Aetna International, the international arm of Hartford, Connecticut-based health insurance provider Aetna, said it has acquired a relatively small Hong Kong insurer known as the Canadian Insurance Co Ltd, and as a result, has expanded its ability to offer licensed health insurance products under the Aetna branding in Hong Kong.
Aetna already had a presence in Hong Kong, dating back to its 2007 acquisition of Goodhealth, another Hong Kong insurer.
The market is said to be one of the most developed insurance markets in Asia, which is reflected in the fact that its per capita insurance premiums are among the highest in the region.
Derek Goldberg, managing director of Asia Pacific for Aetna International, said the acquisition of the Canadian Insurance Co, and consequent expansion in the Hong Kong market, is “very much in line with our global strategy to go ‘broader and deeper’ into local health care markets – bringing high quality and affordable healthcare to more people in Asia”.
The new licence that the acquisition has afforded Aetna International, he added, “offers new opportunities for us to develop an enhanced proposition for the Hong Kong market”.
Aetna noted that a number of factors are currently seen as giving a particularly bullish prospect to Hong Kong’s insurance industry, including the special administrative region’s famously affluent population; its close ties to mainland China, for which it remains the gateway through which much commerce and industry continues to pass; and the imminent introduction of a so-called Voluntary Health Insurance Scheme, which, it says, is expected to lead to the creation of new segments of insurance customers, “presenting an opportunity for product innovation”.
The Voluntary Health Insurance Scheme, or VHIS, is a new policy initiative being implemented by the Hong Kong Food and Health Bureau to encourage more people to buy health insurance, by boosting its attractiveness and value for money, in order to “relieve the pressure on the public healthcare system in the long run”, according to an explanation on the website of the HK Food and Health Bureau.
According to the South China Morning Post, Hong Kong’s public sector healthcare industry has been “pushed to a breaking point as it employs only about 40% of the city’s doctors, while caring for 90% of inpatients”.
The sector is also “constantly losing practitioners to the more lucrative private market,” the SCMP noted, in a story last December about the VHIS.
Aetna International has been one of a number of multi-national, publicly-traded health insurers that have been expanding their international footprints in recent years, in response to demographic and economic trends that have driven the international healthcare industry, particularly in developing, emerging market and frontier countries.
In Asia, in addition to its Hong Kong office, it has what a company spokesperson called a “fully functioning” office in Shanghai as well as a representative office in Beijing. All local policies in China are sold through its local partners in that market, Chinalife and Huatai, the spokesperson said.
As reported here in December, Aetna International’s parent, Hartford, Connecticut-based Aetna Inc, is in the process of being acquired by US-based CVS drugstore chain, in a $69bn cash and stock deal. Just yesterday the deal has received the approval of both companies’ shareholders (98% of those holding CVS shares and 97% of those with Aetna stock).
The deal is seen as providing benefits to both entities in a way that would, it is hoped, substantially lower costs.
CVS is not as international – at least yet – as some other US retailers, but does have a number of retail units in Brazil and Puerto Rico, according to its website.