With rapidly expanding and increasingly globally mobile populations, Asia is a key target for international health insurers. Marco Giacomelli, CEO of Generali Global Health, explores the considerations for insurers, brokers and advisers across the region.
Asia's population in 2019 is estimated to be in excess of 4.5bn with an annual growth rate close to 1%. Country by country numbers, of course, vary hugely. China is the most populous, with almost 18.5% of the world's population, and almost 1.4bn people; India with 1.3bn residents; Indonesia hosts 255m followed by Bangladesh with 159m, and Japan with 127m. Vietnam, Thailand and Malaysia present strong populations as well, hosting respectively 92m, 69m and 31.6m residents. Closing this scenario, Hong Kong hosts 7.5m residents, and Singapore almost 6m.
Expatriate numbers are significant too. Hong Kong's Immigration Department has seen a 30% increase in foreign worker visas issued over the past five years, while around 23% of Singapore's population comprises non-nationals.
These numbers evidence a substantial market for health insurers, brokers and advisers. But success is only possible with a deep understanding of the market's dynamics.
The role of regulators in the provision of health insurance
Regulators are fundamentally important to the provision of healthcare and health insurance across Asia. Law-makers are able to shape business tactics, although their influence varies significantly from country to country. Regulators' stance in terms of business flexibility and adoption of policies that support a properly governed, yet commercially adaptable environment for businesses can also vary.
"Regulators can have a dramatic influence on insurance markets," said Marco Giacomelli. "The recent announcement of the Voluntary Health Insurance Scheme (VHIS) in Hong Kong is a poignant example."
Hong Kong's VHIS features a semi-mandatory health insurance plan with specific limits and a competitive tariff and to date 11 insurers have joined the initiative. The effect is a shift in the burden of healthcare provision from the public to the private sector, significantly impacting the region's health insurance landscape.
The Asian population mobility factor
An increasingly mobile population across Asia is shifting regional migratory patterns and influencing the availability of resources and skills. This change also affects the inflow of expatriates to the region, especially in markets like Hong Kong, Singapore and China.
Many expatriates also move from Asia to the Middle East, Europe and the Americas, so mobility beyond the region is another important trend that needs to be understood and adapted to.
Related to mobility is medical tourism, prevalent across Asia because patients are attracted to regional centres of healthcare excellence—like Hong Kong and Singapore.
"Regional healthcare and health insurance need to cater for this demand, but it's important to differentiate between travel for high quality treatment and travel for convenient and cheap medical care," said Marco Giacomelli. "The latter needs less expensive, but still dependable, treatment options for customers."
The impact of technology on health insurance
"Technology will hugely impact the healthcare and health insurance sectors in Asia," according to Marco Giacomelli. "The region has the highest smart-phone adoption rate in the world, backed by an abundance of cloud-based infrastructures used for sharing, accessing and storing data."
Start-ups are creating innovative health-related software and hardware solutions, including technology to replace traditional diagnostic techniques. These types of initiatives are creating a technology hub across the region that will shape future healthcare delivery and drive mobility patterns.
Innovation shaping the future healthcare demand
"One of the key success factors in any market, but particularly in Asia, is customer centricity," said Marco Giacomelli. "It's crucial to know your current and future customers, and ensure their needs are met."
To do this, insurers need to understand how trends will shape future demand, which is why the availability of data and algorithms to interpret and understand this data, is fundamental.
Populations are increasing in countries like Indonesia and China, and with demographics across Asia changing so rapidly, client segmentation is key. The evolving nature and size of certain population groups—such as young adults in China—is also helping to change population characteristics.
Social behaviours impacting health trends
Social practices are also shifting. The high incidence of smokers in China, for example, heavily impacts the healthcare provision in the country. But an increase in smoking awareness and cessation campaigns will shift behaviour, leading to a dramatic change in longevity and wellness into later years.
"This sort of social change will significantly alter healthcare provision and health insurance products, and needs to be understood by insurers," according to Marco Giacomelli. "Hybrid products that include an element of health insurance and long-term care are already on offer and we'll see increasing innovation going forward."
From claims payers to health providers
The perception of certain diseases is another important social consideration. The Chinese are especially concerned about cancer; particularly respiratory-related, which can be quite prevalent. This has increased interest in cancer-focused insurance products in the country, especially those that offer treatment for certain types of cancer in overseas centres of excellence.
"Another shift is insurers changing from claims payers to health partners, with wellness and wellbeing services being added to core insurance products with the aim of helping members to manage their own physical and mental health," said Marco Giacomelli.
These services include employee assistance programmes, wellness apps, online doctor services and artificial intelligence supported diagnostics. Technology needs to add genuine value and not just serve as a marketing gimmick, but there's huge potential to support members in this way. Apps that can detect diabetes by scanning retinas are already available and tools that can monitor, and possibly diagnose, certain types of skin cancer - important in Asia with its varied climatic conditions - have been developed.
Product differentiation in a complex market
The Asian market is complex and varied. Traditional International Private Medical Insurance (IPMI) players target globally mobile people coming into and leaving the region. But increasingly, there is a demand for regional PMI from people crossing Asian boundaries whilst remaining within the wider Asia territory. Patients want the ability to access the best healthcare facilities wherever they are in Asia, or to be taken to a nearby centre of excellence if suitable treatment options are unavailable locally.
In China international PMI plans, which provide an element of overseas coverage, are more typically seen as high-end medical plans. Pricing remains important for this type of plan, but service is critical. The more comprehensive the product, the more important service and product flexibility becomes. Pricing takes a back-seat, with clients prepared to pay more to ensure a flawless service throughout their medical treatment.
Medium-term challenges for healthcare insurance
"The challenges over the next few years will come from the absolute necessity to be fully compliant with the regulatory environments in which insurers are operating, and to keep on top of the frequent changes," according to Marco Giacomelli. "Those who operate in any grey areas will eventually be found out as regulation is tightened."
Understanding demographics and how migratory patterns, aging populations and lifestyle trends will change the healthcare landscape will be key for insurers across Asia. Those who design products that cater for specific market groups will be the ones to succeed. Service remains critical and choosing the right technology to embed into solutions will allow insurers to stand out from competitors.