Bupa Delivers good news on Global Medical inflation and new product
By Holly Booth | Published October 31, 2012
Globalsurance can confirm that Bupa International’s medical inflation rate has come in below long term average which is good news for clients. Global medical inflation in the international Private Medical insurance (iPMI) market has been running at 10.8 percent on average for the past 5 years so although Bupa’s increase looks high by most inflation measures, it is actually typical within the iPMI sector.
Bupa International is unique as an insurer in that it has a bi-annual premium rate increase for individual international private health insurance policies and it changes its premiums twice per year – on the 1st of April and the 1st October. Earlier this year, Bupa adjusted its premiums by 6 percent and then by 4.3 percent this October meaning an effective rate of yearly medical inflation of 10.3 percent.
These changes relate to all of the company’s Worldwide Health Options (WHO) and Lifeline health insurance products.
As Globalsurance revealed in our Annual International Insurance Review, published on August 15th 2012, Bupa Worldwide Health Options products have had an average 10.3 percent per year increase since 2010. As such, the 10.3% increase this year is in line with the results from the past 2 years.
Bupa International’s Sales Director, Tim Slee commented on the increase that “Medical Inflation continues at pace and sustainable pricing is essential for any long term view of this exciting market”.
Globalsurance has closely studied Bupa’s long term philosophy with respect to premium management, and it is clear that sustainability is at the heart of Bupa’s approach. Bupa’s foundation of being a ‘Provident Association’ rather than a shareholder owned company is most likely the reason behind this long term approach.
Bupa are in fact the oldest major insurer in the iPMI market and over the past 30 years they have definitely been a key player in the global market. Mr Slee commented further on the premium adjustment: “At Bupa International we work hard to ensure we deliver the highest quality of care available at the appropriate cost and in doing so look to have sustainable long term relationships with our members, distributors and Providers”
The premium increase of 10.3 percent is common for most age bands and plans across the entire Bupa International plan range but there are a few notable exceptions. For example, the age bands regarding those around 20 years and 60 years of age displayed an almost doubled increase. Bupa explained that these age bands were historically under priced and that this was a one off adjustment to ensure more measured premium increases in the future.
Bupa premiums are zoned geographically (into 9 zones) and historically, the increases levied on the premiums for both the Bupa WHO and Lifeline products have been consistent throughout the world – with the bulk of premium zones tending to increase in line with every other zone. This October’s review reflected no changes to this with all zones going up on average by 10.3 percent with the exception of zone 9 (Egypt) which only went up by 4.3 percent.
Bupa’s 10.3 percent increase, which was below the global average for insurers for the past 5 years, is sure to be welcomed by all Bupa WHO and Lifeline customers. Further to this, Bupa is also making a concerted effort to continue expanding their global stamp by launching its new Premier Plan in China.
Designed as an onshore product, the Premier Plan has been developed to provide superior levels of health insurance protection to Chinese nationals residing in the People’s Republic of China. This plan provides the ability to pay premiums and be reimbursed claims in RMB, as well as enabling the production of all policy documentation and a local assistance call centre, in Mandarin Chinese.
Bupa’s Premier Worldwide Health Options (PWHO) plan is the result of a partnership the company formed with AllTrust Insurance Company, a leading China-based insurance provider and has been available for purchase in China since October 1st 2012.
The Premier Worldwide Health Options product is a timely release in light of the fact that high-end, comprehensive health insurance policies are currently in great demand from Chinese consumers, with certain benefits tailored to meet the demands of the local market. Furthermore, the PWHO plan is unusual in that pre-existing conditions can be considered for inclusion under the policy’s modular coverage. This enables policyholders to customize their coverage to suit their individual requirements whilst being able to access the possibility that their otherwise excluded pre-existing medical condition may now be covered under the plan.
Globalsurance Managing Director, David Hayes, stated that “these changes present real value for our customers, and we are extremely pleased to be working with BUPA to continue to provide consumers worldwide with innovative and high-quality insurance products”
As China continues to grow, especially in regards to the insurance and medical industries, more flexible policy options will need to hit the market. In this respect, Bupa can be confident of increased consumer sentiment by taking a proactive approach to providing one of the first comprehensive, yet flexible, product options within the PRC.