Mar
3
Aegon Plots Path For Recovery
Filed Under Insurance Company, Life Insurance, USA Health Insurance | 3 Comments
Aegon, the troubled life insurer, has reported a year-on-year fall in net earnings during the fourth-quarter of 2010; earnings totaled €318 million (US$438 million) compared to €393 million (US$541 million) achieved in quarter four 2009. This represents a 19 percent decline in profitability for the 13 week reporting period, although underlying earnings before tax showed a 2 percent improvement.
The Amsterdam based insurer received a government bailout loan in 2008 to prevent its collapse – along with many other companies in the financial sector worldwide. The company has been restructuring in order to get itself into a position to repay the loan, which is now targeted for completion in June 2011.
Aegon has stated that it will issue new shares in order to raise capital to help repay the Dutch taxpayer, and is expected to issue an additional 173.6 million shares through the Amsterdam Stock Exchange – equating to approximately 10 percent of the value of the company – as part of the process for this action.
Aegon expects the share issue to generate enough funds to repay the Dutch government €750 million (US$1.2 billion) depending on the underlying stock market trading conditions.
Aegon has been struggling since the world financial markets crashed in 2007-2008 as a significant proportion of its business is conducted in the USA life insurance sector – where the life insurance market has been stagnant suffering from high levels of unemployment and a low level of growth in economic activity.
Speaking on the results, Aegon’s CEO, Alex Wynaendts, said “AEGON has delivered a strong set of results for the full year 2010. During the year, we have concentrated our efforts on executing a consistent strategy aimed at sharpening our focus on our core business, improving our risk-return profile and executing significant cost reduction programs. As a result of our efforts over the past years, Aegon is a different company today.”
As well as dealing with the tough trading conditions in recent years, Aegon has undertaken major restructuring within the group’s multinational operations including the Transamerica and World Financial Group brands.
Part of Aegon’s restructuring has been to rationalize financial exposure in the suspect economies prevalent in Greece, Ireland and Portugal. By lowering risks in such markets, Aegon has put itself in a much stronger position to meet the challenges existing in its key markets – North America, the Netherlands and the UK.
Aegon’s financial results for 2010 include a €208 million (US$285 million) write-down for elimination of activities involved with the sale of executive life insurance programs through small business outlets and banks. Aegon has also indicated that the reinsurance arm Transamerica could be sold with the proceeds being used to repay the bailout loan.
Aegon’s strategy is to focus on improving growth and earnings within the insurer’s core markets of life, pension and asset management. The Dutch insurer also plans to fully integrate its Asian business with a new management structure being put in place. Like most multinational insurers, a key element for future growth has been identified as the Asian region, with China, India and other South East Asian nations generating substantial new premium returns driven by the rapidly expanding wealth of the massive populations in these countries. Likewise the opportunities in the other region of exceptional growth – Latin America – will be exploited.
Aegon has also stated that it will continue to stabilize its US operation implementing more efficiencies and optimizing its strong reputation in this mature market. The combination of these actions is planned to deliver a resumption of dividend payments in May 2012.
Insurance Companies Mentioned:
AEGON
AEGON is present in more than 20 countries in the Americas, Europe and Asia, employing 28,000 people and serving more than 40 million customers. AEGON’s ambition is to be a global leader in helping its customers secure their financial futures and, in doing so, to grow its businesses profitably and sustainably. AEGON products include life, pensions, life reinsurance, individual savings & retirement products.
Transamerica Reinsurance
Transamerica Reinsurance is a division of Transamerica Life Insurance Company, an AEGON company. It is one of the largest life reinsurers in the U.S., offering broad capabilities in risk, capital and expense managements to help companies improve the competitiveness and profitability of their life and annuity products. Transamerica Reinsurance supplies automatic and facultative reinsurance, product consulting and development and alternative underwriting solutions to more than 500 companies in North America, Asia-Pacific, Latin America and Europe.
Feb
23
Discovery Holdings Reports Jump in 2010 Profits.
Filed Under Africa, Health Insurance, Insurance Company, Medical Insurance, USA Health Insurance | 3 Comments
South Africa’s Discovery Holdings has reported a jump in net earnings for the six month period ending on 31st December 2010 to total ZAR 941 million (US$132 million), representing a 25 percent increase on the previous six monthly period.
Normalized operating earnings in the period increased by 28 percent to ZAR 1.33 billion (US$ 186 million), excluding the one-off cost of the take-over of UK’s Standard Life Healthcare which amounted to ZAR 6 billion rand (US$223.4 million).
There was a 15 percent growth in new business to reach ZAR 3.7 billion (US$ 519 million) with embedded value up by 15 percent to total ZAR 24 billion (US$ 3.3 billion).
Speaking on the insurer’s 6 months earnings, Adrian Gore, Discovery’s Chief Executive Officer, said: “While the period under review has been complex, impacted by both the lingering effects of the financial crisis and the considerable policy debates that affect the markets in which Discovery operates, we are satisfied with the overall performance and continue to focus on providing our customers with high quality, innovative and relevant products.”
Discovery performed well in its domestic market, South Africa, with new business growing by 10 percent helping operating profits to increase from ZAR 555 million (US$ 77 million) to ZAR 619 million (US$ 86 million), reflecting a 12 percent increase over the 6 month period.
The Discovery Health Insurance business in South Africa now has 2.5 million members enrolled in private medical schemes managed by the insurer, following a 12 percent increase in numbers between June and December 2010.
Membership of the largest scheme in South African medical insurance – the Discovery Healthy Medical Scheme – grew by 10 percent, with client renewals of health policies amounting to almost 98 percent.
The Discovery Health business is working on improving access to private healthcare in South Africa for low-income sectors of the population in a bid to increase overall membership in the country.
Also, within Discovery’s domestic market, the health insurer said it remains committed to working in unison with the National Health Insurance system in South Africa which is currently in a transition period with reform implementation expected next year. The South Africa planned National Health Insurance system is being set-up in order for the country to provide universal healthcare coverage for the core population.
The Johannesburg-based insurer’s life insurance business – Discovery Life – performed well, with an increase of 14 percent over the 6 month period to generate operating profits of ZAR 768 million (US$ 107 million) up from ZAR 675 million (US$ 94 million); the growth being due to improvements in mortality and morbidity policy rates.
Discovery’s joint venture in the UK with PruHealth was boosted in 2010 with the acquisition of Standard Life Healthcare, which helped leverage its position in the UK private health insurance market. The Discovery and PruHealth insurance business covers over 674,000 lives within the UK, and is one of the major players in the private medical insurance (PMI) market in Britain; the United Kingdom operating profit for Discovery was ZAR 35 million (US$ 4.9 million) during the last six month trading period.
“The quality of the Standard Life Healthcare business surpassed our expectations, with the loss ratio, levels of lapses and profitability levels exceeding our expectation. The combination of the management action undertaken within PruHealth, and the acquisition of Standard Life Healthcare, has created a business with strong fundamental drivers of value and one that represents significant prospects for Discovery.” Mr.Gore said on the PruHealth venture.
In China’s thriving insurance sector, Discovery’s Ping An Health business received local regulatory approval from the Chinese Insurance Regulatory Commission (CIRC) to commence operating in a market which has becoming increasingly important for global health insurers. The Ping An Health venture was initiated in 2009, with the South African based insurer buying a 20 percent stake in the Chinese business.
Speaking on the Chinese health business Mr.Gore said: “From a product perspective, significant work has taken place to tailor Discovery’s capabilities to the Chinese market. We remain excited by the potential of the Chinese private health insurance market in the long-term.”
Discovery will be seeking other opportunities to enhance its global operations in the future in order to continue its planned growth and, following the announcement of Discovery’s last 6 month results, the insurer has reported that it has entered into an agreement with American insurer Humana to offer wellness and loyalty scheme programmes to 10 million of the US insurers customers. Discovery’s link will give Humama’s members the opportunity to purchase discounted gym memberships and other health incentive benefits.
Humana is the fourth largest health insurer in the USA and has agreed to invest ZAR 107 million (US$15 million) in Discovery’s Vitality Group subsidiary – a wellness programme provider. The deal means the South African group increases its exposure in the US health insurance sector, as the US health insurer seeks new opportunities for developing client incentives and the promotion of healthier living.
The Discovery and Humana partnership will see the South African insurer offering incentives for Humana’s 10 million clients to live healthier lifestyles, and comes at a time when concerns are growing about rising medical costs and the increase of chronic diseases among Americans; these factors having caused a hike in healthcare premiums within the USA health insurance market. The South African and US venture is designed to offer US clients incentives to take-up healthy activities such as regular gym work-outs to improve their long term health.
Discovery’s core health business in South Africa has been growing in recent years, mainly due to the buoyant economy driven by the burgeoning mining and agricultural sectors. With a significant proportion of the South African population enjoying middle to upper middle class status, private health insurance has expanded rapidly. Discovery offers a series of health plans under the branding of executive, comprehensive, priority, saver, core and keycare, which have helped the Johannesburg based insurer become the leading healthcare insurer in South Africa.
Insurance Companies Mentioned:
Discovery Holdings
Discovery is a financial services provider based in Johannesburg, South Africa, and was founded in 1992. Discovery offers health and life insurance in different markets as well as investment services and credit cards. They also have a joint venture life and health insurance companies with Prudential called PruHealth and PruProtect, which are structured under the PruProtection banner.
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.
Humana
Humana is based in Louisville and is one the leading US health insurers, with approximately 10.2 million medical members. Humana is a full-service benefits and well-being solutions company, offering a wide array of health, pharmacy and supplemental benefit plans for employer groups, government programs and individuals, as well as primary and workplace care through its medical centers and worksite medical facilities.
Feb
9
Specialist Insurer Beazley Reports Profits
Filed Under Insurance Company, USA Health Insurance, United Kingdom | Leave a Comment
Beazley the Dublin based insurance specialist has posted a pre-tax profit of US$250.8 million (£155.6 million:€84.7 million) for 2010. This is up from US$158.1 million (£98 million:€116.4 million) recorded in 2009, representing an increase of 59 percent for year-on-year results.
A breakdown of Beazley’s operations in 2010 shows that the insurer generated a 21.4 percent return on equity reflecting an increase from 16 percent last year. There was a 1 percent decline in gross written premiums, which totalled US$1.74 billion (£1.08 million:€1.28 million).
Beazley, a member of the Lloyd’s syndicate, highlighted the competitive pressures across all segments of the insurance business during 2010, although the insurer was able to deliver an improvement in the combined ratio from 90 to 88 percent representing a profit of US$19.2 (£12:€14.4) for every US$160 (£100:€120) from premiums obtained.
The increase in profits was partly driven by favorable foreign exchange rates – contributing US$33.7 million (£20.9 million:€24.8 million) to overall results. However, this was offset by a 57 percent fall in returns from investments as Beazley adopted a lower risk strategy to speculative trading, coupled with the impact of exceptionally low interest rates. Premiums from business renewals declined by 2 percent, but these were more than offset by skilled underwriting practices balancing the insurer’s portfolio.
Beazley’s exposure to the Chilean earthquake in February 2010 is estimated to have cost the insurer approximately US$55 million (£34.1 million:€40.5 million) to US$75 million (£46.5 million:€ 55.2 million) in claims; a figure which has been taken into account in trading results for the year.
The specialist insurer also expected to incur a loss of up to US$35 million (£21.7 million:€25.7 million) from the New Zealand earthquake disaster. However, future claims resulting from the devastating Australian floods this year are unlikely to affect Beazley.
“Our 25th year in business was distinguished by excellent profits and an enhanced underwriting result in the teeth of worsening market conditions. The expertise of our underwriters helped us achieve a combined ratio of 88%, an improvement of two percentage points over 2009. Since we began underwriting in 1986, we have achieved an unbroken track record of profitability through often turbulent market conditions. Our underwriting teams have shown they possess the skills needed to perform strongly in the current challenging environment.” said Andrew Horton, Chief Executive Officer of Beazley, when details of 2010 profits were released.
Beazley, which operates in the UK, the US, Europe and Asia, said it was looking for possible deals to augment its business in 2011 and has not ruled out a future acquisition; Beazley failed in an attempt to take-over rival Hardy Underwriting in 2010 but stressed that any future bids will only be made at the right price. Beazley’s final bid of US$290 million (£181 million:€212 million) for Hardy Underwriting was made in mid-December 2010 but was turned down by the company.
Beazley acquired Momentum Underwriting Management Limited (MUM) in 2008, which helped the company to grow its life, accident and health business delivering revenue of US$78.1 million (£48.4 million:€57.5 million) in 2010 – a figure which was better than expected.
Beazley has established a reputation as a renowned specialist insurer operating on the global stage providing cover for activities such as employment practice liability, directors and officers liabilities and risks associated with mergers and acquisitions. In addition to providing specialty insurance lines, the company provides insurance cover for conventional risks involving property, marine, life, accident and health insurance together with reinsurance products.
The USA is a pivotal market for Beazley and is a sector in which the specialist insurer has grown its presence over the years – accounting for approximately 60 percent of its current business. Business activity in Europe is also an important market for the company, with expansion through an acquisition a possibility. Likewise, Beazley has not ruled an acquisition in the Asia-Pacific region where it currently operates through a small network of outlets.
Beazley highlights the difficult trading conditions in 2010 with limited opportunities for growth. However, the insurer experienced positive returns through organic trading and the acquisition of MUM. A significant part of Beazley’s organic growth came from reinsurance and from an increase in demand for date breach insurance in the USA.
During 2011, Beazley’s expects to strengthen its life, accident and health insurance business in the USA and to strengthen its presence in the specialist insurance accident and health risk segment with the development of a team in the USA to offer simple and streamlined corporate healthcare insurance products to US companies.
Over the last two decades Beazley has increased its market share and has become a renowned specialist insurer on the global stage. As Beazley’s product range expands and its portfolio increases, with the prospect for further acquisitions, the company is well placed to continue its successful results in 2011 when trading conditions are expected to be very competitive.
Insurance Company Mentioned:
Beazley
Beazley plc, was founded in 1986 and is a specialist insurance company, provides underwriting and claims services. Beazley operates in five insurance segments: Marine, Political Risks and Contingency, Property, Reinsurance, and Specialty lines. The company has operations in Europe, the United States, Asia, and Australia.
Jan
13
US Health Insurer Aetna Signs Reinsurance Agreement
Filed Under Aetna, Health Insurance, Healthcare, USA Health Insurance | 6 Comments
Aetna has entered into a novel three-year reinsurance agreement with Vitality Re as part of the US insurer’s long-term capital management strategy.
The purpose of the reinsurance deal is to allow Aetna’s commercial health insurance unit to release retained capital in order to provide more flexibility for the expansion of operation essentially arising from developments in US health reforms.
The new agreement between Vitality Re and Aetna will allow the US health insurer to reduce its own capital base by providing collateral for US$150 million of reinsurance coverage on a portion of Aetna’s group commercial health insurance business.
The Cayman Island based company – Vitality Re – is a newly formed insurer which has released the industry’s inaugural health insurance-linked notes in a private offering in relation to the recent agreement with Aetna.
Joseph M. Zubretsky, senior executive Vice President and CFO of Aetna, said: “I am pleased to announce the successful completion of this transaction, which allows Aetna to free up capital held with respect to the covered business, and deploy it accretively for other purposes. Through this innovative transaction, we have improved our capital efficiency, enhanced our financial flexibility and reduced our weighted average cost of capital. We expect this to be the first step in a larger program.”
In addition to Aetna announcing its new reinsurance agreement, the US health insurer highlighted strategic plans for 2011 at the J.P. Morgan Healthcare Conference held in San Francisco on the 10th January 2011.
A key part of Aetna’s business plans for 2011 is to increase its presence in the Medicaid market in conjunction with the President Obama lead health reform program in the US; a major element of the US healthcare amendment being to expand the reach of healthcare coverage in the country.
Medicaid is available to certain low-income individuals and families in the US and is seen as a pivotal factor by Aetna for growth of the insurer’s activities in the future.
Medicaid is a joint US federal and state government healthcare scheme providing health insurance for low-income individuals and families in the US under the March 2010 Patient Protection and Affordable Care Act. As the US healthcare reform package begins to take effect, Aetna aims to seize the opportunity to increase the number of policyholders under the Medicaid arrangements.
Arrangements for Medicaid insurance will change in early 2014 making it more accessible to a greater pool of people in the US. From 2014, nearly all American adults under the age of 65 with an individual income under US$15,000 per year will be eligible for Medicaid in all US states. Couples, pregnant woman and people with disabilities will also be able to qualify, with the threshold level being altered to make Medicaid easier to obtain.
Health insurers in the US have experienced a steady decline in membership numbers in recent years resulting from the tough economic conditions following the near collapse of financial markets in 2008 and the resultant increase in the level of unemployment with corporate retrenchment. As the US healthcare system primarily revolved around companies providing their workforce with healthcare coverage, the vulnerability of the health insurance network in the USA – and its impact on the nation’s general health – has been exposed.
As the US health reform program starts to take shape, it is expected that an extra 30 million Americans will have access to health insurance with US health insurers, such as Aetna, competing for this market.
However, the US health reforms require insurers to comply with tighter regulations including the requirement to spend roughly 80 percent of collected premiums on direct medical care, with strict guidelines for the provision of healthcare coverage for the vulnerable population.
Aetna announced third quarter earnings amounting to US$419.6 million, covering 18.5 million members – although this reflected a decline of 74,000 in its customer base. Aetna is expected to release fourth quarter figures for 2010 in February 2011.
Aetna recently announced that it has completed the takeover of Medicity, a health information exchange technology company. The acquisition provides Aetna with information on a broad range of products and services covering health systems, hospitals, physician practices and health information exchanges. This will allow Aetna to be more efficient in the provision of patient care and reduce associated healthcare costs.
In addition to health care management services for Medicaid plans, Aetna provides a wide range of health insurance products and services including care plans for medical, pharmacy, dental, behavioural and disability conditions; it also provides group life plans. The client base includes individuals, employer groups, government units, part-time and hourly workers, labor groups and expatriates.
While Aetna, like most health insurers in the USA, has struggled in recent years to maintain, let alone generate new new clients, the proposed reforms to health insurance present US health insurers with new opportunities. Aetna’s new agreement with Vitality Re is designed to offer the health insurer more flexibility in writing new commercial health insurance in this very competitive business.
Insurance Company Mentioned:
Aetna
Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.
Jan
3
Fewer Americans Have Health Insurance
Filed Under Health Insurance, Healthcare, USA Health Insurance | 13 Comments
The economic recession in the United States is taking its toll on the healthcare of an increasing number of American citizens according to a report by the Kaiser Foundation released in December 2010.
The study found that the number of nonelderly Americans – people under 65 years of age – without health insurance in the USA rose to 50 million in 2009. This reflected an increase of 4.3 million people suffering from the absence of any form of private healthcare cover with consequential risks to general health and illness.
While most American citizens over the age of 65 are covered by the US government social insurance programme Medicare and the very poorest elements of US society covered by the means tested health scheme Medicaid, nonelderly Americans are becoming increasingly vulnerable to health related ailments as the recession impacts on employment levels and the loss of corporate healthcare insurance.
The Kaiser Foundation report titled ‘The Uninsured: A Primer’ has highlighted the affect of more Americans becoming unemployed with medical treatment needing to be paid out-of-pocket from savings or, where this is not possible, medical treatment being foregone.
While the US government-run Medicare, Medicaid and the Children’s Health Insurance Program (CHIP) provide health protection for the elderly, young and the very poorest elements of American society, the increase in the number of people outside current state funded healthcare coverage is causing serious concern. The report estimates that 19 percent of nonelderly Americans were uninsured in 2009 covering all ages, ethnicities and income groups in the country; 33 percent of the 19 to 29 age group carried no health insurance. The report highlighted that low income groups were faced with heightened risks of being uninsured, particularly those people just above the defined poverty level.
The report found that as more Americans become uninsured a steep decline in the healthcare services provided has occurred, with uninsured people in the US being less likely to seek basic medical care, including preventive treatment. This is leading to more serious health issues which ultimately result in hospitalization. In the event of an uninsured American needing to seek medical treatment or healthcare services, the financial burden can lead to high medical debts placing further pressures on a person’s state of health. The study found that 27 percent of uninsured adults in the US had to use their personal savings to pay for private medical bills.
The American Journal of Public Health reported an alarming static in 2009, with 45,000 Americans dying annually due to the lack of healthcare coverage. The study which was conducted by Harvard University found uninsured Americans are 40 percent more likely to die compared to their American counterparts with insurance.
Some of the issues identified will be improved by the implementation of the President Obama-driven Patient Protection and Affordable Care Act which was enacted on the 23rd March 2010 . Under this US healthcare reform package, Medicaid will be expanded in 2014 to reach more Americans under the age of 65 and compel those individuals with the ability to fund their own healthcare insurance to do so. As an interim measure, some reforms to previous healthcare arrangements were brought in to force on the 21st September 2010, including rebates for prescription drugs, new rules being applied to insurance companies and tax credits for small firms introducing health insurance schemes for employees.
The rapid increase in the number of American citizens without healthcare coverage in recent years is fundamentally down to tough economic conditions, which has driven up unemployment and contributed to a decline in employer-sponsored health coverage. Health insurance through an employer in the US made up approximately half the private healthcare coverage in the country, but as companies shed jobs, many Americans have lost full time employment and the resultant alternative of part-time or casual employment has not offered continuation of company health insurance schemes.
The publishers of The Uninsured: A Primer, the Kaiser Commission on Medicaid and the Uninsured, was established in 1991 in Washington DC. Its primary role is to provide information on healthcare coverage and access for the low-income demographics of the United States, with particular focus on Medicaid’s role and coverage of the uninsured members of society in the country. The recent study has focused attention on the sharp increase in the number of Americans without any form of healthcare coverage in the country, driven by the tough economic conditions and growing unemployment levels.
The rold of the Medicaid programme is to help Americans who are unable to meet medical care bills through a US government sponsored health insurance scheme, but Medicaid is only available to people with limited income or specific age criteria.
Although reforms of the US healthcare system is underway, many American are left in a precarious situation regarding medical treatment which is likely to get worse if economic conditions do not improve in the near future. Even if employment levels improve, it is thought likely that employers may withhold health benefits until the underlying financial conditions stabilize in the USA, meaning more Americans will need to rely of the reform of the US healthcare system to provide them with some form of healthcare provision.
If an American person is uninsured for healthcare treatment but receives treatment for which they are unable to pay in full, costs will be paid through resources from federal, state and private funds. The US government will pay the majority of the medical costs, which is crucial to support the US hospital and clinic safety net. Although the US healthcare reform is set to improve healthcare coverage for a significant proportion of American citizens, it is predicted the improvements will still leave 23 million people in the country without affordable health coverage by 2019. This means that the current healthcare financing system provided by the US government will continue to provide a pivotal role for uninsured Americans.
Dec
14
US Study: Low Compliance of Mammogram Screening Among Insured Women
Filed Under Health Insurance, Healthcare, USA Health Insurance, Uncategorized | 7 Comments
Breast cancer is the most common form of cancer among women, accounting for around 16 percent of all female cancers. It kills around 519,000 women every year, worldwide.
A recent US study, conducted by the Medco Research Institute, reveals that only half of insured women aged over 40 are claiming annual mammogram screenings, despite recommendations endorsed across the US and the world.
The Medco Research Institute is an evidence based clinical research organization that branch from the US privately owned pharmacy manager, Medco Health Solutions.
Health organizations worldwide, such as the US National Cancer Institute, agree that women aged 40 years and older should have screening mammograms every 1 to 2 years. The US National Cancer Institute states that age is the most important risk factor for breast cancer among women. Women aged 50 years or older will typically have the highest rates of breast cancer within a population.
The Medco Research Institute aimed to identify the prevalence of annual mammograms among women aged 40 years and over. This was achieved by calculating the number of annual mammogram claims between 2006 to 2009 among insured women. Data was collected using administrative records retrieved from Medco’s integrated database.
More than 1.5 million women qualified for the study. The target population were of females, aged 40 years and over with continuous insurance coverage between 2006 and 2009. Women with a previous history of breast cancer were excluded from the study, including those who had either a mastectomy, chemotherapy or radiotherapy.
Results indicated a low compliance of mammogram screening across the study group. Only a small group of women in the study achieved the recommended annual mammogram screening at 16 percent among the 40 to 49 age group, and 23 percent among the 50 to 64 age group. It was shown that approximately 50 percent of women aged over 40 received annual mammograms over the four year study. However, only 40 percent of women aged over 50 years received the recommended minimum of 2 mammograms during the study period. 78 percent of the entire study group received at least one mammogram over the four years.
The term mammogram screening refers to the routine check up among women, who are symptom free, for early detection of breast cancer. A breast cancer tumor, in its early stages, is likely to be small and confined to the breast, and undetectable by self examination. A mammogram is an X-ray picture of the breast that is able to pick up abnormal breast tissue including tiny mineral deposits of calcification, or a mass, which may be a tumor or a cyst. Any abnormal findings are referred for further investigations to determine whether they are cancerous. The size of the breast cancer tumor and how far it has spread are among the important factors used to predict the patient’s prognosis. Mammogram screening has therefore been regarded as a highly important early detection tool so that treatment can be started early, possibly before it has progressed and spread to other areas.
The cost for a mammogram screening varies from facility to facility, however the cost is typically between US$80 and $150, but can also be priced over US$200 at certain medical institutions. Women in the US who are eligible for Medicare coverage are entitled to an annual mammogram screening when they reach 40 years of age. Both the UK and Australian Governments offer free mammogram screening programs through the NHS Breast Cancer Screening Plan and BreastScreen Australia. UK women aged 50 years and over are offered a scan every three years, whereas Australian women aged 40 years and over are offered a scan every two years. The cost of mammogram screening in the UK is around GBP$45 or US$71, lower in comparison to US costs.
As part of Obama’s Health Reform, disease prevention is promoted through the Affordable Care Act, by improving access to clinical preventive services including mammogram screening. From 2014, all US citizens will be required to have private health insurance or otherwise pay an annual fine. Under the Affordable Care Act, insurance plans beginning on or after 23rd September 2010, must cover a range of preventative services, with no cost sharing by the patient. Prior to this law, insurance companies were able to share the costs and some patients were paying a gap fee between US$10 and $35.
Given the implementation of the US Health Reform, a larger number of women will be taking out health insurance from 2014 and will therefore have access to free annual mammogram screening services. Whether there will be a low compliance of mammogram screening among newly-insured women is yet to be determined. However, it is probable that newly-insured individuals will be seeking primary care services more than ever before, given the cost of healthcare was a major barrier prior to the reform.
Mammogram screening programs are a topic of recent debate in the media. A recent study, published in the New England Journal of Medicine, compares the rate of death from breast cancer among two groups; one who had mammogram screening and one without. Women aged between 50 and 69, living in Norway, were analysed over a period of ten years from 1996 to 2005. Data gained from the 40,000 women who had developed breast cancer, concluded that routine mammograms cut the breast cancer death rate by only 10 percent. An interview with the Norwegian researchers revealed that they were expecting at least a 30 percent reduction.
The US National Cancer Institute also lists the possible harms of mammogram screening, found through a meta-analysis of individual data from seven randomized controlled trials. The US National Cancer Institute revealed mammogram screening may lead to treatment of insignificant cancers resulting in over diagnosis. Mammograms can also be misleading due to false-positive and false-negative testing. Furthermore, the risk of radiation-induced mutations resulting in breast cancer are increased, especially among the younger population. However, it is important to note that the US National Cancer Institute concluded that mammogram screening is beneficial to women, resulting in decreased morbidity relating to early detection of breast cancer.
Although the Medco Research Institute revealed some interesting figures in it’s study, many questions are left unanswered. The study was restrictive in its findings, using quantitative methods there is little we can conclude without investigating the participant’s reasoning and attitudes towards the compliance of mammogram screening. It is possible that the study will be used as a pilot in preparation for an in depth case study; however, at this stage there is no indication of a further investigation. Reasons why women decide against mammogram screening are suggested in various media sources and can vary from discomfort during the screening exam, controversial debate as to whether mammogram screening is valuable, access to facilities, or breast screening awareness.
Further research needs to be conducted in order to find out the specific reasons as to why there is a low compliance of mammogram screening among insured women in the US. It remains to be seen whether this number will increase given the addition of newly-insured women that we expect to see in 2014, following implementation of the US Reform that will make health insurance compulsory. With new insurance laws, health preventative measures are becoming more accessible to the public, whether or not the public complies is another issue.
Dec
3
Insurance in the US Post Reform
Filed Under Aetna, CIGNA, Health Insurance, USA Health Insurance, Uncategorized | 17 Comments
The US Health Reform law mandates that by 2014, US citizens must have health insurance coverage or otherwise pay a hefty US$695 annual fine. It is estimated that the Health Reform will reduce the number of the uninsured from 19% of US citizens in 2010 to 8% by 2016.
The Health Reform law imposes new regulations and fees on insurers, and although it expands coverage to the millions of uninsured Americans, it also puts considerable pressure on insurance company profits. In the meantime US insurers are looking at new opportunities among other consumer markets in order to secure their continued growth.
A large number of US citizens are currently uninsured. Under the Health Reform law, health insurance coverage will be expanded to the millions of uninsured Americans, aiming for better access to healthcare for all citizens across the country. A recent study, conducted by the Centers for Disease Control and Prevention (CDC) indicated that during the first quarter of 2010, around 59.1 million people in the US had no health insurance, for at least part of the preceding 12 months. This compares to 56.4 million uninsured in 2008, says the CDC. The study also found that the majority of uninsured were adults, aged between 18 and 64.
Health insurance in the US is usually provided by employers or through an employed family member’s dependent coverage. However, employment is no guarantee of coverage. Due to financial pressures fueled by the recession, employers are having to cut back in costs including employee’s insurance coverage. Between January and March 2009, over 1 million employees lost their health insurance coverage. A study performed by the National Opinion Research Center (NORC) at the University of Chicago, found the proportion of workers in New York with employer-sponsered health insurance had fallen to 58%, compared to 69% in 2001. Further to this, unemployment has risen from 8.5 percent in March last year to nearly 10 percent this year. With the increasing unemployment rate in the US, the numbers of the insured has in turn dropped.
As well as increasing the number of insured individuals, the Health Reform will also affect the way US insurers do business. With new reform laws, insurance companies are barred from refusing coverage to individuals with pre-existing conditions. This law currently applies to children in the US and will come in to effect for adults in 2014. This means that US insurers will have less freedom over which market of individuals they insure, no longer being able to cherry pick their members. This will result in a larger proportion of high risk policy holders, among their population of members. Further to this, insurers are no longer allowed lifetime limits on coverage, taking away cost-cutting measures that insurers are likely to use on policy holders with chronic conditions. Needless to say, overall insurers will be spending more, post Health Reform.
With increasing numbers of Americans taking out health insurance policies, insurance companies will be anticipating a large number of new customers. This surge of new customers will also mean a rise in spending on claims, medications and other reimbursements associated under policy schemes. Newly-insured individuals will also be seeking primary care more than ever, given the cost of healthcare was a major barrier prior to the reform. We can therefore expect US insurers to use this increase to rationalise higher premiums, however this increase will not recover the profit loss that is likely to occur.
In order to enable US individuals more affordable access to the highly expensive medications in the US, the Health Reform also enforces insurers to cover 50 percent of prescription costs. The cost of prescription drugs in the US are by far the highest among developed nations. Given the pharmaceutical industry is the most profitable business in the country, with high consumers of expensive prescription drugs, this Health Reform law will also further impact insurers.
The new laws under the Health Reform undoubtedly put US insurers in an unfavorable situation, having less control over who they insure and putting a considerable dent in their profits. Insurance companies are therefore having to look elsewhere to recover the loss of profit that is expected in years to come.
A small market has open for insurance companies to target retirees who are no longer insured by the their employer, but are also not old enough to be eligible for the Medicare system that covers seniors over the age of 65. However, is this a profitable market for insurers – considering the age-related health expenses that are likely to be incurred?
What we can expect to see is an international expansion of US insurers, moving their market to overseas consumers in order to continue and secure growth and profit. A larger, more profitable market exists among overseas consumers who can afford private health insurance, beyond what their Government’s healthcare system can provide. While Aetna and Cigna Corp primarily offer health insurance through large employers in the US, they are among the US leading insurers who view international markets as an appealing post-reform option.
Cigna’s CEO David Cordani, is currently investing in products sold to individuals that supplement Government healthcare. Cordani recently said the company is seeing new opportunities for international growth as the company establishes potential markets in India and Turkey. Cordani anticipates this international growth will extend into Asia as well as Europe, the Middle East, and Latin America. As well as Cigna, Aetna is also investing in products such as these.
Mark Bertolini, new CEO of Aetna said recently, “We can’t stay where we are. We have to move. We have to change. Aetna views international markets as an enticing post-reform option. Health insurers sell expatriate coverage to multinational companies that are increasingly globalizing. A rising middle class of overseas consumers who can afford insurance products beyond what their governments offer provides another avenue for international growth”.
It will take years until we know exactly what affect the Health Reform will have on the US healthcare system and insurance market as it is today. US citizens will be taking out more health insurance coverage and there will be a large influx of patients seeking primary care, given that healthcare will be more accessable. While what we can expect among US insurers, is a move towards a more profitable, healthier market of international consumers.
Insurance Companies Mentioned:
Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.
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
25
New CEO Named for Aetna
Filed Under Aetna, Insurance Company, USA Health Insurance | 2 Comments
Aetna Inc., the third-largest health insurer in the US, has announced that its Chairman and current Chief Executive Officer, Ronald A. Williams, will be succeeded by the end of November 2010 by Mark T. Bertolini, current President of Aetna. Mr. Williams intends to retire, and will stay on as executive chairman until April 2011, when this role will also be assumed by Mr. Bertolini.
Mr. Williams, 60, who joined Aetna in 2001 and became its CEO in 2006, brought the company back to profitability twice over the past 10 years, when revenue from premiums failed to match medical costs. The insurer managed to lower medical costs through the introduction of insurance plans with higher deductibles, a move in which Mr. Williams played an instrumental role.
Mr. Bertolini, 54, joined Aetna from Cigna Corp. at the beginning of 2003 and was appointed as President in 2007. Mr. Bertolini was Senior Vice-President for national sales at Cigna from 2000 to 2002, after he served as Executive Vice-President at NYLCare Health Plans Inc., a health insurer bought by Aetna in 1998.
According to analysts, one of the initial challenges for Mr. Bertolini in his new role as CEO will be to articulate how Aetna will conquer the challenges posed by the recently-passed healthcare law, something that in the view of industry observers, their close competitors have already made known their respective plans. It is anticipated that Mr. Bertolini will announce the strategic plans of Aetna for diversification of revenue sources.
After the retirement of Mr. Williams becomes effective in April 2011, he will continue being a consultant for Aetna, advising on matters of public policy and federal regulatory strategy until February 2012.
Insurance Company mentioned:
Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.
Sep
28
New US Healthcare Reform Laws Now in Force
Filed Under Health Insurance, Healthcare, Insurance Company, Medical Insurance, USA Health Insurance | 3 Comments
After the passage of the Affordable Care Act six months ago in the United States, the first raft of new healthcare rules have come into effect, as of Thursday, September 23rd 2010.
While much of the healthcare law has yet to impact the US Healthcare landscape, what has gone into effect on Thursday 23rd are important consumer protection laws known as the Patient’s Bill of Rights. These provisions tend to either prevent US domestic insurance companies from engaging in certain practices, or grant additional rights to patients and insured persons.
One of the more important provisions that have come into effect is the fact that children may stay on their parent’s health insurance plan until the age of 26. Young people in America are a demographic that has high numbers of uninsured individuals, with up to one third of young Americans having no health insurance. The new provision applies to all health insurance plans, allowing parents the choice of whether to keep the children on their health plan until their 26th birthday. However, for employer-based insurance plans, children will only be extended this benefit if they are ineligible for their own employer-based coverage.
In another child related provision, American insurance companies are no longer allowed to either deny coverage to children with pre-existing medical conditions or limit the benefits offered to them, except in the cases of insurance plans that are ‘grandfathered’ in. Currently this provision covers children up to the age of 19, although in 2014, this provision extends to cover Americans of all ages.
Insurers in the United States are also no longer allowed to place lifetime limits on health insurance plans. Some policies in the domestic US insurance market come with coverage limits, whereby once treatment costs reach a certain ceiling, coverage by the insurer is ceased leaving the insured unprotected when they need it most. There were approximately 100 million Americans with insurance plans that had lifetime coverage limits in place, however these limits are now prohibited on all health insurance policies.
Another type of coverage limit placed on plans are annual limits, whereby once an insurer pays out for enough claims to hit the ceiling, the insurer will no longer pay out during that year. While less prevalent than lifetime limits, annual limits are still used by about 14% of small employer plans and 19% of individual plans on the US market. Under the new provisions in force, annual limits will be phased out over the next three years, except for individual plans that are ‘grandfathered’ in. For insurance plan years starting on or after September 23rd, 2010, the annual limit must maintain a bare minimum of US$ 750,000 (EUR 559,800). During the second year, the minimum annual limit is raised to US$ 1.25 million (EUR 932,800), and in the third year annual limit minimum must be at least US$ 2 million (EUR 1.49 million) before all annual limits are banned in 2014.
Also made illegal is the practice where insurers may retroactively cancel your insurance coverage, also known as rescission, for a variety of potential reasons. For all health insurance plans, insurance companies are no longer able to lawfully rescind your insurance coverage, unless it is in the case of fraud or intentional misrepresentation of facts.
Furthermore, anyone buying a new insurance policy is now protected by a number of consumer-friendly provisions in the law. One of these provisions that Americans should be taking advantage of to stay healthy is that insurers must now cover Level A and Level B preventative care, without deductibles, co-insurance or co-payments. This includes immunizations, mammograms, colonoscopies, pre-natal checks and new baby care, to try and encourage Americans to be proactive about keeping themselves healthy, or at least catching serious illnesses early.
The new laws also guarantee the insured the right to both an internal and external appeal over denied claims. Previously, if an insurer declined to either cover a treatment or pay out a claim, in many cases there would be an internal mechanism within the insurance company to appeal the denial of treatment or claim payment, dubious as that might seem. The provisions now guarantee that all new insurance plans must have an internal appeal mechanism, and are now prevented from denying coverage without an opportunity for an external appeal to an independent third party.
People purchasing health insurance plans will now be able to pick their own doctor, which has previously been difficult on occasion due to American health insurance provider networks. One survey reported that three of every four obstetrics and gynecology specialists (OB/GYN) said that patients had to return to their primary physician to be referred back for follow up care. The laws now in force ensure that policyholders have the right to choose their primary physician, the right to choose a pediatrician for their child’s primary care, as well as granting women the right to see an OB/GYN specialist without a referral.
Another provision which affects in-network versus out-of-network issues is that health insurance plans will not be able to make the insured pay more in cost-sharing methods for getting emergency treatment at an out of network hospital. Prior to this law coming into effect, an individual would have to pay excessively higher costs for emergency care that happened outside of their insurance company’s healthcare provider network, making an accident while away from home potentially financially devastating. Insured individuals now have the ability to receive emergency care at out-of-network healthcare providers, while being charged in-network prices.
All of these provisions are now in effect, as of Thursday, 23rd September, 2010, meaning that Americans now have much greater protections and clarifications of their rights in regards to their health insurance policies. However, this is only a small part of the Affordable Care Act which is coming into force and there will be some new developments in early 2011, and more changes to the healthcare landscape within the next four years, so it is always advisable to ensure you remain informed.
Sep
22
AIGs Japanese Insurance Business Targeted By Prudential Financial
Filed Under AIG, China, Insurance Company, Life Insurance, USA Health Insurance | 5 Comments
Early reports indicate that Pudential Financial Incorporated is nearing a US$4-5 billion (EUR 3-3.8 billion) deal to take over two Japanese Life insurers from the American International Group Inc (AIG).
Japanese life insurance companies AIG Edision Life Insurance Co and AIG Star Life Insurance Co have been highlighted as possible acquisition targets for the Prudential Financial Incorporated in a deal which could generate up to US$5 billion (EUR 3.8 billion) for AIG. If concluded, the sale would provide a significant contribution towards repaying the US$182.3 billion (EUR 137.3 billion) AIG owes to US taxpayers for the bailout of the company in 2008 following the global collapse of financial markets. Along with other financial institutions, which received government bailouts, AIG received US$182.3 billion (EUR 137.3 billion) from the US government resulting in the company being nearly 80% owned by the US taxpayer.
Prudential is the second-biggest U.S. life insurer and has been present in the Japanese insurance market for more than twenty years. It has been looking to further strengthen their presence in this market following the takeover of bankrupted Yamato Life Insurance Co in May 2009 – which subsequently changed its name to Prudential Financial Japan Life Insurance. If Prudential do acquire the two Japanese life insurers, it will mean that they will increase their presence in the Japanese life insurance market and will utilize their considerable expertise in this industry.
Rumours have been circulating about the potential sale of AIG’s two Japanese life insurance businesses as the US based company looks to create capital to repay the US government loan. Prudential Financial Inc has emerged as the front runner for the acquisition after suspected initial talks stalled earlier this year.
A buyer of the either of the Japanese life insurance companies would obtain a well established Japanese life insurance business. AIG Star Life Insurance Co Ltd provides life insurance coverage and retirement pension plans to individuals and group policyholders. AIG Edison Life Insurance operates as a subsidiary for American International Reinsurance Company Ltd providing life insurance services in Japan, with customers that include large corporations, unions and government agencies. If a takeover does go-ahead, it will see Prudential Financial Japan Life Insurance increasing their reach and life insurance product range in Japan.
AIG has been busy retrenching since the world financial crises took hold, while other rival insurers have been pursuing global expansion by re-positioning and entering new operating channels, as global financial markets stabilise and opportunities for restructuring emerge.
Earlier this year, AIG saw a potential deal worth US$2.15 billion (EUR 1.6 billion) blocked by the Financial Supervisory Commission (FSC) of Taiwan for the sale of the life insurance unit of AIF Taiwan by Primus Financial Holdings Ltd and China Strategic Holdings on the grounds of violation of investment regulations.
Recently American International Insurance (AIA), the Asian arm of AIG, entered into an agreement with Industrial and Commercial Bank of China (ICBC) to form a bancassurance partnership in China to develop a network for sales, marketing, telemarketing and wealth protection services in a deal which will strengthen AIG’s network in this fast growing economy.
There are also early reports that AIG Group Ltd has received approval to list Asian life insurance business American International Assurance (AIA) on the Hong Kong Stock Exchange (HKEX), which could generate up to US$15 million (EUR 11.3 million) from IPOs (Initial public offerings). AIG has progressed to the floatation on the HKEX after the collapse of the US$35.5 billion (EUR 26.7 billion) deal with Prudential earlier this year, which would have seen the British insurer acquiring AIA from AIG. AIG has sought numerous avenues to generate capital to pay back the Group’s US$182.3 billion (EUR 137.3 billion) debt to the US taxpayer after the government bailout in 2008.
In June 2010, the Life Insurance Association of Japan (LIAJ) reported that there were 47 life insurance companies operating in Japan with the main firms being: AIRIO, Midori, Lifenet, SBI AXA Life, Japan Post (Kampo), Hartford Life, ALICO Japan, ING, Manulife, AIG Edison and AIG Star. The Japanese insurance market experienced a premium decline of roughly 58% in 2008, although, in 2006, the total premium income generated in this market amounted to US$363 billion (EUR 273.2 billion) – which was nearly one-sixth of the total world life insurance premium income for the year. The Japanese life insurance market is now facing stiff competition from China and Indian markets; Japan has the oldest age profile population in the world and a declining young population, which has lead to a fall in life insurance customers.
Insurance Companies Mentioned:
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
AIG Star Life Insurance
AIG Star Life Insurance Co. Ltd. is involved in providing life insurance coverage and retirement pension plans to the individual and group policyholders.
AIG Edison Life Insurance
AIG Edison Life Insurance Company provides life insurance services in Japan. AIG Edison Life Insurance has 8,000 sales agents and 17 bancassurance partners in Japan. The company is also providing new distribution channels for AIG which includes, corporation, unions and government agencies
AIA
AIA is a Hong Kong-based life insurance company doing business across Asia that has been in business since 1919. They service over 20 million policies through 23,000 employees and 300,000 agents throughout markets in Asia, including; Vietnam, Thailand, Taiwan, South Korea, Singapore, Philippines, New Zealand, Malaysia, Macau, Indonesia, India, Hong Kong, Mainland China, Brunei and Australia.
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