Urban renewal and safety in aging residential communities have become imperative tasks in city governance. According to the Ministry of Housing and Urban-Rural Development, approximately 220,000 residential complexes built before the end of 2000 exist nationwide, involving nearly 39 million households. These older neighborhoods, constructed in the 20th century, commonly face issues such as deteriorating facilities, insufficient amenities, and inadequate management. The ministry has stated that all such communities must be included in urban renewal plans.
Historically, these aging complexes have largely lacked self-maintenance funds, relying mainly on local government financial allocations for upkeep. As the number of such communities grows and buildings age further, maintenance demands are expected to rise sharply, posing significant pressure on public finances if relied upon exclusively.
As Shenzhen's earliest developed district, Luohu District contains nearly one-quarter of the city's aging residential complexes. In response, Luohu has adopted an innovative strategy—dubbed "Fee-to-Insurance."
Huangbei Subdistrict, located within Luohu, is one of the oldest areas in Shenzhen's oldest urban zone. Covering 7.5 square kilometers, it has a resident population of approximately 193,000, with high population density—Huangbeiling Village alone houses over 50,000 people. The subdistrict contains nearly 2,700 aging buildings, 70% of which are over 30 years old. Due to construction limitations in earlier years, many older buildings were built using sea sand, raising durability concerns. Around 500 food and beverage establishments in the area use gas for operations.
According to Gu Peng, Party Secretary of the Huangbei Subdistrict Committee, gas hoses and equipment in these establishments are often aged, and with staff working long hours, safety risks can easily be overlooked. An accident could lead to significant losses for business owners and affect surrounding residents. Thus, gas safety oversight has long been a challenging issue.
In recent years, while coordination with other departments has strengthened safety inspections, regulatory measures alone have proven insufficient to curb risks. To address this, the subdistrict conducted in-depth research and decided to adopt the "Fee-to-Insurance" model, leveraging the expertise of insurance companies and technical teams to explore new grassroots governance pathways.
The "Fee-to-Insurance" approach involves shifting from traditional government subsidies to direct insurance coverage or premium subsidies—an innovative mechanism being piloted in Luohu and other areas for managing aging neighborhoods. However, transitioning from fiscal budgets to insurance premiums has been challenging. Insurers prioritize premium income, while the government seeks to maximize protection under limited budgets.
After multiple rounds of negotiation focusing on models, benefits, and long-term vision, these obstacles were gradually overcome. Since 2024, the "Fee-to-Insurance" model has been fully implemented across Luohu.
In Huangbei Subdistrict, a three-pillar framework was established: First, insurance companies formed professional inspection teams to conduct comprehensive gas safety checks at all food and beverage establishments. Second, a special fund was set up to address urgent safety hazards when business owners cannot afford immediate repairs. Third, a fast-track claims process was created to safeguard lives and property.
Gu Peng noted that insurers, motivated to reduce payouts, actively oversee safety inspections and assume liability when incidents occur. Technical agencies also educate business owners and remind government bodies to fulfill regulatory duties, creating a positive governance cycle.
Through public bidding, Ping An Property & Casualty Insurance was selected as the implementation partner for the gas safety project in Huangbei. Within four months of operation, the project has already inspected 500 gas-using establishments and addressed nearly 100 safety hazards. Additionally, 757 aging buildings have been insured under the model, with a total coverage exceeding 10 million yuan.
Huangbei is not alone in adopting this approach. Seven subdistricts and two other units in Luohu have been recognized as "Most Exemplary Units" in insurance innovation for 2025.
The efficiency of public fund usage has improved significantly. Previously, fiscal allocations only covered emergency inspections during disasters like floods or fires. Now, under "Fee-to-Insurance," a comprehensive system of inspection, risk prevention, and loss coverage has been established.
Several property insurers have elaborated on their understanding of the model. Chen Yuxiang, General Manager of Dian & He P&C Insurance Shenzhen Branch, stated that the company will integrate energy digitalization and risk cloud technology into Luohu’s safety governance system, shifting focus from post-incident compensation to preemptive risk management.
Gong Yajie, Assistant General Manager of Guoren Insurance Shenzhen Branch, emphasized that "Fee-to-Insurance" transforms vague expenditures into clear responsibilities and measurable outcomes, turning the government from a payer into a supervisor.
Some insurers are exploring broader applications. Jia Ning, Deputy General Manager of PICC P&C Shenzhen Branch, mentioned developing insurance products for AI-generated content intellectual property and algorithm liability, fostering closer collaboration with the district government, AI firms, and research institutions.
The "Fee-to-Insurance" model has now entered its 2.0 phase. Huangbei’s experience demonstrates its replicability, based on four principles: maintaining stability, establishing quantifiable mechanisms, strengthening closed-loop responsibility management, and ensuring reliable safeguards.
To date, the subdistrict has recorded zero gas-related accidents in the food and beverage sector. In October 2024, Luohu released "18 Insurance Measures" to support industry development, centered on expanding the "Fee-to-Insurance" model to provide risk coverage across various social governance areas.
In July 2025, Shenzhen’s first batch housing safety insurance product was launched, covering 990 older buildings in Huangbei and Donghu subdistricts. The policy includes compensation for building collapse, casualties, and damage from falling objects.
On March 31, 2026, Luohu officially launched the "2.0 Version of the Deepening Insurance Innovation and Reform Work Plan," marking the official upgrade of "Fee-to-Insurance." Seven P&C insurers established a grassroots safety governance consortium to address issues in workplace safety, emergency response, and public facility maintenance.
Looking ahead, Gu Peng outlined plans to expand the model in three dimensions: deepening existing projects with technologies like remote monitoring, broadening applications to areas such as slope safety, and scaling successful practices from subdistricts to the entire district and city.
The "Fee-to-Insurance" model addresses weaknesses in traditional inspection services by converting fees into premiums, mobilizing insurers and technical teams, and establishing a governance loop of preemptive prevention, intervention, and follow-up. This has significantly improved grassroots governance efficiency, clarified accountability, and enhanced public welfare safeguards.
According to Deng Minyi, Director of Luohu District Financial Services Bureau, the core goals of the 2.0 plan include clustering insurtech firms, unlocking new application scenarios, driving hundreds of millions in premium growth, forming industry consortiums, setting new benchmarks, and establishing service evaluation systems.
Deputy Director Chen Jianeng added that Luohu plans to develop标杆 projects in public services, commercial aerospace, low-altitude economy, and social governance, including forming a consortium for the commercial aerospace sector.
Over two years, from its initial rollout to the 2.0 upgrade, Luohu’s insurance reform has aimed clearly at establishing itself as the "core engine of insurance innovation in the Greater Bay Area."
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