InsurTech Expansion and Insurance Market Growth: A Transmission Dynamic Model Analysis of Online Mutual Aid in China

Online mutual aid platforms in China expanded rapidly as a low-cost form of insurance-like protection, but many leading platforms later suspended their services under stricter regulation. This article studies whether online mutual aid competes with or complements traditional private health insurance. We develop a transmission dynamic model with online socialization heterogeneity. The analysis shows that mutual aid participation can persist when its information transmission effect exceeds a threshold. Mutual aid may either promote or inhibit transitions to the private-insurance-only-group, depending on whether mutual aid participants are more likely than basic-coverage-only-individuals to purchase private insurance. Numerical simulations using Chinese mutual aid membership data suggest that, under empirically motivated parameters, mutual aid can support private-insurance-market growth. These findings provide new insights into InsurTech expansion and the regulation of digital-risk-sharing platforms.