Dec
22
The Insurance Industry: Mergers and Acquisitions 2010
Filed Under AIG, Aviva, BUPA, China, Health Insurance, International Healthcare, Life Insurance, United Kingdom | 5 Comments
A number of Mergers and Acquisitions (M&As) between insurance companies have been implemented during 2010 in a bid to strengthen business activities in both mature and emerging markets. These developments have taken place as insurers strive to capture an increase in profitable markets and penetrate new markets to capitalize on shifting global demands.
The M&As implemented are planned to facilitate improvements in the quality and range of services which can be provided to clients, together with uplifting profit margins and share values for companies as rationalization processes are implemented.
An appetite for mergers and acquisitions within the global insurance industry has been re-activated in the last 18 months. These activities have occurred in the wake of the global financial crisis – which started in 2007/2008; the financial crisis originating in the USA with a knock-on impact worldwide.
With the economies in the western hemisphere still feeling the effect of financial instability into late 2010, growth has been focused on Asia, Latin American and the Middle East as these regions have emerged more quickly out of recession than the established markets in North America and Western Europe. Asia – particularly China and India – has become pivotal for the insurance industry offsetting lacklustre returns from established markets.
While the USA and Western European countries are suffering from the impact of austerity measures, the major reforms of state provided healthcare services proposed in these major nations could be beneficial for private sector insurers. There is an expectation that populations may switch to private insurance in bigger numbers as standards and waiting times worsen in public sector provision. The out-sourcing of state funded medical treatments and procedures to private facilities with spare capacity may also be adopted as a more cost effective process in countries such as the United Kingdom.
Additionally opportunities for private insurers in western hemisphere countries could emerge from an attempt to rectify a estimated shortfall amounting to trillions of dollars in the pension and savings sectors in these nations; this deficit has been building up over many years and will need to be satisfied.
In the emerging markets of Asia and Latin America, the increasing wealth of the large populations has resulted in a demand for a broad range of insurance products. Insurance companies are poised to penetrate the market for micro-insurance, which is estimated to be worth some US$ 40 billion (£26 billion:€30 billion) of new premium business. A report issued by Swiss Reinsurance in December 2010 highlighted the potential demand for microinsurance primarily for low income populations in Asia, Latin America and Africa countries; the fledgling market being assessed at 4 billion policies covering a diverse range of products – 2.6 billion for people living on US$1.25 to US$4 a day plus the capability of a further 1.4 billion policies with the help of financial support from governments and international aid agencies.
Another niche market ready for expansion covers the development of takaful insurance primarily to populations in Islamic countries. This is based on the issue of mutually beneficial protection policies distinctly geared to markets in Middle Eastern and Asian countries.
Recent mergers and acquisitions in the insurance industry indicate that the combination of multi-national and local insurers is well placed to take advantage of these opportunities:
* Resolution Ltd is set to acquire Bupa’s Health Assurance business in a US$164 million (£102 million:€ 122 million) deal. As part of Resolution Ltd’s strategy to build a substantial share of the UK life insurance market, the company has reached an agreement with Bupa to acquire its life, income and critical illness insurance business. This enhances the previous acquisitions by the Clive Cowdrey formed company – Resolution Ltd – and follows the purchase of Friends Provident in 2009 for US$3.04 billion (£1.9 billion:€ 2.28 billion), and the US$4.4 billion (£2.75 billion:€ 3.3 billion) acquisition of AXA’s UK life assurance and savings arm earlier this year.
* UK based multinational insurance company Aviva plc has recently entered into an agreement with PT Asuransi Wahana Tata to purchase a 60% share of PT Asuransi Winterthur Life Indonesia (WLI). This is the first time Aviva has entered the Indonesian insurance market. Once the deal is finalized and Indonesian regulatory approval is given for the venture, Winterthur Life will be renamed PT Asuransi Aviva Indonesia. Aviva also operates in China, Hong Kong, India, Korea, Sri Lanka, Singapore, Taiwan, Malaysia and Australia.PT Asuransi Winterthur Life Indonesia is one of Indonesia’s top three health insurance providers and holds gross assets of approximately US$22.7 million (£14.5 million:€17.2 million), managing pension funds valued at US$63 million (£40 million:€48 million).
* The second largest insurer in China, the Ping An Insurance Group Company (PAIGC) has joined with equity investment firm Newbridge Asia exchanging shares held by PAIGC with those held by Newbridge in the Shenzhen Development Bank.
* The inauguration of MaxBupa in February 2010 covered the joint venture between local Indian insurer Max India and global insurer and major healthcare provider Bupa, with an initial network of offices in six major metropolitan areas – Delhi, Mumbai, Bangalore, Hyderabad, Pune and Chennai.
* China Everbright formed a joint venture with Canadian owned Sun Life in 2002 resulting in a new company – Sun Life Everbright. The partnership generated 18 offices within China. A restructuring of Sun Life Everbright was approved in 2010 enabling additional investors to buy shares in the joint venture, which will ultimately turn the company into a wholly owned Chinese entity, although Canadian based Sun Life will continue to provide management and actuarial services.
* BNP Paribas entered into a joint venture with the Taiwan Cooperative Bank in April 2010 – split 49%, 51% respectively – in order to sell a diverse selection of life insurance products. The joint venture, named BNP Paribas Assurance TCB Life Insurance Co, uses the bank’s 300 outlets to distribute policies to clients in the difficult Taiwanese insurance market.
* In Malayasia, the Singapore listed company Great Eastern Holdings has acquired the Tahan Insurance Company in a transaction amounting to US$ 4.7 million (£3.3 million: €3.5 million); the takeover being completed by Great Eastern Holdings wholly owned Malaysia insurance company, Overseas Assurance Corporation Malaysia (OACM).
* The Danish Investment Bank FIH Erhvervsbank (FIH) has been taken-over by a consortium involving Danish based pension company ATP, PFA Pension, CPDyvig and Swedish insurer Folksam; the deal worth US$879 million (£567 million: €670 million) relieving FIH of liabilities incurred by its previous takeover of failed Icelandic bank Kaupthing.
* London based insurance company, Brit Insurance, is recommending acceptance of an offer by private equity groups Apollo Global Management and CVC Capital Partners Ltd, which would conclude an acquisition proposal under discussion since June this year. Brit Insurance – which specializes in the major insurance and reinsurance business – has decided to recommend to its shareholders acceptance of an approach by Apollo Management and CVC Capital Partners. The bid is valued at US$1.3 billion (£850 million:€900 million), with the potential for a further 2.3% increase in value if certain targets are achieved.
*.Prudential Financial Incorporated, one of American’s largest life insurers, raised US$2 billion (£1.3 billion:€1.45 billion.) through the sale of over 18.3 million shares of Prudential Financial common stock, together with public offering of senior notes to help fund the purchase of AIG Star Life Insurance Co and AIG Edison Life Insurance Co from its American rival AIG. The acquisition of the two Japan-based insurers increased Prudential Financial reach across the world’s third largest economy.
* The German based major insurer Allianz took control of Allianz Seguros its Brazilian subsidiary in January 2010, when it purchased the remaining 14 percent of the company from Ita’u Unibanco. The acquisition will provide Allianz with access to gross written premiums of approximately US$905 million ((£584 million:€689 million) per year primarily in the Brazilian property and casualty insurance markets.
*The private equity fund manager Horizon Capital has agreed the purchase of Fortis Life Insurance Ukraine, with Belgian based Ageas Insurance International. The transaction fits with Ageas continuing their portfolio restructuring and follows the sale of their Turkish life & pensions business to the insurance unit of France’s BNP Paribas in June 2010.
*The Industrial and Commercial Bank of China (ICBC) has agreed to buy a major stake in the French-Chinese joint venture AXA-Minmetals Assurance Company. The move by the Chinese Bank ICBC will make them the majority shareholder and add to its non-banking revenue stream. The initiative by ICBC to acquire the 60 percent share in AXA-Minmetals Assurance comes as the Chinese bank announced that it gained a 27 percent increase in profits during the third-quarter of 2010 with net income of US$ 6.4 billion (£4.1 billion:€4.8 billion) up from US$ 5.05 billion (£5.9 billion:€3.8 billion) in the previous year.
*Zurich Insurance Co. Ltd., a subsidiary of Zurich Financial Services AG, the Swiss insurer, announced the acquisition of Compagnie Libanaise D’Assurances (CLA), a privately-owned Lebanese insurance company founded in 1951, with branches in the United Arab Emirates, Kuwait and Oman. The Zurich Financial Services Group also announced that it has entered into an agreement with its Spanish partners Unnim to sell them its 50 percent stake in their Spanish joint venture life and general insurance operation. Zurich’s decision to sell its equal stake in the Spanish insurance venture follows the merger between Caixa Sabadell, Caixa Terrassa and Caixa Manlieu in July 2010 to form Caixa d’Estalvis Unió de Caixes de Manlleu, Sabadell i Terrassa – also known as Unnim.
The financial industry is predicting a growth in business mergers and acquisitions during 2011 as companies emerge from the 2007 – 2008 global financial tsunami, with cash reserves available for new transactions. The insurance industry is expected to continue to be involved in these initiatives.
Companies Mentioned:
Aviva
Europe’s fourth largest insurance company, with more than 300 years of experience in the global insurance industry, Aviva is committed to the safety and satisfaction of its customers. They sell a broad range of insurance products including motor and property insurance, protection and health insurance, business insurance, life insurance and pensions.
Bupa
Bupa was established more than 60 years ago in the UK and is now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.
Prudential Financial Inc
Prudential Financial Inc. is a financial services leader, with approximately US$750 billion of assets under management as at September 2010. Prudential Financial operates in the United States, Europe, Latin American and Asia, with approximately 42,000 employees worldwide
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
Zurich
Headquartered in Zurich, Switzerland, Zurich Financial Services Group is an insurance-based financial services provider with a network of subsidiaries andoffices in North America and Europe and also in Asia-Pacific, Latin America and other markets. Zurich is one of the world’s largest insurance groups, and one of the few to operate on a truly global basis. With 60,000 employees serving customers in more than 170 countries, our business is concentrated in three business segments: General Insurance, Global Life, and Farmers.
ICBC
By the end of 2008, ICBC had altogether 385,609 employees and 16,386 domestic and overseas branches, providing extensive and high-quality financial products and services to 190 million personal clients and 3.1 million corporate clients.
Ageas
Ageas is an international insurance company with a heritage spanning more than 180 years. Ranked among the top 20 insurance companies in Europe, Ageas has chosen to concentrate its business activities in Europe and Asia, which together make up the largest share of the global insurance market. They are grouped around four segments: Belgium, United Kingdom, Continental Europe and Asia. It is an undisputed leader in the Belgian market for individual life and employee benefits, as well as a leading non-life player, through AG Insurance. Internationally Ageas has a strong presence in the UK, where it is the third largest player in private car insurance. The company also has subsidiaries in France, Germany, Turkey, Ukraine and Hong Kong. Ageas has a track record in developing partnerships with strong financial institutions and key distributors in different markets around the world and successfully operates partnerships in Luxembourg, Italy, Portugal, China, Malaysia, India and Thailand.
Swiss Re
Swiss Reinsurance Company Ltd was established in 1863 and is present in more than 20 countries. Swiss Re provides reinsurance products and financial service solutions. It offers various reinsurance products covering property, casualty, life, health and special lines – such as agricultural, aviation, space, engineering, HMO reinsurance, marine, nuclear energy, and special risks.
Dec
22
Private Medical Insurance Set for Review in the UK
Filed Under Aviva, BUPA, Health Insurance, Healthcare, Medical Insurance, United Kingdom | 8 Comments
Following the British’s government’s announcement that it will be embarking on major reforms and an overhaul of its long established National Health Services (NHS), the country’s independent body responsible for ensuring fair competition is maintained – the Office of Fair Trading (OFT) – has announced it will investigate the private healthcare sector in the country.
The formal investigation by the OFT will commence in Spring 2011 and will examine the nature of competition and barriers to entry affecting the private healthcare market in the UK; a market which is worth some £5.5 billion (US$8.5 billion) a year. The private healthcare market in the UK is set to grow in importance, with the impact of changes to the NHS emerging in the period between 2011 and 2015. The healthcare industry in the UK is also being stretched due to the needs of an ageing population and higher life expectancy levels.
The UK is a country where the majority of the population are only used to paying a basic contribution from earned income for medical treatment, which entitles a patient to treatment through the NHS for any ailment or procedure required. The purchase of private healthcare is a discretionary option primarily available to the more affluent element of the population or for employees of companies through corporate schemes; the NHS is itself a significant user of private healthcare facilities. However, following the government’s decision to overhaul the public healthcare system, the private medical market has come under the spotlight with the expectation that it will play an increasingly important role in the provision of healthcare services in the UK.
The OFT investigation will focus of the level of competition in the private healthcare market in the UK at national, regional and local levels and the possible restrictions on companies seeking to enter the market or expand within the market thus preventing the market from developing.
A fundamental issue to be investigated by the OFT concerns the application of network agreements between private medical insurers and private healthcare providers in the UK. This has lead to patient referrals being limited to a selected number of independent hospitals in the UK, although, the argument in favor of this approach, is that it minimizes costs by higher utilization of selected facilities. The other concern is that some smaller healthcare providers not in network agreements are being disadvantaged.
A contention is that if the UK healthcare sector opens up with more players entering the market, Private Medical Insurance (PMI) coverage will expand and be able to offer the British public lower costs for private healthcare.
The benefits of PMI compared with treatment under the NHS are that policyholders are able to get treatment more quickly with a choice of private high quality medical facilities.
A separate issue concerns the general purchase of private medical insurance. In the USA healthcare is exceptionally expensive with a local PMI policy being critical for patients to meet medical costs. The NHS reforms in the UK are not expected to result in a USA style healthcare system, however, similarities could arise with PMI and private health coverage being adopted on a more individual basis.
When comparing local and international PMI the difference in the scope of medical coverage is considerable, with international policies being more flexible. Local policies will often have more restrictions attached to the policy such as age limits set at 65, annual limitations on claims, higher medical exclusions, more pre-existing medical condition exclusions, geographical limitations and limited healthcare provider availability. Also, current policyholders of a local PMI policy may be barred from renewing cover if an insurer feels the client has become high risk.
The alternative to a local PMI policy is an international policy which will have a more comprehensive range of cover provided for policyholders. Although the premiums are higher compared to local PMI policies, fewer exclusions will apply and pre-existing conditions can normally be included for an additional premium. There is also likely to be a larger network of hospitals and medical centres available to policyholders, along with a wider variety of treatment options and maximum policy limits. International medical policies are also transferable around the world, including the USA if necessary.
There will be a difference in the calculation of renewal premiums between local and international PMI, with local PMI policies’ renewal premium usually based on the previous year’s claims made by a client, while international policies are normally renewed on a community rated basis. The benefit of the renewal criteria on a community basis is that premiums will allow for worldwide cover rather than a specific country.
If there are changes within the UK healthcare market it could lead to PMI becoming more affordable at a local level in the UK. Currently PMI obtained in the UK is predominately to supplement healthcare services or medications which are not covered by the NHS. Currently PMI in the UK is dominated by Bupa, Aviva, PruHealth and AXA PPP.
The benefits of PMI is that it provides the policyholder the ability to avail themselves of treatment for acute medical conditions, private healthcare services, surgery and in / out-patient services, including dental and optical treatments if specified. A comprehensive PMI will offer the policyholder a wide variety of healthcare cover, although the insured does have options to tailor the policy to their specific needs, with optional levels of excess payments. The network of private healthcare facilities will speed up patients’ waiting times, particularly in circumstances such as surgical procedures, compared to the use of the NHS system.
A key factor in choosing a private medical insurer is that the cheapest rarely offers the best value for money.
Insurance Companies Mentioned:
Bupa
Bupa was established more than 60 years ago in the UK and is now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.
AXA PPP
Originally known as PPP Insurance, the company became part of the Global AXA Group in 1999 and changed its name to AXA PPP in 2002. AXA PPP is now an international health insurance company with over 2 million customers around the world.
Aviva
Europe’s fourth largest insurance company, with more than 300 years of experience in the global insurance industry, Aviva is committed to the safety and satisfaction of its customers. They sell a broad range of insurance products including motor and property insurance, protection and health insurance, business insurance, life insurance and pensions.
PruHealth
PruHealth is part of a joint venture named Prudential Health Holdings Limited, between Prudential Assurance Company of the UK and Discovery Holdings. The joint venture was started in 2004 and offers private medical insurance in the United Kingdom. Currently Discovery Holdings owns a 75 percent stake in the joint venture while Prudential Assurance holds the remaining 25 percent.
Dec
9
MaxBupa Increasing Base Capital in India
Filed Under BUPA, Health Insurance | 6 Comments
MaxBupa is one the largest health insurers present in India and is setting its sights on growing its operation in the second most populous country in the world. The news emerged as Bupa released its Health Pulse 2010 report, which highlights the growing concern of chronic disease globally.
The joint venture between Max Indian and UK-based Bupa initially started with paid-up capital of Rs1.51 billion (US$34 million:£21 million) when it originally started trading earlier this year, which has since increased to approximately Rs2.4 billion (US$53 million:£33 million) (link). Now, MaxBupa has revealed that its aim is to grow its paid-up capital over the next 4 years to Rs70 billion (US$1.5 billion:£973 million).
The MaxBupa joint venture is a standalone Indian health insurer, in a market which has become increasingly competitive over recent years. The Indian insurance sector is forecast to expand in the coming years in alignment with positive economic conditions in the country. India has emerged from the 2007-2008 global financial crises as a major target for insurance companies in a bid to take advantage of the growing demand for protection products and services.
As multi-national insurers such as Bupa struggle to generate profitable returns in established markets such as the United Kingdom and the United States, attention has been channelled into the development of opportunities in emerging markets, with India being a prime target. MaxBupa has been able to grow business in India despite challenges from rival insurers such Star Health and Allied Insurance and Apollo Munich Health Insurance – both standalone insurers through Indian-Foreign company joint ventures.
The announcement of MaxBupa’s target for an increase in paid-up capital came as the Indian health insurer unveiled its Bupa Health Pulse 2010 report, which highlights concerns about trends in heart disease and diabetes among the Indian population. This reflected the changing lifestyles and emergence of unhealthy eating habits being experienced in India in recent years.
Bupa’s Health Pulse 2010 report covered a survey involving 12,000 adult participants across 12 countries worldwide seeking views on chronic diseases. The results from participants in India showed that over 40 percent ranked diabetes as one of the top three developing health concerns, with 50 percent rating heart disease as the main concern.
Participants in Bupa’s Health Pulse survey were from Australia, Brazil, China, France, Germany, Great Britain, India, Italy, Mexico, Russia, Spain and the United States. Diabetes emerged as a major future health worry across all countries taking part, with Mexico and India ranked the top two. The report also highlighted that 55 percent of Indians had been for a medical check-up relating to the potential risk of suffering from a chronic disease, while 25 percent of Indians had not been for any health checks; this was below the 31 percent international average of people not seeking medical consultation to assess health risks.
The combined effects of a robust economy and growing health concerns in India are forecast to drive the demand for health insurance. MaxBupa is in a prime position to meet the insurance needs of the Indian population. The Indian-British joint venture is still a relative young health insurer in India, but has already established itself as one the main suppliers of private health insurance in the country.
MaxBupa currently has a network across 6 Indian cities – Delhi, Mumbai, Hyderabad, Chennai, Bangalore and Pune – with a team of employees exceeding 500 people. Healthbeat is MaxBupa flagship health insurance product, which is available to all Indians.
Insurance Companies Mentioned:
MaxBupa
Max Bupa Health Insurance is a 74:26 joint venture between Max India Limited and UK-based Bupa. Bupa is a leading private healthcare provider with more than 10 million customers worldwide and over 60 years experience in the health sector. The Max India Group has expertise in both health and insurance related services including hospitals, clinical research and life insurance.
Star Health and Allied Insurance
Star Health and Allied Insurance is a specialist health insurance provider and was the first stand alone health insurers in India. Star Health and Allied Insurance provides health, accident, student, travel, and life insurance.
Apollo Munich Health Insurance
Apollo Munich Health Insurance Co. Ltd. (previously known as Apollo DKV Insurance Co. Ltd) is a joint venture between the Apollo Hospitals Group and Munich Health. Apollo Munich Health Insurance provides health, personal accident and travel insurance.
Nov
24
Record Growth in Australia’s Private Health Insurance Market
Filed Under BUPA, Insurance Company, Medical Insurance | 22 Comments
Australia’s public health system, Medicare, provides a substantial cover of healthcare treatment. However the public health system is currently under threat. There is a shortage of medical staff, hospital beds, and medical facilities such as brain scans. Patients under the public health system are therefore having to endure considerably long waiting lists.
Medicare was introduced in 1983, allowing Australian citizens to receive emergency, hospital treatment, diagnostic investigations, and prescribed surgery for free. Under the public health system, General Practitioner appointments, chiropractic, physiotherapy, specialist services, and pharmaceutical medications are either fully or partially subsidized by the Government. Services not included under Medicare include ambulance cover, dental care, elective treatments, and access to private hospital services. Medicare covers 75 per cent of private healthcare costs.
The Australian Government wants more people to obtain private health insurance to ease the impact of large numbers of patients on the public healthcare system. With Government incentives and insurance rebates introduced in the last decade, there are now more reasons for Australians to take out private health insurance.
In 2000, the Government introduced the Lifetime Health Cover (LHC) policy, which provides incentives for younger Australians taking out health insurance. The initiative may have been proven successful, given the last quarterly report reveals the largest increase in Australian private medical insurance coverage were among individuals aged between 20 and 24.
With the LHC policy, people can save considerable amounts on their health insurance costs if they take out hospital coverage prior to their 31st birthday. Individuals who do not have hospital cover on the 1st July following your 31st birthday, will pay a 2 percent loading for every year they are aged over 30. The maximum loading is 70 percent. The exception is for individuals who took out hospital cover before 1 July 2000 and maintained it – pursuant to the initiative, as these individuals pay a base rate regardless of their age.
Further incentives have included the Private Health Insurance Rebate, introduced in 1999, which offers at least 30 per cent rebate on private health insurance costs. The rebate is increased to 35 per cent for people aged between 65 and 69 and 40 per cent for those aged 70 and over.
Many Australians are also taking out private health insurance to enable choice of doctor and hospital, as well as avoiding long waiting lists endured under the public health system.
Given the introduction of Government incentives to purchase individual coverage, private health insurance has soared in Australia, reaching record membership coverage in decades.
“This is the first time there has ever been more than 10 million people in Australia with hospital insurance since the introduction of Medicare”, the Private Health Insurance Administration Council revealed in its’ September 2010 quarterly report.
The Private Health Insurance Rebate has undoubtedly proven successful, given the upswing in private health coverage since the introduction of the scheme. In order to save $1.4 billion, Health Minister Nicola Roxon announced her intentions to reintroduce legislation aimed at means-testing the rebate. Although her initiative was blocked by the Senate, Nicola Roxon aims to use the growth in the number of health insurance policies to gain approval.
Despite high increases in insurance premiums, doubling the inflation rate, last year Australia had the highest incline of new memberships since 2001. Australia’s Health Minister Nicola Roxon argued that the premium increase of 6.0 per cent this year was actually lower than last year’s increase of 6.02 per cent. Although it was higher than 2008’s rise of 4.99 per cent.
On the other end of the scale, the United Kingdom has experienced a record decline in private health insurance members, driven by recession pressures forcing employers and individuals to cut back in costs. This is the lowest record of coverage since the 1970s. The number of private health insurance members have fallen to around 7.2 million, 11.7 per cent of the population. This compares to 12.5 per cent private health insurance coverage among the UK population in 2007, market researchers Laing & Buisson report.
Given the increase in private health insurance coverage in Australia, the industry has grown considerably as a result. Key competitors in Australia on the health insurance market are Medibank Private, BUPA, Hospitals Contribution Fund of Australia, and HBF, listed by market researchers IBISWorld.
Over the last decade, leading health insurers have emerged with Medibank controlling 30 per cent of the private health insurance market. Around 100,000 health insurance policy holders were added in the last year, taking the total number of members to 3.7 million. Bupa Australia also shares a large proportion of the health insurance market with over 3 million members.
Medibank’s revenue of $4.6 billion this year, was a 17 per cent increase on the previous year, with $4.4 billion coming from premium revenue. Medibank Private’s expansion into healthcare, through the acquisition of Australian Health Management in 2009, increased the company’s profit growth further, contributing $19 million in the last year. In the last 18 months Medibank has also purchased Health Services Australia and McKesson Asia-Pacific.
Following the merging of Bupa Australia with MBF in 2008, Bupa has become the second largest health insurer in Australia. In year end report 2009, Bupa Australia announced increased revenues and surplus with membership growth of 1 per cent since year end.
Overall there are good opportunities for further growth in the Australian health insurance market due to the government incentives that encourage the uptake of private health insurance, as well as the country’s strong economy and growing population.
Oct
21
Growth Predicted for the Thai Insurance Market
Filed Under AXA PPP, BUPA, CIGNA, Expat Insurance, Healthcare, Insurance Company, Medical Insurance | 7 Comments
Despite Thailand’s recently social turmoil, political uncertainty and world financial crises, the Thai domestic insurance market is targeting an overall increase of 6% in insurance premiums by 2014.
The growth in the general Thai insurance market is driven by a combination of factors derived from the improving prosperity of the population, which translates into increased demand for protection of property, auto and savings, together with health and life cover.
The Thai government is looking to promote the insurance business in the country by increasing awareness of the need and benefits of insurance products. As the Thai economy develops, and improvements in wealth are created, the needs of the population are expected to change; with greater reliance on the purchase of insurance for asset, health and life protection. This was highlighted in a recent East Asian Insurance Congress Forum held in Bali, when the positive steps being taken by Thailand in the country’s Second National Insurance Master Plan – covering the years from 2010 to 2014 – were recognized.
The insurance sector in Thailand is an emerging industry generating total annual premiums in the order of 38.77 billion Baht (US$ 1.3 billion); with the non-life sector amounting to 14.02 billion Baht (US$ 470.6 million) and the life sector totaling 24.75 billion Baht (US$ 830.6 million).
The insurance industry in Thailand, as in other countries, depends on general economic prosperity to maximize potential development. Maintaining the 4 percent per annual average growth rate – achieved in Thailand between 2000 and 2008 – will be challenging, but the actions being taken by the Thai government are aimed at providing economic stimulation with this target in mind.
The three main domestic providers in the Thai non-life insurance market are: Viriyah Insurance, Dhipaya Insurance and Bangkok Insurance, with each company holding approximately 15 percent, 7.5 percent and 6.5 percent market share respectively. Within the Thai health insurance market there are recognized western insurers such as Bupa International, Cigna and AXA – each providing healthcare cover for Thai citizens and expatriates living in the country.
Even though Thailand has experienced internal and political tensions in recent years, the medical insurance sector in the country is well structured, with developed facilities delivering a high standard of private healthcare. This reflects the general state of Thailand’s economy, with strong investment opportunities in a free-enterprise society.
It is estimated that 10 per cent of the population in Thailand has private medical healthcare insurance. With a population of 65 million people, the Thailand’s private medical insurance premium market is valued at Baht 19.9 billion (US$ 670 million) per year – which is only marginally less than the UK private healthcare sector.
The much improved Thai healthcare system is primarily due to the changes made to the previous means-tested scheme within a compulsory universal healthcare system. The network of 450 private Thai hospitals – primarily located in Bangkok – have a good reputation for the provision of quality healthcare treatment generating short waiting times. Private hospitals such as Bumrungrad and Bangkok International have developed a reputation for the quality of healthcare provision – especially with foreign visitors.
One of Thailand’s domestic insurers – Viriayh Insurance – has been established for more than 60 years, providing a range of general insurance products and is one of the market leaders in the country for non-life products. In recent years, Viriayh has developed micro-insurance products to meet the demands of the lower-income population within the universal healthcare system. Viriayh Insurance also provides fire, marine, motor and miscellaneous insurance; in 2009, Viriayh Insurance recorded a growth rate of 8.16 percent compared to the average growth rate of 3.2 percent in the Thai non-life insurance industry.
The Thai private healthcare network has developed as an alternative to the indigenous public health system, which lacks equivalent quality standards. Also, the private health sector has been able to capitalize on the growing demand for medical tourism in Asian countries, including Western European and American patients. This is coupled with the demands from the significant expatriate community in Thailand – which is estimated at 850,000 people.
There is every indication that the demand for private healthcare in Thailand will continue to grow – sales increased by 22 percent in 2009 – despite the global economic crisis and the political upheaval in Thailand. With the planned addition of micro-insurance products to the Thai insurance market – offering improved protection levels for clients and the potential for increased income for insurance companies – there are encouraging signs for business expansion.
The Thai insurance market has been buoyant in recent years. It was one of the leading insurance markets in the Asian region, but suffered when the 1997 Asian financial crises hit the Tiger economy causing a sharp decline in insurance premiums. However, business recovered after the turn of the century with Asian countries now expecting further strengthening of their economies – especially in the insurance industries. China is emerging as the pivotal source of future earnings for international insurers, with regional neighbors – Thailand and Indonesia – expecting to reap knock-on benefits.
In the short and medium term, the growth in the Thai non-life insurance market is expected to be significant. This reflects the planned action by the government of Thailand to implement further financial stimulus schemes in order to boost this country’s economy, aimed at increasing exports and developing industrial activity. This in turn is expected to drive demand and the purchase of insurance products in Thailand.
Insurance Companies Mentioned:
Viriayh Insurance
Viriayh Insurance was established in 1947 and is the leading insurance company in Thailand and has achieved this position for the last 15years. Viriayh Insurance offers a wide range of insurance products developed and designed based upon the needs of its customers.
Bangkok Insurance Public Company Limited
Bangkok Insurance Public Company Limited is based in Thailand. And provides non-life insurance. Bangkok Insurance services include travel, motor, personal accident (PA), health, residential and commercial property, personal property, third party liability, business all risks, industry all risks, marine and cargo and miscellaneous insurance services
Bupa
Bupa was established more than 60 years ago in the UK and is now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, and China and across Latin America.
AXA
AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.
CIGNA
A global health service company dedicated to helping people improve their health, well being and sense of security. CIGNA Corporation’s operating subsidiaries provide an integrated suite of medical, dental, behavioural health,
pharmacy and vision care benefits, as well as group life, accident and disability insurance, to approximately 46 million people throughout the United States and around the world.
Oct
19
Resolution Ltd Agrees Deal for UK Based Bupa Health Assurance
Filed Under AXA PPP, BUPA, Health Insurance, Insurance Company, Life Insurance, United Kingdom | 7 Comments
Resolution Ltd is set to acquire Bupa’s Health Assurance business in a £102 million (US$164 million:122 million Euros) deal.
As part of Resolution Ltd’s strategy to build a substantial share of the UK life insurance market, the company has reached an agreement with Bupa to acquire its life, income and critical illness insurance business. This enhances the previous acquisitions by the Clive Cowdrey formed company – Resolution Ltd – and follows the purchase of Friends Provident in 2009 for £1.9 billion (US$3.04 billion:2.28 billion Euros), and the £2.75 billion (US$4.4 billion:3.3 billion Euros) acquisition of AXA’s UK life assurance and savings arm earlier this year.
The £102 million (US$164 million:122 million Euros) acquisition of Bupa Health Assurance (BHA) by Resolution Ltd will be completed through the Resolution Ltd life subsidiary Friends Provident Life and Pensions Limited in a move to further expand the Resolution’s UK Life Project and augment its share of the life protection business.
The deal by Resolution Ltd follows the largest deals completed by the insurance buyout specialist, with a £2.75 billion (US$ 4.4 billion:3.3 billion Euros) for the British branch of AXA in June of this year, and the £1.8 billion (US$ 2.9 billion:2.2 billion Euros) in 2009 for Friends Provident. Resolution Ltd. will be using its own capital in reserves to acquire the UK based Bupa Health Assurance.
Entrepreneur Clive Cowdery founded Resolution Ltd in 2008 as an investment platform in the UK life sector. The move for Bupa Health Assurance continues Resolution Ltd’s further expansion of insurance products, creating access to Bupa’s income, critical illness and life insurance range of products.
The acquisition will strengthen Resolution’s market share for individual protection products and create another revenue stream for Friends Provident in the UK, and global market, for this sector of the insurance business. In addition to the deal, an agreement between Friends Provident and Bupa will enable the brands to work in partnership, with the ability to introduce each company’s products through their respective distribution channels.
This acquisition will strengthen the Resolution Group’s risk business product range and improve the profitability of the protection business, which it could sell along with the group’s corporate pensions.
The decision by BUPA to sell BHA is part of the company’s strategy to focus on the healthcare sector and UK health insurance products and services. The move by the Bupa Group follows a surplus of £428 million (US$ 657 million:513 million Euros) announced in June 2010, after a period of stagnation in the UK market.
Speaking about the decision, the Managing Director of Bupa Health & Wellbeing, Dr Natalie-Jane Macdonald, said: “We are proud of Bupa Individual Protection and Bupa Group Risk, which both have reputations for high-quality products and customer service. Our decision to sell is based on strategic fit. The sale will allow Bupa Individual Protection and Bupa Group Risk to benefit from belonging to a company with a strong focus on both protection and risk. Importantly, this decision also allows Bupa to concentrate on healthcare products and services”
BHA was established in 1994, and is a wholly owned subsidiary of Bupa, created to provide individual and group protection insurance, in addition to Bupa’s primary business of private medical insurance in the UK market.
For the first half of 2010, Resolution’s individual protection premiums produced a market share for AXA Sun Life of 6%, with the Friend Provident market share standing at 5%. In the same period, the BHA individual protection premiums were £11 million which represented a 3% market share.
In 2009, Bupa Health Assurance had a 24 percent increase in new business for their critical illness and income protection products. The deal is expected to be completed by the beginning of 2011, with Bupa Health Assurance becoming a stand-alone entity within the Friends Group in the meantime.
The Resolution Ltd’s overall goal is to build a life insurer with an embedded value of £10 billion (US$ 16 billion:12 billion Euros) by 2013 and then to either sell or float the group on the stock market. The respective embedded values currently are estimated at £228 million (US$ 365 million:273 million Euros) for BHA and £6 billion (US$ 9.6 billion:1.2 billion Euros) for Resolution Ltd existing business.
In 2008, the UK insurance market was the biggest in Europe and the third biggest globally, which a total premium income of £215.3 billion (US$ 344 billion:258 billion Euros).
Final completion of the deal is subject to Financial Services Authority (FSA) and the Guernsey Financial Services Commission approval.
Insurance Companies Mentioned:
Bupa
Bupa was established more than 60 years ago in the UK and is now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.
Resolution
Resolution Operations LLP is a privately owned advisory and operating firm which provides services to Resolution Ltd. Resolution Operations LLP is part of the Resolution Group that also includes Resolution Capital Limited and Resolution Financial Markets LLP. Resolution Capital Limited facilitated the creation and initial public offering of Resolution Limited. Resolution Financial Markets LLP undertakes for Resolution Operations LLP a range of activities that include working with investors to facilitate the direct placing of equity and debt with institutions.
Friends Provident
Friends Provident Group plc, a life and pensions company, was founded in 1832 and
was acquired by Resolution Limited in 2009. Friends Provident provides a range of financial products and services for individual customers, commercial businesses, and other institutions. Its protection products include life cover, critical illness cover, income protection and business protection.
AXA
AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.
Oct
15
Some Expatriates Find Healthcare Abroad Unsatisfactory
Filed Under BUPA, Expat Insurance, Health Insurance, Healthcare, International Healthcare | 3 Comments
Bupa International, a leading international insurance provider from the United Kingdom, has recently published the results of a survey the company conducted to determine the level of satisfaction with the healthcare provided to expatriates living abroad. The survey revealed that from the more than one thousand expatriates participating in the survey, a surprising 20 percent felt that their health deteriorated after having moved overseas.
Furthermore, of the expatriates participating in the Bupa International survey, close to 50 percent expressed dissatisfaction with the medical services received in their new home country. This high percentage may not necessarily indicate that the healthcare standards in the new country are lower than those provided in their home country, but it may point to the fact that the medical services were found lacking after the need for them were unavoidable, for instance, due to an emergency situation.
Examining the real reasons why expatriates believe that medical services are inferior overseas and why they feel they are less healthy in their new home country, also shed some insightful light as to what can be done to improve the situation for expatriates in similar circumstances.
On the reasons why expatriates are dissatisfied with the healthcare they receive abroad, it became apparent that persons requiring urgent medical attention were less likely to know much about the medical services available until that moment of need. Such critical time may actually be the worst possible time to make a fair judgement call about the appropriateness of the care or facilities imparting the said medical attention. On top of this, the methods of care and delivery of service vary from country to country, and in some cases, even within the medical facilities in the same country.
The experience in a hospital is often-times determined by the nearest and more frequent point of human contact: the nurses. A comfortable hospital stay in most occasions can be attributed to the constant care and attention the nurses deliver to the patient. However, in countries like Spain, Turkey and Northern Cyprus to name a few, the basic nursing duties are expected to be performed by relatives of the patient. In cases where the expatriate is single, or one that has only one partner accompanying him/her, more likely than not the quality of the nursing care will be deemed poor, affecting the overall level of satisfaction perceived from the healthcare standards in general in that country.
As a conclusion, the report released by Bupa International recommends to expatriates planning to relocate overseas among other common-sense preparations, to study some basic information about the healthcare system at the destination country, before moving in. Knowing in advance the details on how to gain access to the medical services and facilities as an expatriate will afford better preparedness, should an emergency situation occur.
Another critical decision for an expatriate planning to relocate overseas is the type of medical insurance selected. It is of utmost importance to choose the right type of medical cover whilst living outside of the home country. It is not uncommon to choose the wrong type of medical insurance, having to end paying excessive and unexpected medical bills as a result.
The decision centres around selecting between local or international medical insurance for an expatriate buying medical insurance abroad. The destination country has, up to a certain extent, some bearing on which type of cover to choose. Most expatriates choose an international medical cover over a local plan for the following reasons:
1. Local medical insurance plans provide cover only in that country. This can be extremely important to the expats living in a country where medical facilities are inferior to those in their home country. Should the expat have an accident or become sick, being able to go home for treatment or to an alternative country where the medical facilities are of a higher standard gives a level of protection that brings piece of mind.
2. An international medical plan will follow the insured everywhere they decide to go, whilst the local plan would need to be cancelled and new cover taken out upon leaving the country of the local cover. This can bring problems in as much as a new policy will have waiting periods and some conditions may now be excluded as they will be considered as pre-existing.
3. An international medical plan allows the freedom to select where and by whom treatment is carried out. Most local plans have a limited local network of hospitals that will accept their coverage and therefore no choice is available to the expat or their family.
4. International medical plans are normally renewable for life. Whereas local plans will not renew cover when the client is typically over the age of 65.
5. All insurance companies have exclusions, but generally international medical policies have far fewer. The level of cover is also much higher with an international policy, typically the annual limit is over US$1 million.
6. Renewal premiums for local medical plans are based on the previous years claims, whereas an international policy is generally community rated. This means that the renewal premium is based on policy holders worldwide. Ensuring that the renewal premium is always manageable no matter how ill the insured is or how many times the person has had to go to hospital.
7. Most expats select international medical cover for themselves and their families because of the overwhelming advantages and peace of mind that this protection gives them.
8. Local plans can be seen as cheap at first sight, but long term they may prove to be very disappointing and inadequate in the level of cover available through them.
Insurance Company mentioned:
Bupa was established more than 60 years ago in the UK and it now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.
Sep
13
What is Happening to Bupa in the International Private Healthcare Business
Filed Under BUPA, China, Expat Insurance, Health Insurance, Insurance Company, Life Insurance, Medical Insurance, United Kingdom | 6 Comments
In 2007, Bupa took a major strategic decision to sell its network of private hospitals in its long established core market in the United Kingdom (UK). This generated a capital fund of £1.44 billion (US$2.2 billion) at a time when the UK – along with other major trading nations – were starting to feel the effects of the financial tsunami. The sale provided the company with liquidity to penetrate the expanding international market for privately funded healthcare.
Bupa started in the 1970’s, when the UK healthcare sector lacked private healthcare facilities for private health insurance holders. After more than three decades of providing direct patient care with its network of UK healthcare facilities, Britain’s largest medical provider, took the decision to shift its focus to opportunities worldwide and exit the direct hospital market in the UK – which was becoming increasingly competitive.
Nowadays, Bupa has ten million customers across 190 countries, and is the largest expatriate health insurer, providing a range of services from hospital, care homes, health assessments units and insurance products, including cover for repatriation and evacuation.
Bupa recently released first half year figures for 2010, generating a surplus of £428 million (US$ 657 million). Difficult economic conditions in the UK, USA and Europe, have been offset by positive operating conditions globally and, in particular, Australia and Saudi Arabia, where economies have not been so badly affected as those in the western hemisphere; in the six month period between the 1st January and the 30th June 2010, Bupa memberships numbers rose from 10.8 million to 10.9 million, with 57% of Bupa’s income now being generated outside the UK.
One of Bupa’s prime business transactions recently has been the joint venture with private insurer Max India facilitating the establishment of a standalone private health insurer, named Max Bupa, in a rapidly developing Indian economy – where only 2 per cent of 1.2 billion population holds private health insurance. The long term goal for Max Bupa is to capitalize on the growing middle class market in India.
In a bid to capitalize on new Russian legislation, which states that all expatriates working in Russia must have ‘Russian Approved’ private health insurance, Bupa has formed a partnership agreement with Russian based insurer Ingosstrakh. The two private health insurers joined forces in 2009, using Ingosstrakh local knowledge and Bupa’s expertise in private expatriate health insurance, to offer a range of Russian health insurance products for both expatriates working in Russia and Russian citizens employed abroad. Part of Bupa’s focus in the Russian health insurance market is based on the oil, gas and maritime industries, which play a big part in one on the world’s fastest developing economies.
While Bupa International has established itself in the private health insurance markets in Indian and Russia, it has taken the decision to stall further expansion in the faster growing Chinese market. This reflects the competitive position in a market where the population favors continued reliance on state run healthcare provision. However, Bupa’s competitors, Allianz and AXA PPP, have taken aggressive steps to seize opportunities in the Chinese insurance market in the sectors where increased demand for private health insurance exists.
The view is that considerable scope for growth exists in the international healthcare and insurance markets – especially the BRIC countries of Brazil, Russia, India and China and other countries such as Thailand, Dubai and various other countries in Latin America. While the established markets in the UK, USA and Europe are now beginning to show signs of economic recovery, with major structural overhauls of healthcare provision in the UK and USA potentially offering prospects for expansion.
Bupa’s Chief Executive Ray King commented on the healthcare reforms by saying “The UK and US governments started to articulate their plans for reform of their health care systems and we believe that this should offer new opportunities for our businesses in the future.”
Taking into a account the long term trends of increasing aging population, the advances in medical technology, the burden of chronic diseases, coupled with the growing wealth in emerging countries, and the revamping of healthcare systems in the major UK and USA markets, the future for Bupa remains positive. Although in the short term, lingering high unemployment levels and economic austerity measures present Bupa with challenging goals.
Bupa has taken greats strides to expand and diversify in recent years, creating new insurance products and services to meet the needs of international clients, coupled with keeping established and trusted policies. The expertise of the Bupa Group, and, where completed joint ventures with local partners, means Bupa are able to deliver a wide range of health plans to meet local needs.
With their expert knowledge of expatriate healthcare plans, Bupa provides such products as worldwide evacuation, repatriation, medical insurance plus coverage and specialist products; such as Bupa’s oil and gas healthcare plans which cater for the needs and specific local demands of this industry. Bupa’s wide range of plans provides the basis to offer policyholders comprehensive services, and Bupa International endeavors to combine the best products, with customer satisfaction focusing on service and value for money.
Bupa’s balanced international portfolio and strong market positions throughout the world is considered satisfactory to enable it to withstand the challenging conditions in the short to medium-term, with trading conditions not expected to change materially in the second half of 2010. Some recovery is forecast for 2011 and overall the future for Bupa is considered positive.
Insurance Companies Mentioned:
Bupa
Bupa was established more than 60 years ago in the UK and is now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.
Max India
Incorporated in 1988, Max India Limited is a holding company with business interests working in the healthcare and services industries. Their wide range of health related interests include a joint venture life insurance company, Max New York Life, a healthcare services company, Max Healthcare, and a clinical services company, Max Neeman Medical International. The Max India Group reported US$ 860 million in revenues for 2007-2008 and will soon add Max Bupa to their list of businesses.
Ingosstrakh Insurance Company
Ingosstrakh Insurance Company was established in 1947, operating in Russian and international markets. Ingosstrakh provides insurance products and services to retail and corporate clients. It offers life, accident, car, property, mortgage, boat and yacht, voluntary health, and travel insurance products. The company also provides liability, motor, agricultural, trade, marine, voluntary medical, and aviation and space risks insurance products.
Allianz
Allianz Group is one of the leading global services providers in insurance and asset management. With approximately 153,000 employees worldwide, the Allianz Group serves approximately 75 million customers in about 70 countries. On the insurance side, Allianz is the market leader in the German market and has a strong international presence.
AXA PPP
Originally known as PPP Insurance, the company became part of the Global AXA Group in 1999 and changed its name to AXA PPP in 2002. AXA PPP is now an international health insurance company with over 2 million customers around the world.
Aug
27
Bupa Expands Health Care Select Product Line
Filed Under BUPA, Health Insurance, Healthcare, Insurance Company, Medical Insurance | 4 Comments
Bupa has added Health Care Select 3 Plus (HCS3P) as a fifth choice in their Care Select insurance product line, effectively extending their Heartbeat range of plans offered to individuals in search of private medical insurance.
In the scheme of the Heartbeat Range, Health Care Select 1 delivers the most comprehensive cover, whilst Health Care Select 4 brings the lowest level of cover. Health Care Select 3 Plus fits right in between these two levels of medical cover. A specialist plan that provides medical cover for heart and cancer is also included under the Heartbeat Range.
Health Care Select 3 Plus covers the full cost of hospital charges and the fees of consultants for in-patient and day treatment, including cancer treatment. Also covered are the full cost of radiotherapy and chemotherapy, diagnostic tests and therapies for cancer treatment, as well as eligible outpatient cancer drugs. The benefits for outpatient treatment have a coverage ceiling of US$1,550 (EUR 1,220) for the combined cost of consultations, diagnostic tests, physiotherapy and other therapies.
Other benefits in this new HCS3P plan include the cost of a private ambulance up to US$93 (EUR 73) each tip, accommodation for one parent when staying with a child under 12 years of age who is receiving in-patient treatment, plus access to the Bupa health line service. Not covered under this plan are the complementary medicine and psychiatric treatments.
By removing benefits such as psychiatric treatment and limiting the outpatient coverage, this plan reduces the amount paid in the form of premiums, something that clients concerned with the cost of the plan may find reasonable, as not all clients feel that these benefits are necessary.
As a trend, the modular approach in the level of cover offered by insurance product lines, like the Heartbeat Range offered by Bupa, is gaining attention among providers of private medical insurance and other companies are coming out with their respective product offerings.
The following table summarizes the benefits offered by the Health Care Select products in the Heartbeat Range:
Insurance Company mentioned:
Bupa is an international health insurance company that provides health insurance for individuals and companies all over the world. Bupa has offices on three continents and over 7 million customers’ world wide. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world.
Aug
13
Bupa Growing Abroad
Filed Under BUPA, Expat Insurance, Health Insurance, Hong Kong, IHI Bupa, Insurance Company, International Healthcare, Medical Insurance, Spain, USA Health Insurance, United Kingdom | Leave a Comment
Bupa, the UK’s largest private medical insurance provider, has announced its financial results for the first half of 2010. The report indicated that while the company’s UK membership numbers remained flat, there was considerable growth in international markets contributing to an overall increase in income of £3.71 billion(US$ 5.7 billion) for Bupa.
Trading conditions in the UK, US and Spain have been particularly difficult since 2008, reflecting the fallout from the general downturn in business activity in these countries. However, trading in Australia and other non-European countries, and the USA, has helped Bupa generate an overall increase in revenue for the first six months of 2010. The UK health insurer reports a 10 per cent increase in revenue to £3.71 billion (US$ 5.7 billion) producing a 5% increase in surplus funds amounting to overall growth of £183.6 million (US$ 285 million) for the same period. As Bupa is a provident association all funds are reinvested into the company, consequently Bupa does not recognize “profit” per-se, but rather “surplus” revenue.
The 10% increase in revenue for Bupa was driven by organic growth of 4% and agreeable foreign exchange movements of 6%. Higher sales in Australia contributed to higher revenue, and a favorable exchange rate from the Australia Dollar to the Sterling was a strong factor for the company’s success.
As a result of the tough economic conditions in the UK, Bupa experienced a 0.8% decline in membership numbers over the 6 month period. Revenue and profits from the UK market remained flat for the first half of 2010 following one-off restructuring costs, but significant loss was contained by lower claims payments and cost savings resulting from new a new administration system adopted in August 2009.
Trading in the USA private medical market was also adversely affected because of the economic downturn, high unemployment levels, and the reform of the healthcare system in the country. These factors all contributed to the slowdown in new business sales and renewals. Bupa continues to develop new products to meet the changing demands in the American private healthcare market, with new business opportunities arising following the passing of health reform legislation; industry watchers expect increased sales volume for USA private medical insurance as President Obama’s reforms roll out through to 2014.
In international markets, Bupa’s surplus increased from £51.3 million (US$79.8 million) to £88.7 million (US$138 million) over the six month period, until 30th of June 2010. Bupa International still remains the largest provider of international private medical insurance, with a global 2% increase in policyholders over the reporting period; primarily due to Bupa Arabia, and Bupa Australia experiencing increasing membership numbers.
Ray King, Chief Executive of Bupa commented on the future of the Australian health insurance market by saying: ‘In our Australian insurance business, the integration programme is almost complete and we look forward to the launch of a single product suite later this year which should further enhance our competitive position.”
In other markets, Bupa Latin America reported an increase in profits compared to the same period last year, explained by steady membership growth and lower claims being made. Bupa Hong Kong revenue increased modestly, and Max Bupa, the joint India venture launched in March 2010, has 6 retail offices in major cities across the country; this is planned to increase to 9 outlets by the end of 2010.
The future for Bupa in the UK and US remains unclear due to the stringent economic conditions and the impact on demand for private health insurance products. However with both governments implementing major reviews of healthcare provision it may give the UK medical provider opportunities to accelerate business in these markets. Chief Executive of Bupa, Ray King said “The UK and US government started to articulate their plans for reform of their healthcare systems and we believe that this should offer new opportunities for businesses in the future.”
The future outlook for Bupa internationally looks positive; consolidating their market presence in the international health insurance market. However, the markets in Europe and North America are still subject to difficult economic conditions.
Insurance Company Mentioned:
Bupa
Bupa was established more than 60 years ago in the UK and is now has ten million customers in over 190 countries, and over 52,000 employees around the world. Bupa is a leading international healthcare provider, offering personal and corporate health insurance, workplace health services and health assessments. As a provident association Bupa has no shareholders, because of this it uses its profits to invest in healthcare and medical facilities around the world. Bupa has operations around the world, principally in the UK, Australia, Spain, New Zealand and the US, as well as Hong Kong, Thailand, Saudi Arabia, India, China and across Latin America.
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