Now Health International may only be five years old, but the Hong Kong-based medical insurer has grown as lustily during that time as one of its own patient’s newborns.
Since 2011, it’s already completed one major acquisition; has taken the stabilisers off its business model, by moving away from its original reinsurers; and grown from a handful of employees and no clients, to 380 staff and more than 115,000 customers.
Its annual turnover is approaching US$300m, and it is luring corporate clients away from long-established multi-national players many times its size.
All this is down to the vision of one person, Martin Garcia, originally from France.
Garcia, pictured, got his start in the world of international private medical insurance (IPMI) while working as global managing director for Goodhealth Worldwide which, when it was sold to Aetna in 2007, had 55,000 members.
After a few years travelling and considering his options, Garcia returned to the industry in January 2011, with Now Health International, which had been two years in the planning.
Building on his Goodhealth experience, Garcia turned to the Primary Group, a Bermuda-based private equity firm which specialises in backing insurance, digital and speciality financial services companies, and which had helped Goodhealth to become established enough to capture the eye –and later the acquisition dollars – of Aetna, one of the largest US private medical insurers.
Primary Group agreed to back Garcia, and its investment in Now Health International totals more than US$30m. (Goodhealth Worldwide was also domiciled in Bermuda, as indeed is Now Health.)
In 2015, Primary backed Now Health’s acquisition of yet another Bermuda-domiciled insurer, Best Doctors Insurance, which at a stroke expanded Now Health’s operations into the Americas. (At this point it already had offices in the UK, Dubai, Singapore, Shanghai and Beijing, in addition to its Hong Kong headquarters).
As for why Now Health’s headquarters today are in Hong Kong, it has long been Garcia’s base, dating back to the 1980s, when he was an intern there, before he returned to France to embark on a career in health insurance. This was also before the former British colony’s scheduled handover to China, which took place in 1997.
After a time learning the insurance industry ropes in France, Garcia returned to Hong Kong – this time with the insurance industry – in the 1990s, since which time, he says, it has evolved into the fertile hunting ground it is today for the kind of well-educated, hard-working staff a new business needs.
But the main reason Garcia opted for Hong Kong was even simpler: it was to make Now Health stand out from its mainly European and American rivals.
Hong Kong ‘at the heart’
Alison Massey, Now Health International’s marketing and e-commerce director, pictured below, elaborates, explaining that being in Hong Kong put the company right “at the heart of the growth of the biggest emerging markets for international private medical insurance in Asia”.
“We felt that if we were to be successful in this region, we needed to be located on the ground [here],” she explains.
Today, with 10 major offices around the world looking after clients on four continents today, the significance of being in Hong Kong, as opposed to London or New York, may not be quite as great, as Now Health begins to have the kind of market reach of some of its much larger rivals – particularly since the Best Doctors Insurance acquisition last year propelled it straight into markets into Latin America, the Caribbean and Canada.
Best Doctors Inc
At the time of that acquisition, Best Doctors Insurance had been offering major medical insurance plans to high-net-worth individuals and expats across these regions for more than 25 years. The insurance company was owned by the Boston-based Best Doctors Inc, which continues to provide its core service – second medical opinion services – and that’s probably how it is still best known to UK financial advisers.
Massey says Now Health and Best Doctors Insurance are still being integrated, a process that isn’t being rushed, “in order to preserve the value within both businesses”.
Eventually the Best Doctors Insurance branding will disappear completely, absorbed into the Now Health International brand.
GARCIA: ‘HEALTH INSURANCE MAY BE RECESSION-PROOF’
China – and, by association and proximity, its Special Administrative Region (and traditional doorway to the outside world), Hong Kong – have been going through a turbulent year or so, as an economic slowdown has settled like a bad lurgy over the mainland, and forced Hong Kong businesses to reach for their handkerchiefs as well.
But as Martin Garcia told Hong Kong’s South China Morning Post recently, the private health insurances industry is traditionally one of the last to feel the pain in such situations.
“The mainland Chinese economy may be in a slowdown but it still has a 6.5% annual growth which is faster than many Western markets,” Garcia said.
“Many second- or third-tier cities have strong growth of demand for high-quality medical and private hospital services. The growth opportunities are huge.”
“This is why we have local offices in many markets to hire a team of people who know the local language and cultural background to serve the clients.”
To read the article in full, go to www.scmp.com.
The transition over to RGA from Now Health’s existing reinsurers should be completed within the next 12 to 18 months, according to Massey, who says RGA would enable Now Health have “much greater flexibility and faster response times”, benefitting both its distributors and clients.
Expats and locals
Looking ahead, Garcia, like most if not all multi-national private medical insurance companies these days, is focusing on not just on the expat IPMI market, but that of the high-net-worth local private medical insurance market, in some of the famously under-insured developing markets in which the company already has a presence.
Currently the company’s business is split 80:20 in favour of individual policies vrs group schemes, across more than 200 countries and territories, according to Massey.
“The business started with the expat market, but we now have the ability to cater for local nationals in many of our markets,” she says.
Even in 2011, when he was launching Now Health, Garcia vowed that he would go after the “global, affluent mobile population” rather than just classic expatriates, because “the demographics become so much bigger”.
“A global health insurance solution with local service” is how Massey defines Now Health’s philosophy.
This, she adds, means “that you can buy our WorldCare [insurance product range] in any market, but still be able to talk to someone in your region who understands how the local healthcare infrastructure works”.