platform dedicated to insurance and healthcare service with a positive social impact, recently released its "2020-21 Environmental, Social and Governance Report" (the "ESG report" or the "report"). This is the first ESG report published since the public offering of Waterdrop.
The report unveils the ESG performance of the Company in the areas of corporate governance, social responsibility, technology and innovation, industry value chain, workplace development, green development, and other topics for 2020-21.
It also illustrates how Waterdrop leverages its sophisticated business model and technological innovation to resolve various social issues, thereby achieving its effective business performance and sustainable prospects, Waterdrop said in a press release.
Mr. Peng Shen, Founder, Chairman, and Chief Executive Officer of Waterdrop commented, "Since our inception, ESG has been embedded in our corporate mission and business philosophy. The 2020-21 ESG report unveils our continuous efforts to enhance our ESG capabilities, including the provision of online medical fundraising services to approximately 2.4 million patients with critical illnesses through our Waterdrop Medical Crowdfunding platform, and providing inclusive insurance to more than 100 million users whom over 70% are from Tier-3 or lower-tier cities. The report also demonstrates that Waterdrop has attached great weightiness to its ESG-related efforts. Along with our strict compliance with relevant laws and regulations, we have developed rigorous management systems in corporate governance, compliance operations, supplier management, employee management, and low carbon development. At the same time, we have set up a dedicated Social Responsibility Department which empowers our business competitive advantages and technological innovation to integrate resources from various partners, thereby driving sustainable social value. Going forward, we will continue to make every endeavor to promote ESG, striving to achieve our mission of 'leveraging internet technologies to make insurance protection more inclusive and accessible to the public, and bringing insurance and healthcare services to billions'."
Business innovation to provide financial relief for medical treatments and prevent patients with critical illness from being impoverished
In early 2021, the State Council published The Opinions of the CPC Central Committee and the State Council on Deepening the Medical Insurance System Reform, proposing that a medical protection system that centers on basic medical insurance, underpinned by medical aid that includes the mutual development of supplemental medical insurance, commercial health insurance, charitable donations, and mutual medical assistance, should be well-established by 2030. Waterdrop leverages its business strengths to provide a solid supplement to China's multi-layer medical protection system, thereby offering innovative financial assistance solutions for the medical treatments of the needy.
Pioneered from the health protection model of "Waterdrop Medical Crowdfunding (fundraising for patients with critical illnesses)" and "Waterdrop Insurance Marketplace (life and health insurance)" platforms, Waterdrop has utilized its innovative technologies to provide financial relief for the medical treatments of its users, in particular for the low-income group, the marginalized, and the minority communities, thereby improving the efficiency of emergency medical relief. As of the end of 2021, 394 million caring individuals offered medical financial relief of exceeding RMB48.4 billion to patients with critical illnesses and financial difficulties. Waterdrop has highly regarded individuals not covered by traditional insurance, including the low-income group, the elderly, and people with pre-existing medical conditions. The Waterdrop Insurance Marketplace has thus launched various low-threshold, cost-effective, and inclusive insurance products to satisfy the protection needs of these vulnerable groups, such as "Waterdrop Carefree Thyroid Insurance", "Waterdrop Elderly Medical Insurance", etc. Currently, out of the over 100 million users on its platform, about three quarters are located in third-tier or lower-tier cities, highlighting the Company's efforts to improve the penetration rate of health and medical insurance in China.
The financial pressure from the patients to receive medical treatment that are not covered by national medical insurance is also a social issue the general public faces. Through "Waterdrop Medicine", the Company has provided comprehensive services including healthcare services and diversified medical payment solutions for patients in need of new drugs for special medical purposes, chronic disease drugs, and rare disease drugs. The results relieved the financial pressure on such patients and enhanced the accessibility and affordability of specific medicine. As of the end of 2021, Waterdrop has assisted over 150,000 patients with critical illnesses saving medical expenses of more than RMB50 million.
It is not sufficient to rely on merely one company or a particular business section to utterly resolve a social issue. Henceforth, Waterdrop has integrated various parties to explore more supplementary channels to address the supply of medical relief funds beyond the national medical insurance. The Company is engaged in the establishment of a multi-layer medical protection system and served as a "supplementary layer" through its Waterdrop Medical Crowdfunding, Waterdrop Charity, and other businesses. In March 2021, Jinyun County Healthcare Security Administration of Zhejiang and Waterdrop launched a project named "Jin Qing Bang" to establish a multi-layer medical insurance and poverty prevention system. 5 months after the launch of "Jin Qing Bang", the platform has helped reduce the out-of-pocket medical expenses of the needy by more than RMB14 million, equivalent to a per capita reduction of over RMB5,000, or a year-over-year decline in such expenses of about 12%. Waterdrop expects the number of people in poverty caused by diseases to reduce by 77% annually. Waterdrop also contributes the export of its technological capabilities for product design, platform construction, marketing and promotion, pharmacy benefit management, and other patient services to empower Hui Min Bao projects for more than 10 cities in mainland China. More than 12 million people have benefited from the low-threshold and high-protection of Hui Min Bao products launched in various cities.
Technological innovations empower the improvement in operational efficiency and promote the development of the healthcare industry
Since its inception, Waterdrop has been consistently investing in R&D to leverage technology to empower its businesses, improve its operational efficiency, and support its service upgrades. In 2021, its R&D expenses increased by 55.2% year-over-year to RMB 379 million, accounting for 11.82% of total revenues. The increase was mainly attributable to the expansion of its R&D team and the strengthening of its technological competitiveness.
Given its in-depth insights into the healthcare industry, Waterdrop unveiled the "ABDC" strategy (AI + Blockchain + Data = Construction), in 2020. Focusing on the application of technologies such as AI and big data analysis in its businesses, Waterdrop has developed its proprietary intelligent systems and tools, including the claims settlement system, "intelligent calculation" system, risk management system, system related to storage media and computing equipment technology, AI-powered matching system, the CONF medical knowledge map, and the intelligent chatbot system, which has improved its operational efficiency and user experience significantly. The Company also took a major step forward by applying for national patents for its inventions and technological innovations.
Meanwhile, the Company has launched Waterdrop Open Platform 2.0, enhancing its capabilities to empower the digitalization, process management, data analytics, and smart operations of the insurance industry.
For marketing insurance products, the AI-powered matching system can match each user with the most appropriate insurance consultants. This applies to users who speak Cantonese, Sichuan Putonghua, or other dialects, thereby improving the APL efficiency of insurance consultants significantly. For insurance claims, Waterdrop's intelligent claims system is capable of settling a claim in 8 seconds. This has helped save the consumption of 2.61 million paper documents, and the users' waiting time for claims settlement. The insured people do not need to repeatedly mail paper documents, and do not have to worry about the long hours and complexity of claims settlement. The big data analysis and the CONF medical knowledge map can help generate more accurate estimates of the funds needed for the medical treatment of fundraisers in the Waterdrop Medical Crowdfunding platform, based on information about their illness categories, treatment methods, and the hospitals they attend.
Leveraging technology to effectively drive charitable social value
In 2018, Waterdrop launched an online fundraising platform called "Waterdrop Charity", which was later designated by the Ministry of Civil Affairs as one of the online fundraising platforms for charity organizations. Waterdrop Charity has leveraged technology to improve the efficiency of fundraising and fund utilization, providing all-around support for charity organizations. From 2020 to 2021, Waterdrop Charity launched a total of 9,451 projects which cover a wide range of areas including anti-pandemic action, emergency and disaster relief, and rural revitalization, raising a total of RMB833,776,562 from 47,258,209 donators.
During the initial outbreak of the pandemic in 2020, Waterdrop Charity collaborated with over 20 charity organizations and raised more than RMB65 million for the purchase of medical masks, protection gear, and other anti-pandemic supplies. At the same time, Waterdrop Charity joined hands with the China Social Welfare Foundation to launch the "Emergency Response Workers Protection Program", providing financial relief to frontline medical staff who were infected with or died from Covid-19. Up till now, the program has granted a total of RMB400,000 to four medical workers who contracted the virus, and RMB1 million to the families of two police officers who died on duty, honoring their contribution to the anti-pandemic efforts.
In face of catastrophes, Waterdrop Charity has promptly organized charity projects to integrate the efforts of various parties to distribute relief supplies so that the disaster victims could return to normal life quickly. The Henan Rainstorm Disaster Relief program that Waterdrop Charity launched in 2021 has raised approximately RMB 16.8 million in donations, assisting the transfer and resettlement of more than 209,000 victims. Waterdrop Charity also launched the "Baby Whale Project" to alleviate the financial burden of families whose children suffer from critical illnesses. The project has helped raise more than RMB150 million for the medical expenses of these children from nearly 4.84 million donators, benefiting 1,795 families. Moreover, Waterdrop has initiated the Waterdrop Charity Home program to offer temporary accommodation for patients with critical illnesses and their families during their medical treatment. To date, more than 30 charitable homes have been built in 7 cities across China.
It remains a key focus of Waterdrop to contribute to China's poverty alleviation and rural revitalization efforts. As a key program to support rural revitalization, the Waterdrop Rural Clinic has built 64 clinics across China, benefiting over 150,000 people in rural areas. Waterdrop is planning to establish 1,000 clinics in 100 counties across the country by 2030, making a greater contribution to rural revitalization and a better China.
Implementing our mission to "put people first and build a better society"
Waterdrop is a company driven by its mission and values. It pursues employee equality and diversity, regarding its employees as partners working for a common cause. Based on this belief, Waterdrop has built an equitable and inclusive workplace with strong growth potential.
Waterdrop promises not to discriminate against employees in recruitment, compensation, training, promotion, and retirement due to differences in gender, race, disability, social class, political affiliation, or any other factors. In 2021, Waterdrop recruited employees from more than 20 ethnic groups, with the proportion of female employees and female managers reaching 46.8% and 28.99%, respectively. Waterdrop also offered customized comprehensive female medical check-up packages, nursing rooms, and breastfeeding leave to its female employees.
For talent training, Waterdrop provides customized training programs for employees in different positions. A comprehensive training system and a variety of training activities are introduced to facilitate all-around growth of every staff, from a new hire to a backbone team member and a leader. In 2021, Waterdrop invested RMB1.69million in employee training, attaining 9,683 participations or an average of 3.3 training sessions for each employee, and achieving a 100% training coverage rate. Meanwhile, Waterdrop has established a clear talent development path and a flexible internal job transfer system for employees' continued exploration and growth in the suitable positions.