Dec

23

Bupa International Rolls Out Full Medical Underwriting Options

Filed Under BUPA, DKV, Expat Insurance, Health Insurance, IHI Bupa, IHI Danmark, Insurance Company, International Healthcare, Medical Insurance | 5 Comments

In December, Bupa International joined the ranks of international private medical insurers that offer insurance policies with full medical underwriting (FMU) options that cover individuals for pre-existing conditions.

Until recently, it has been very difficult for expatriates to obtain coverage of pre-existing conditions on individual insurance policies, as few insurers would cover them. Many group policies may be underwritten with medical history disregarded once the group is sizable enough, however customers seeking individual coverage are often left with little choice but to take up policies that either exclude coverage of any pre-existing conditions or policies which will provide coverage after a moratorium.

Bupa International will now offer customers the ability to apply for full medical underwriting when enrolling in the Worldwide Health Options product, an option that would provide coverage of a list of over 60 pre-existing medical conditions the customer may already have.

Although the list of pre-existing conditions already includes cancer, high cholesterol, hypertension and asthma among others, Bupa International’s Medical Director Dr. Sneh Khemka has said that Bupa will hope to include cardiovascular conditions and diabetes in the list in the near future. One eventual aim is to work towards setting up a system where brokers could add the premium loading themselves in clear-cut cases, in order to streamline the process.

However, Bupa International is hardly the first to pioneer international health insurance products with full medical underwriting, with companies such as DKV Globality, InterGlobal and ihi Bupa already having earned names for themselves as providers which are more flexible in covering pre-existing conditions. While InterGlobal has been offering cover for pre-existing coverage in January 2010, DKV Globality has been extending individual customers that option since 2008 leveraging its access to Munich Re’s knowledge, group expertise and scale.

The Group Underwriting Director and InterGlobal, Barry Remington, said that “It has been welcomed by the market and is an excellent means for expats to have certainty that they will be covered for pre-existing conditions which may have become excluded if they had a reoccurrence of their condition under a moratorium scheme.”

Despite the fact that ihi Bupa, previously IHI Danmark, already offered FMU options prior to being purchased by Bupa in 2005, Bupa International decided not to emulate the product in its lineup due to the fact that their IT systems and medical technology were insufficient at the time. Another reason for keeping FMU products distinct was the fact that each appealed to different markets, with Bupa International finding traction in European markets and ihi Bupa performing similarly in Asian Markets.

As one of the largest international medical insurance providers, the announcement that Bupa International will introduce full medical underwriting options could cause a change in the landscape of the international PMI industry, potentially forcing competing major insurance companies to begin offering similar products.

Insurance Companies Mentioned:

Bupa International

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.

DKV Globality

DKV Globality is a leading international health insurer with a special focus on expatriates, i.e. people working or studying abroad. Global companies and their expatriate staff as well as individuals and their families place their trust in DKV Globality’s expertise. The company stands for more than 80 years’ experience in health insurance and the proven competence of an international network of assistance and service partners. It is a member of Munich Health with more than 5,000 experts at 26 locations worldwide, providing its clients and partners around the world with innovative healthcare solutions. DKV Globality is a subsidiary of Munich Re, offering the financial strength and security of one of the world’s leading (re)insurers.

ihi Bupa

Originally dubbed IHI Danmark, the company has 30 years of history as an innovative international health insurer. The company was purchased by Bupa in 2005, and became a branch in 2009 beginning to operate under the banner of ihi Bupa.

InterGlobal

InterGlobal is an international health insurance company offering international private medical insurance to expatriates, frequently traveling business people and companies around the world. InterGlobal was founded in the UK in 1998 as a joint venture company between the UK-based Inter Group and New Zealand-based Mike Henry Group. Since their founding, InterGlobal has expanded to the point where it now handles policies for clients in more than 189 countries around the globe, operating from 10 regional offices in the UK, Singapore, Kuwait, China, Dubai, Thailand, Japan, South Africa, Qatar and Vietnam.

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 insurance company 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 insurance company, 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 multinational healthcare insurance company, 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 multinational insurance company 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

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

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

21

Critical Success Factors to Indian Health Insurance

Filed Under China insurance, Expat Insurance, Health Insurance, Healthcare, Medical Insurance | 9 Comments

In recent years India has become one of the fastest growing countries in the world. At present, there is a high demand for health insurance in India; this is driven primarily by the growing percentage of middle class citizens in the country, and the types of illnesses or diseases associated with their lifestyle. As India sees the wide scale emergence of illnesses predominantly associated with developed nations, the costs associated with healthcare in the country have started to increase. The disparity in Indian healthcare provision has also been highlighted by the development of privately funded Start-up hospital chains catering specifically to upper-middle class residents of the country. As India further develops over the next 5 years the growth of the country’s medical industry, in addition to the increased levels of lifestyle related illnesses will further increase demand for quality healthcare services, and consequently health insurance, in the urban areas of India.

The growth of the Indian economy, together with the increase of lifestyle associated illnesses has seen the cost associated with healthcare increase dramatically in the last decade. As a consequence of this Indian health insurance premiums have grown by an estimated 40% in the last 10 years as insurance providers seek to cover their risk. The Indian Government, together with non-governmental organisations and insurers, have recognised the need for quality low-cost healthcare and are jointly launching several different schemes to offer lower cost health insurance to all residents in India. Some of the insurers include General Insurance Corporation of India (GIC), National Insurance Company, Oriental Insurance Company, New India Assurance Company and United India Insurance Company.

Although the health sector in India continues to grow at a fast pace, it has not yet achieved its highest potential, as there are a few internal factors limiting widespread implementation of quality medical services throughout the country as a whole. First, the general public is unaware of the insurance products available to them and which products are best suited to address their needs. Moreover, they have the general perception that the claim and settlement procedures are so complicated that this has frightened the potential consumers from purchasing health insurance. The health insurance providers are also facing challenges due to high claims ratios. The deficiency in the availability of accurate consumer profile data and illness patterns have limited the insurance providers in coming up with optimal product pricing, as well as stunting the development of any new desirable products for the intended target group.

The tax-free policy in general insurance currently in place has failed to attract the interest of the majority population in purchasing health insurance. The core problem to the situation lies in the lack of new product ideas and designs. In the current marketplace Indian health insurance providers mainly offer customers traditional protection type insurance policies; in some cases there is the possibility of obtaining minimal extended coverage options, which are largely considered to be innovative when looking at the industry within India. When one talks about innovation on insurance products in India, it normally only refers to slight adjustments on the product features and charges, such as options to include dental coverage or to include daily cash benefits for hospitalisation to name a few.

In order to expand the health insurance market in India, the Insurance Regulatory and Development Authority (IRDA) can carry out a few radical changes; one option is to consider subsidising universal healthcare in order to help reducing individual’s spending on emergency, as well as day-to-day, medical treatments.

In mature markets around the globe, such as Europe and North America, it has been proven that product innovation within the health insurance industry is a key success factor. Gartner (an analyst firm) has noticed that insurers have placed a large portion of their investment towards improving their product development abilities and coming up with new innovative products. Recent international innovations include taking into consideration the product requirements of different potential customers, as well as reviewing and establishing the product life cycle strategies accordingly. Other alternative strategies such as managed care organisations (MCOs) and health savings accounts (HSA) have also proven to be successful in managing medical costs, as well as improving healthcare standards and quality.

Comparatively, China also faces similar challenges as India. There seems to be a shift in the China operation model. The “old” operation model focused more on protection and customer service, whereas the “new” operation model is more client oriented as it offers additional value-added services to its customers. In terms of products, China health insurance is now moving towards placing more weight on offering health protection plans to clients rather than just merely offering basic medical care plans.

The insurers in China have only recently included managed-care type of products in their portfolio. With their limited experience with these types of products, they are still trying to sort out the issues in terms of product design, claims handling and operations. To differentiate themselves from other competitors in the market and create a competitive advantage, the insurers in China have identified that offering managed care products is the approach they need to follow in the years to come.

In 1986, India introduced Mediclaim, a list of multi-tiered long term insurance products, designed to close the gap in their product portfolio. This product is required to develop further in order to differentiate from the long term insurance products offered by other health insurers. Other products available in the market are health savings account type products offered by non-life and life insurance companies in the public sector. Unfortunately, due to limited coverage of these insurance products, they are not very popular in the market.

The Indian health insurance market is unique; it has a number of specific requirements and challenges of its own. It is the hope that insurers, by learning lessons from the more experienced counterparts in the market, will eventually develop their own new set of competencies and abilities such as insight on buyer behaviour, rationalising product development and taking advantage of technology to differentiate themselves from competitors by offering tailor-made services. In order to be successful in the Indian insurance market, it is one of the top priorities that insurers develop innovative products for their potential customers and have an execution plan and strategy to serve the market efficiently and effectively.

Dec

20

EU Extends Support for Philippine Healthcare Program

Filed Under Healthcare, Philippines | 1 Comment

The Philippines Department of Health (DoH) and the EU have reached an agreement over the Philippine Health Sector Policy Support Program (HSPSP), with the EU having contributed a further € 36 million (US$ 47.8 million:PhP 2.12 billion) towards the second phase of the program on 17th December 2010. The focus of the second phase of the Health Sector Policy Support Program (HSPSP) is to try and ensure universal access to healthcare for all members of the population, especially disadvantaged members of society.

The second phase of the HSPSP will be overseen by the DoH working closely with other entities such as the provincial and municipal governments in the Philippines, which have the responsibility for delivering primary healthcare services in the country. The funding will enable further work to be undertaken and extend the benefits achieved under phase one of the scheme, while recognizing that considerable improvements to the access for fundamental healthcare is still required for the poorer members of society in this highly populated country.

The HSPSP is coupled with the Aquino Administration’s Health Sector Reform Agenda, with a combined focus on developing local healthcare systems and the reform of the hospital and health regulatory systems in the country. The strategy includes meeting Millennium Development Goals in respect to maternal and child health. Implementation of phase one of the HSPSP will be completed by the Philippine DoH by December 2010.

The second phase of EU funding will be used over two years to implement operational measures included in the Philippine healthcare reform proposals aimed at improving delivery of the Philippine state-run health services. The €36 million (US$47.8 million:PhP 2.12 billion) grant from EU funds follows their previous grant of €36 million (US$47.8 million:PhP2.12 billion) in 2006 and is part of the EU’s continuous support for the HSPSP in a bid to improve access to healthcare for the poor and disadvantaged population of the country.

A fundamental purpose of the HSPSP is to address the inequalities which exist in the Philippine public healthcare system, with phase two building on the lessons learned in phase one.

The Philippine DoH initially adopted the Health Sector Reform Agenda (HSRA) in 1999 as part of a major government policy action to address inequalities in the country’s healthcare system. In 2005, the HSRA adopted a program called FOURmula One for Health (F1) 2005-2010, which formed part of the HSRA’s framework to speed-up progress with the public healthcare reforms in order to eradicate the large scale divides between income levels and the urban and rural populations of the country. Since 2005, the approach to healthcare reform in the Philippines has gained momentum, with international bodies such as the World Health Organization (WHO) and UN backing the Philippines health project.

Although the Philippine healthcare sector has improved over the last decade, it still lags behind many of its Asian peers, especially in maternal mortality rates, which remain a health issue in the country.

Part of HSPSP reform agenda will be to address the challenges the Philippine healthcare sector has experienced in respect of financing and delivery of health services in the country. The proposals now allow for the devolution of responsibilities to local levels of government in an effort to achieve the prime objective of the program which is to improve inequalities and cut out inefficiencies which have existed in the Philippines healthcare system. These actions will strive to ensure all Filipino’s have fair and adequate healthcare coverage for curative and preventive services and achieve the overall goal of the Health Sector Development Project (HSDP) which is to improve the health status of the population.

The Philippines are taking a progressive approach to the healthcare reform process in the country by adopting a pro-active policy, with clear targets to eliminate shortcomings in the healthcare sector with valuable help from EU funding.

Dec

17

Potential in the Microinsurance Market

Filed Under Africa, China, Income Protection, Life Insurance | 5 Comments

The global microinsurance market is estimated to be worth US$40 billion to the insurance industry according to a report by Zurich based Swiss Reinsurance.

Swiss Re has highlighted the huge potential in supplying the massive populations in countries in the emerging markets of Asia, Latin America and Africa, with low cost insurance products. The report identifies the scope to expand the range of products, which could be made available to low-income groups in these continents.

The historic reason for the under-development of insurance products to low income segments in emerging market economies has been the inability to find commercial solutions to the supply of products for this market. However, the Swiss Re report estimates that there are approximately 2.6 billion people worldwide – living on US$1.25 to US$4 a day – requiring low cost insurance protection, which could be made available on a commercial basis; the potential earnings from this market is estimated to be US$33 billion.

Additionally, it is estimated that a market – totalling 1.4 billion people and US$7 billion in premium value – exists to supply insurance to individuals living on less than US$1.25 per day, with help from government support / international aid.

The author of the new sigma study, Amit Kalra, said: “For insurers, microinsurance creates an opportunity to tap into new markets and build a strong brand value that can be used for selling conventional insurance products in the future.”

The largely untapped microinsuance market provides global insurers with new opportunities to grow, and create a new source of premium income driven by the volume of sales involved. With the global economic conditions remaining challenging for multinational insurers – partly stemming from the demands in the mature insurance markets in Europe and Northern America being static – insurers recognize the opportunities presented with access to under-developed insurance markets.

The economies in Asian countries such as China, India and Indonesia have been able to buck the global trend of low growth by strengthening economic activity, and represent the optimum potential for microinsurance; the populations in China and India top 2.6 billion people.

In addition to the immediate commercial benefits mircoinsurance provides for insurers, there would potentially be longer term scope for business growth as new customers become accustomed to the benefits of insurance protection and saving schemes and expand the purchase of new products.

Amit Kalra said: ”The Asia-Pacific region is the fastest growing and the largest microinsurance market. Microinsurance has also grown considerably in African and Latin American countries despite these being relatively smaller microinsurance markets at present.”

The largest selling segment in the micronisurance market currently is credit life – a mortality cover coupled with a mircrocredit element. However, the need for better quality and a broader choice of insurance protection – to meet demand in the agricultural, saving, life and health microinsurance market – is recognized.

There are challenges in the microinsurance market needing to be overcome before the sector can fully develop, with clearer regulatory standards and improved infrastructure to be installed. There is also inadequate historical information surrounding risks and claims insurers may face in these new markets.

Multinational insurers embarking on the provision of microinsurance are faced with the challenge of establishing strong local partnership to distribute micro products and suitable channels for policyholders to make claims. Insurers also need to take into account the cultural element of local communities to ensure services and products meet the specific requirements of potential policyholders.

In July this year, the China Insurance Regulatory Commission (CIRC) reported that the world’s largest insurer by market value – China Life Insurance – had written nearly 4 million microinsurance policies, generating US$20.2 billion. China Life recently received regulatory approval by the CIRC to expand its microinsurance business in rural regions of China, which include Jiangsu, Hunan, Tibet, Zhejiang and Xinjiang – helping the insurer towards its goal of generating US$38 million in microinsurance premium income in 2010.

Allianz, one the world’s largest insurers, has been active in the microinsurance market for years and operates in countries such as India, Indonesia, Colombia, Egypt, Senegal and Cameroon. Allianz Indonesia has set a target this year to achieve 1 million policyholders by 2012. In India – Allianz’s largest microinsurance market – the insurer offers savings, property, life and health micro products and expects the market to continue to grow.

Non Government Organizations (NGOs), governments and local communities have been working on programmes across regions of the world where vulnerable communities and individuals require protection for their livelihood and well-being. Organizations such as the International Finance Corporation (IFC) recently committed US$4.1 million in grants for mircoinsurance in Eastern Africa. With the Swiss Re report highlighting the potential benefits of mircoinsurance on a commercial basis, insurers have the opportunity to develop policies to meet the protection needs of the more venerable element of the world’s population.

The fundamental basis for microinsurance to work for the insurer is a high volume of policyholders, coupled with low cost margins. Also, insurers will benefit from working with local partners with close ties to local institutions and communities to help mircoinsurance providers to establish a market presence.

Insurance Companies Mentioned:

Swiss Re

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.

China Life Insurance

China Life Insurance Company Limited (China Life) is a People’s Republic of China-based life insurance company. The products and services include individual life insurance, group life insurance, accident and health insurance. The Company operates in four business segments: individual life insurance business, group life insurance business, short-term insurance business, and corporate and other business.

Dec

16

Merger Increases Bangkok Dusit Medical Services (BGH) Hospital Network in Thailand

Filed Under Health Insurance, Healthcare, International Healthcare | 11 Comments

Thailand’s hospital operator Bangkok Dusit Medical Services (BGH) has announced that it is to merge with the Health Network Group, which operates the Phyathai Hospital group and the Paolo Memorial Hospital group. The move is part of Bangkok Dusit’s move to expand its healthcare coverage in Thailand and Asia.

The proposed merger provides Bangkok Dusit with an additional 8 hospitals from the Health Network Group. This will consist of 4 hospitals currently operated by Phyathai Hospitals and 4 hospitals from the Paolo Memorial Hospital group – for approximately US$315 million. The deal will be comprised of cash payments and the issuing of new shares.

The acquisition is expected to be completed by the second quarter of 2011 and will add the 8 healthcare facilities to Bangkok Dusit’s existing network of 19 hospitals, bringing the Thai hospital operators network to 27 with a 20,000 a-day outpatient capacity when the merger is completed.

“The merger will reemphasize BGH’s leadership as the leading private hospital operator and will enable us to expand our patient portfolio to cover a wider demographic of Thai patients, foreign patients, and social security patients… We expect that our leading position in Thailand will enhance our capabilities to become a leading regional player as part of our plan to prepare ourselves for the competition as a result of the ASEAN Economic Community (AEC) agreements that includes liberalization of many sectors including the private healthcare sector,” said Dr. Prasert Prasarttong-Osoth, Group CEO & President of Bangkok Dusit Medical Services.

Earlier this year, Bangkok Dusit acquired ANB Laboratories (ANB) for US$27 million to expand into the pharmacy and medical laboratory business. This move by Bangkok Dusit was its first step into its non-core front-line medical business activities, with the takeover of ANB providing access to the Thai medicine and pharmaceutical manufacturing and distribution market.

BGH’s current client base is predominately foreign patients seeking treatment as part of the medical tourism industry and the more affluent local population seeking high quality private healthcare services through the Thai or Cambodian network chain. The acquisition of the 8 hospitals from the Phyathai Hospital and Paolo Memorial Hospital groups will enable BGH to capture a proportion of the Thai middle and lower income healthcare market, broadening their range of clients.

In addition to the high-income earners and foreign nationals seeking medical treatment within Thailand’s established private healthcare system, there is a growing middle income class in the country, creating a new client target for Thai healthcare providers. The expanding middle-class population across Asia is becoming more influential as the private healthcare industry aims to capitalize on the growing demand for a higher standard of medical treatment.

BGH has established a reputation as a key player in the medical tourism industry catering for foreign patients seeking private healthcare treatment – and is one of the original private healthcare providers in Thailand and the Asian region involved in competing in the lucrative private healthcare market.

Thailand was one the first countries to realize the potential in the medical tourism market and, after Singapore, lead the creation of a niche market for this medical sector. Asian countries have now established a strong reputation as a prime destination for relatively low cost medical treatment, with prominent private healthcare providers – including Bangkok Dusit hospitals Samitivej and BNH in the capital Bangkok – competing with market leaders Bumrumgrad in the Thai and Asian medical tourism industry.

The private medical market in Asia has become increasingly competitive, with India, Singapore and Malaysia, in addition to Thailand, being key destinations for medical tourism. Other Asian countries such as the Philippines and Taiwan have also emerged more recently as providers for medical tourism, which is predicted to be worth approximately US$100 billion in the short to medium-term; the regional leaders – India – reported that the healthcare market was worth US$38 billion in 2009.

Earlier in 2010, there was a fierce bidding war between Malaysia’s Khazanah and India’s Fortis Healthcare for Asia’s largest hospital group Parkway; Khazanah emerged the winner with a US$3.3 billion offer.

The medical tourism industry has developed in Asia, with Hong Kong and Singapore being the original providers. India has now become the market leader in Asia as it can offer a broader range of products for a fraction of the price of homeland treatment in European, USA, Middle Eastern and Japanese healthcare facilities. The attraction of Asia for medical treatment reflects the provision of quality facilities in exotic locations, with minimal waiting times for procedures at affordable prices.

As an example of cost comparisons, a heart by-pass operation in the USA is likely to cost a patient US$130,000 whereas the same procedure in Thailand would be approximately US$11,000, while in India it could be as little as US$10,000.

Other cost comparisons (shown in US$) – bottom end figures for treatment in Asia versus higher figures for USA for typical medical procedures – are:

Medical Procedure	Thailand	USA	India	Singapore
Heart Bypass	11000	130000	10000	18500
Heart Valve Replacement	10000	160000	9000	12500
Angioplasty	13000	57000	11000	13000
Hip Replacement	12000	43000	9000	12000
Hysterectomy	4500	20000	3000	6000
Knee Replacement	10000	40000	8500	13000
Spinal Fusion	7000	62000	5500	9000

As western hemisphere countries are faced with austerity measures, healthcare reforms, increasing medical costs and longer waiting periods for treatments, the alternative Asian equivalent offers Americans, Europeans, the Japanese and patients from wealthy Middle Eastern countries a desirable option for obtaining medical treatment – where capable, affordable and efficient healthcare facilities have been established.

Although the medical tourism industry in Asia has developed and evolved, some barriers still remain in terms of language particularly when complicated procedures are involved, but this issue is being addressed.

As BGH expands its customer base following the new merger to cater for market opportunities in Thailand, the optimism in the Asian medical tourism industry is for USA insurers to offer patients the opportunity to receive treatment from Asian private healthcare rather than US counterparts as a cost saving measure.

Asia is expecting the expansion of the private medical market to continue with healthcare providers enhancing positions across the region.

According to KGI Securities, there were 1.5 million medical tourists visiting Thailand in 2007, with forecasters estimating that by the end of 2010 the figure will be in the region 2 million medical visitors. Overall the medical tourism industry is set to boom in the coming years, with Asian nations leading the provision of services and, in this respect, BGH will be well placed to maximize opportunities.

Companies mentioned:

Bangkok Dusit Medical Services

Bangkok Dusit Medical Services was founded in 1969 and the Bangkok hospital started its operation in 1972. Bangkok Dusit Medical Services operates a private hospital network in Bangkok, other Thai provinces and in Cambodia. The Group’s private healthcare facilities include Samitivej hospital and BNH hospital.

Bumrungrad International

The Group’s principal activities are owning and operating hospitals. Its flagship hospital, Bumrungrad International, is a renowned medical centre attracting over 1 million patients annually and named one of the world’s top ten international hospitals by Newsweek International. The Company also owns a businesses in real estate and anti-aging and functional medicine.

Parkway Holdings Limited

Parkway Holdings Limited, is one of the region’s leading providers of healthcare services, with a network of 16 hospitals with more than 3,400 beds throughout Asia, including Singapore, Malaysia, Brunei, India and China.

Fortis Healthcare Limited

Fortis Healthcare Limited is a healthcare provider having a network of 28 hospitals, satellite centers and heart command centers with nearly 3,300 beds capacity.

Khazanah Nasional

Khazanah Nasional is the investment holding arm of the Government of Malaysia and is empowered as the Government’s strategic investor in new industries and markets.

Dec

15

UK’s National Health Service Required to Save Billions

Filed Under Healthcare, United Kingdom | 7 Comments

The British Government is asking for massive budget cuts in the wake of recently enacted austerity measures; as part of these measures the government, led by Prime Minister David Cameron, has called on the National Health Service (NHS) to become more efficient, in addition to providing more value-for-money. As a consequence the NHS is set to be tested to the limit, as the Government demands that the British Public Healthcare sector slash £20 billion (US$32 billion) in costs by 2015; an amount which equates to cost reductions of 4 percent per year.

The austerity measures, and drive for efficiency savings, are the largest ever seen in the United Kingdom. This has left the NHS in the challenging position of making drastic spending cuts while retaining current levels of services. Local Authority provided Social Services are also being affected along with public healthcare services, and both entities have been charged with delivering noticeable improvements in the quality of their services in certain problem areas.

The nation’s Health Select Committee – appointed by the House of Commons – is entrusted with the examination of health policies, administration, and expenditure by the Department of Health, and the Committee’s associated bodies have been in charge of the spending review covering the NHS and social service departments. The Select Committee recognized that the UK public healthcare sector is being set a significant challenge. The level of savings required is estimated at 4 percent per year – a level which has never been achieved by the NHS since its inception in 1948.

There has been no attempt to achieve efficiency gains of this magnitude within a national healthcare system anywhere in the world previously. The unprecedented measures being adopted by the UK’s Government have been criticized for being unclear and lacking significant information on how the quality of healthcare services will maintained, while achieving the financial cuts sought – although the need to maintain or improve standards of care is still necessary. It is seen as vital for the NHS to maintain the established standard of care provided to British nationals, but the government demand for improved financial management of the system is seen to be of paramount importance to the overall expenditure cuts being implemented in the country.

The NHS has already put in place measures to become more cost effective, with savings being found by reducing the length of patients stays in NHS hospitals, reducing hospital infection rates, and by cutting the number of unscheduled attendances at Accident & Emergency (A&E) departments. As government ministers and local authorities set out budgets in order to achieve the savings sought for the NHS and social services, there is recognition that the UK private healthcare sector may be able to benefit from the government’s plans for cost reductions in state funded healthcare.

According to research carried out by Laing and Buisson – an analyst and research company specializing in the independent healthcare sector in the UK – private hospitals increased the amount of medical procedures carried out for the NHS in 2008/9 despite the impact of the recession in the UK. Revenue from private hospitals within the country increased by 3.5 percent, to £421 million (US$673 million) for the year. The Laing and Buisson report highlighted that patients using private healthcare facilities funded by the NHS, under the waiting-list criteria, dramatically increased between 2008-2009 when 212,000 NHS patients were dealt with in this way; this accounted for 22 percent of private hospital treatments compared to 6.3 percent in 2007.

The recession in the UK dented the demand for private medical cover in 2009, with Laing and Buisson reporting that as the UK economy struggled there was a decline of 4.8 percent in private medical insurance and medical schemes funded by employers. At the start of 2010, there were 7,238,000 people holding British private medical insurance and self-insured medical expense schemes, representing 11.7 percent of the UK population.

Although the UK private healthcare sector has been vulnerable to the financial cutbacks by companies, and lower levels of personal disposable income, the reform of the NHS is likely to present increased opportunities for the private healthcare sector.

However, the private healthcare market in the UK – which is estimated to be worth £5.5 billion per year – is set for a review by the Office of Fair Trading (OFT). The OFT said that it will examine the nature of the market, in addition to the competition and the effectiveness of healthcare provision for private patients. The OFT highlighted that the private healthcare sector in the country is growing in importance as proposed NHS reforms are implemented, the demands from an ageing population increase and the overall need for better medical outcomes.

Sonya Branch, OFT Senior Director of Services and Public Markets said: ”We are keen to establish whether patients and buyers of private healthcare services, including the NHS, are getting the full benefit of choice and competition.”

The private medical insurance sector in the UK is dominated by Bupa, AXA PPP, PruHealth and Aviva.

The leading providers of hospital care in the independent UK healthcare sector include Netcare’s General Healthcare Group, Spire Healthcare, Hospital Corporation of America (HCA), Ramsay Health Care and Nuffield Health. There is the possibility that new independent hospital providers make seek to enter the market and meet demand from NHS patients.

UK independent hospitals could face a potential dilemma resulting from being called upon to provide more services under NHS conditions in the future. While the benefits from generating more business would be self evident, the attractiveness to privately funded patients may lose its appeal if it is seen that equivalent treatment can be obtained under state funding.

While the private medical insurance sector in the UK has declined with the impact of austerity measures following the global financial crisis in 2007-08, the measures being adopted to reform the public health system could result in an increase in demand for private medical insurance.

Companies Mentioned:

General Healthcare Group

General Healthcare Group (GHG) is leading health care services provider in the UK. GHG primary focus is treating private patients, while maintaining our position as a dynamic partner of the NHS. GHG has a network of 67 hospitals and treatment centres across the UK

Ramsay Health Care

Ramsay Health Care was established in 1964 and has grown to become a global hospital group operating over 100 hospitals and day surgery facilities across Australia, the United Kingdom, Indonesia and France.

Spire Healthcare

Spire Healthcare’s mission is to be the best private provider of quality healthcare. Spire Healthcare has 26 year heritage in the private healthcare sector.

The Hospital Corporation of America (HCA)

The Hospital Corporation of America (HCA) is the largest private operator of healthcare facilities in the world. HCA operates some 170 acute care, psychiatric, and rehabilitation hospitals in the worldwide.

Bupa

AXA PPP

Aviva

PruHealth

Dec

14

Allianz Asia Pacific Confirm Appointment of New CEO

Filed Under Allianz, Insurance Company | 2 Comments

Allianz Asia Pacific has announced the appointment of Kamesh Goyal as Chief Executive Officer of the Asian region; he will be based in Singapore. Kamesh Goyal will move from his current post as the Allianz Country Manager for India and MD & CEO Bajaj Allianz Life Insurance; in addition to his new role he will continue as Allianz Country Manager for India.

Kamesh Goyal became Chief Operating Officer (COO) of Bajaj Allianz General Insurance in 2001 changing rolls in 2004 to CEO, and was later appointed as Country Manager, MD and CEO of Bajaj Allianz Life Insurance in 2007; he originally joined Allianz in 1999.

The insurer has also confirmed that the current COO of Bajaj Allianz Life Insurance – Mr Varghese Philip – will take up the role of CEO in February 2011. This appointment is subject to final approval from the Insurance Regulatory and Development Authority (IRDA) – India’s insurance regulator. Varghese Philip also joined Allianz in 1999 and took part in Allianz’s Indian joint venture with Bajaj when it was first established in 2001.

The current regional CEO for Allianz Asia Pacific – Bruce Bowers – will take up the role of CEO Central and Eastern Europe, Middle East and the North Africa Region (CEEMA) for Allianz; the change will take effect in February 2011. Bruce Bowers succeeds Manuel Bauer, who becomes a member of the Board of Management of Allianz – as announced earlier in the year. Bruce Bowers has more than 30 years experience in the life and general insurance industry, holding a variety of CEO positions within the Allianz Group in the last 10 years.

Allianz is one the world’s largest insurers, providing insurance products and services which include life, health, property and casualty cover for individual clients and corporate businesses. Allianz is a German based financial institution, with approximately 100 subsidiary and affiliated operations sustaining the insurer’s global reach.

Allianz recently released its global results for the third quarter 2010, with the German insurer generating a 2.3 percent increase in operating profit – uplifting profit for this period from €2 billion (US$ 2.6 billion) to € 2.1 billion (US$ 2.8 billion).

Indian based Bajaj Allianz is one the leading private life and general insurers in India. Bajaj Allianz is a joint venture between Allianz and local Indian insurer Bajaj Finserv Limited. Since Bajaj Allianz’s inception in 2001, the Indian based insurer has generated a presence in approximately 1100 locations throughout the country.

Bajaj Allianz is currently in a strong position within the Indian insurance market, which is forecast to grow significantly as the Indian economy continues to expand. The demand for life, saving and healthcare products is set to increase in-line with improving individual financial prosperity.

The Bajaj Allianz product range includes home, motor, travel, business, life and health insurance. The private healthcare sector in India in particular is set to grow substantially as insurers design products to meet emerging health demands for a country with a population in excess of 2 billion people. Other major players in the Indian health sector such as Star Heath & Allied Insurance, Appollo Munich Health and the newly formed MaxBupa will provide Bajaj Allianz with tough competition.

Over the last five years Allianz has performed robustly in growth markets, with Allianz’s Asian operations reporting sound results. Business in Central and Eastern Europe and the Middle East is also reported to have performed well. Allianz state that premiums from the life and health sectors have been the driving force for income generation during 2010 and there are approximately 30 million Allianz customers located in growth markets in Asia and the CEEMA region. Since the global financial crisis, which started in 2007-2008, Allianz’s Asian operations have emerged as the pivotal basis for business growth, with the German insurer recording an average growth in gross written premiums of 24.4 percent between 2005 and 2010 in the the region.

All management changes are subject to approval of the respective regulatory authorities.

Insurance Company Mentioned:

Allianz

Dec

14

US Study: Low Compliance of Mammogram Screening Among Insured Women

Filed Under Health Insurance, Healthcare, Uncategorized, USA Health Insurance | 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

13

Developing Nations Struggle to Control Healthcare-Associated Infections

Filed Under Healthcare, International Healthcare | 4 Comments

A World Health Organization (WHO) lead research project has highlighted the struggle developing nations are facing in the fight against healthcare-associated infections.

A report on the subject is based on the analysis of 220 previous cases studies, which compared the position in poorer nations to the USA and found that infection rates were three times higher in developing nations.

The Lancet released the findings of the study into infections rates while patients were receiving healthcare and highlighted the fact that the problem has been largely overlooked in the less developed nations.

Research found that healthcare associated infections such as hospital obtained pneumonia, surgical site infections, urinary tract and bloodstream infections where among major health problems within poorer nation’s hospitals; the contraction of malaria and tuberculosis were also being obscured.

Information for the report was obtained from relevant data collected between 1995 and 2008. The data pooled details contained in electronic databases, relevant medical articles and full or partial information supplied by developing countries.

The data covering 13 years worth of research found healthcare-associated infection rates within developing countries was 15.5 per 100 patients, while in the USA it was 4.5 and Europe 7.1 per 100 patients.

There was also an alarming difference in the rate of infections obtained during intensive care within developing countries, which was reported at 47.9 infections per 1000 patient-days compared to the USA where there are 13.6 infections per 1000 patient days.

The problem primarily stems from the limited resources available in developing countries, which contribute to major safety concerns for patients receiving treatment in hospitals. The report calls for improved surveillance and a better understanding of the severity of the health issues; the report highlights the urgent need for the problem to be addressed often by adopting simple low cost measures.

Contracting a hospital-associated infection can lead to an extensive stay in a hospital, increase the risk of an individual becoming resistant to vital medication, long-term disability and, in extreme circumstances, death. In addition to the direct health concerns, a prolonged stay in hospitals will drive-up healthcare bills leading to higher financial obligations for national economies in a state funded facilities or to the patients who are required to pay for healthcare services out of pocket.

The overall number of people affected by healthcare-associated infections is difficult to identify precisely due to insufficient data being available in developing nations. While developed nations are able to install critical surveillance systems, middle and low income nations have been unable to establish sophisticated tools to monitor this healthcare problem.

Health factors surrounding risks of healthcare-associated infections include inadequate medical equipment, poor infrastructure, lack of medical professionals, overcrowding in hospitals, unsafe methods, poor guidelines and unhygienic procedures. All these elements can contribute to a patient contracting an infection while receiving treatment in a hospital, while many infections are capable of being remedied through the adoption of simple, affordable measures.

Dr Benedetta Allegranzi, Technical Lead for the Clean Care is Safer Care programme at the WHO and author of the study said: “Healthcare-associated infections have long been established as the biggest cause of avoidable harm and unnecessary death in the health systems of high income countries. We now know that the situation in developing countries is even worse. There, levels of health care-associated infection are at least twice as high.”

Commenting on resources Dr Benedetta Allegranzi said: “One in three patients having surgery in some settings with limited resources becomes infected. Solutions exist, and the time to act is now. The cost of delay is even more lives tragically lost.”

Wealthy countries have a much lower level of healthcare-associated infection rates due to the long-term development of healthcare facilities, processes for measuring infection rates and pressure groups to minimize the impact of illness from this source. On the other hand, developing countries face more of a challenge in handling this issue, but medical

professionals cite it is not impossible to minimize risks from healthcare-associated infections in future with simple and low-cost measures.

Author of The Lancet study, and Head of the Collaborating Centre on Patient Safety at the University of Geneva Hospitals, Professor Didier Pitted said: “The number of healthcare-associated infections should be much lower in high-income countries, because we know what works and we have the means to act. Low- and middle-income countries face many more challenges, but this does not mean the problem is insurmountable. Several interventions are simple and low-cost.”

The current burden of healthcare-associated infections on developing nation’s healthcare systems is a major problem which can be eradicated, but has proven to be a challenge for the low and middle income nations – partially through a lack of expertise and partly through lack of suitable guidelines being present in these countries. Experts believe the issues of healthcare-associated infections can be rectified by developing countries following low-cost and simple measures to prevent pathogen transmissions occurring in hospitals; this would include establishing effective steps covering basic hygiene, surveillance procedures, education and infection control processes.

Dec

10

Asia Key for Future Aegon Growth

Filed Under Insurance Company, Life Insurance | 1 Comment

The Dutch life insurer Aegon has announced plans to restructure its organization with strengthening of its Asian and US operations. Alex Wynaendts – Aegon’s global Chief Executive – set out plans for key changes in the group’s management structure at a recent investor conference.

As part of the strategy, Aegon has created a new Chief Executive position to cover the Asian region, with the appointment of the experienced Douglas Henck taking up the specially created role of Chief Executive Aegon Asia. Douglas Henck has spent over 25 years in international insurance, with a specific focus on Asia, and will start his new position early next year.

In the past Aegon has managed its Asian business operations from the USA, but will now establish an Asian headquarters in Hong Kong. The decision to set-up a regional Asian base is designed to capitalize of the group’s expertise in the provision of leverage products for life insurance, pensions and asset management, with the overall aim of capturing cost efficiencies and growth of business in the Asian region.

Aegon, the owner of the Transamerica Corporation which was bailed out following the worldwide financial crises in 2007/ 2008, is to improve and strengthen Asian and US business activities to capture a larger slice of the regional markets in the life, pension and asset management sectors.

In the United States, Aegon is setting its sights on growing its market share in the US life and protection industry, while taking measures to cut out less profitable existing operations.

Aegon emphasized that declining interest rates in the US are likely to adversely impact on 2011 earnings and, in order to combat this effect, intends to cut its workforce in the USA by 5 percent.

In addition to job cuts, Aegon said it will discontinue the selling of new executive non-qualified benefit plans and the associated life insurance business.

Talking about the future, Alex Wynaendts Aegon’s global CEO said “The steps we are taking are aimed at sharpening our focus on the clear opportunities for our core business, implementing significant cost efficiencies in the United States, Europe and in Asia for the benefit of our customers, business partners and shareholders.”

Cost cutting is also planned for the UK life and pension business in order to increase the company’s return on capital. As in the US, the UK financial and insurance markets have struggled to achieve growth in the last few years.

Aegon said that resulting job cuts will cost US$80 million, with US$60 million being deducted from fourth quarter earnings in 2010 and the remaining balance factored into 2011 earnings.

There is a suggestion that the Aegon reinsurance unit – Transamerica – could be sold to repay funds provided as part of the bail-out package.

Asia, especially China and India, has become the prime focus for global insurers seeking markets with higher potential financial returns and better opportunities for growth.

Aegon is following in the footsteps of many global insurers and financial institutions by focusing on expanding markets – especially the Asian region. Asia has emerged from the worldwide banking crisis three years ago as a rapidly expanding growth market, with China and India predominately leading the charge in the world’s economic recovery. Aegon will be looking to optimize opportunities in Asia, with the implementation of its new organizational structure.

The Dutch government was called upon to rescue Aegon in 2008 at the height of the financial crisis, with the Dutch insurer currently working towards a plan to repay the European Union Commission for the bailout. Aegon reported net income of US$872 million for the third quarter of 2010, a significant improvement compared to the US$ 192 million generated during the same quarter in 2009.

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.

Dec

10

New Prenatal Genetic Test Developed

Filed Under Health Insurance, Healthcare, Hong Kong | 5 Comments

Researchers at the Chinese University of Hong Kong announced on Wednesday the discovery of a new form of non-invasive genetic screening for unborn children. This test, which builds on previous research, differs from currently available prenatal screening technologies in that it does not require amniotic fluid samples. Traditional methods of prenatal genetic screening, known as Amniocentesis, have required the womb of the mother to be pierced in order to retrieve genetic samples, which carried a risk to the child.

The new screening method, announced on Wednesday November 9 2010, only requires a blood sample from the mother. This major breakthrough is based on the discovery that foetal genes comprise approximately 10 percent of a mother’s blood plasma, meaning that there is now no need to risk the health of the baby, or induce stress on the mother, by directly piercing the womb.

Once a blood sample has been obtained the researchers use a super computer to analyze the genetic sequence of the child in order to determine if there is any risk of a hereditary disease or congenital birth defect. In a field trial, researchers from the university took a sample from a pregnant woman at the Sha Tin Prince of Wales Hospital and found the results to be exactly the same as if they had sampled the amniotic fluid in the mother’s womb – the child was a thalassemia carrier, but did not suffer from the condition.

Researchers were quick to point out that the test was, for the most part, undeveloped; commercial applications of the screening may be some time away. Due to the nature of the study, and that fact the test was developed for research purposes, the new method of screening currently costs US$ 200,000 per sample. However, according to the lead researcher, Professor Lo Yuk-Ming, the likelihood of a decrease in cost was high; in his view the blood screening method of prenatal genetic testing could cost approximately US$ 2,000 in as little as 5 years time.

Professor Lo Yuk-Ming stated that the drop in cost would be attributable to smarter sampling methods. Currently the researchers test the entire genome of the child which contributes to the high price tag, but by focusing on the genetic predispositions of the population in question the test could be made to focus on a few specific genes where the probability of a genetic risk is high. While the new test can screen for all genetic conditions only 5 to 10 defects would be looked at in the future. For the Hong Kong population the professor cited concerns such as degenerative muscle disease, thalassemia, and Pompe disease as some of the primary concerns to be looked at in future trials.

However, even with the lowered price tag of US$ 2,000 in the future, the new test will still be three times as expensive as the current Amniocentesis method, which currently costs US$ 512 per sample in Hong Kong hospitals. Professor Lo stated that the costs associated with the test, even at their lowered level, would be out of reach for most Public Hospital users in Hong Kong, and that it would take around a decade for the new test to replace current genetic screening methods.

In the view of global medical inflation it is likely that the costs associated with prenatal genetic testing will remain high, but it remains to be seen whether international insurance providers will cover this type of proactive screening as a maternity insurance policy standard. Currently, only a limited number of insurance providers will cover Amniocentesis under their plans, for the most part this coverage is limited to women over 35 where the screening is deemed to be medically necessary (i.e. there is a heightened risk of genetic defects for the child) – this coverage is by no means universal within the industry.

The development of a safer, non invasive, prenatal genetic screening test is only the latest in a number of developments within the field of medical technology. With the news that a daily dose of aspirin can prevent cancer, and the development of a new drug to combat HIV/Aids, medical researchers continue to extend their fight against illness in the 21^st century.

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.

Dec

9

Venezuela Government Audits the Private Healthcare System

Filed Under Health Insurance, Healthcare, Uncategorized | 8 Comments

Venezuela’s private health system is currently undergoing an audit after allegations surfaced that insurance companies, and private health service providers, are putting their profit before the health of its members.

The audit will be carried out by Venezuela’s Public Defender´s Office, Institute for the Defense of People’s Access to Goods and Services (INDEPABIS), and the Venezuelan Superintendent of Insurance Activity.

The audit will evaluate the private health sector following implementation of the Insurance Activity Law in July this year. As part of the audit, 40 clinics in metropolitan Caracas will be inspected, as well as the availability of a 24 hour phone line for patients to report feedback on Venezuelan insurance and private health related services.

The private health system is a fairly new industry in Venezuela. Privatization of health care was introduced by the Government in the 1990s due to deterioration of public health system. Since then, the private sector has grown considerably in Venezuela with around 42 per cent of the population covered by some form of private health insurance. The public health system has been neglected and as a result individuals, who can afford it, seek private healthcare.

The Insurance Activity Law, enforced by The National Assembly of the Venezuela Government, has issued regulations on insurers in order to improve the system and increase coverage in the country. The new law addresses issues such as social exclusion in private health insurance and protection of consumer’s rights.

Insurance companies are concerned that the new law will affect the health insurance industry in that the system will eventually collapse. Further to this, a confidential US Embassy cable released by Wikileaks blames Venezuela’s President Chavez for the country’s ongoing healthcare crisis, revealing his intention to nationalise private health institutions. Although the healthcare system was in crisis prior to the election of Chavez, according to the embassy cable, due to mismanagement the system has further deteriorated under his rule. With the release of the US Embassy Cable as a part of the greater “cablegate” story analysts are now suggesting that the audit of the Venezuelan healthcare system may have ulterior motives, pointing to the past acts of President Chavez and his nationalization of a number of critical industries.

During the 1980s, Venezuela was recognised as having the leading healthcare system within South America. The healthcare system was funded entirely by the Government, providing full subsidence of health care services within the country. However in the 1990′s Venezuela’s healthcare system deteriorated rapidly. Government healthcare funding, under President Caldera, had significantly dropped. At the time, the country was experiencing an inflation crisis and low oil prices resulting in spending cuts; cuts which included healthcare funding which eventually lead to privatisation of the health system.

By the mid 1990’s it was increasingly evident that the Venezuelan healthcare system needed some form of overhaul. In 2003, under President Chavez, Mission Barrio Adentro was created following an agreement with Cuba. This health reform, translating to ‘Mission inside the neighborhood’, improved access to healthcare resources by building thousands of medical clinics across the country, staffed with adequately trained medical professionals employed from Cuba. In the meantime, the private health sector continued to grow.

With the deterioration of Venezuela’s public healthcare system, the private health sector has become the main source of adequate healthcare within the country. A lack of Government healthcare funding has seen underpaid medical staff quit their positions at public healthcare institutions, in addition to a drastic reduction in the number of essential medical supplies available in the country, which has lead to the permanent closure of many public hospitals in Venezuela. As a consequence of these events, and the overall reduction of public healthcare services, there has been an increased reliance on the private healthcare sector in Venezuela. In turn this has put consumers in a vulnerable position, resulting in the allegations of abuse within the country’s healthcare system.

As with the rest of the world, private healthcare services are very expensive in Venezuela. However, due to the stagnation of the public system there have been allegations within the country that the private medical sector may be unduly profiting due to the situation. In certain instances the Venezuelan government has accused insurance companies of rejecting claims with no legal grounds, or making it difficult for patients to receive their entitlements. There are reports that health insurers have declined instant approval of emergency cases, although the Chamber of Insurers of Venezuela (CAV) has denied these allegations. Last month the Venezuelian Government forcefully nationalized La Previsora, the country’s leading health insurance provider, due to their alleged involvement with three banks that violated banking regulations.

Under the Insurance Activity Law, the Venezuelian Government is enforcing regulations on insurers to increase coverage across the population. Pre-existing conditions and acquired illnesses must be covered by Venezuelan insurers. This coverage will also extend to seniors, those on pensions or retired, individuals with a disability, to people with physical or mental illnesses, as well as coverage to those who earn less than 25 tax units per month (US$ 377). The Government will also control the regulation of premium increases and emergency cases in private health facilities will be treated straight away.

The Insurance Activity Law reflects similar changes that are occurring in the United States, given the introduction of the US Health Reform implemented this year. With similar principles, the new insurance laws make it easier for citizens to obtain private health insurance coverage with the aim to reduce the financial burden on the Government.

The deterioration and quality of public healthcare services is likely to continue if the Venezuelan Government does not provide adequate investment into the healthcare sector. Growth of private insurance coverage will increase across the country and there will be a greater ease of access to insurance entitlements. Whether or not the Insurance Activity Law will be detrimental on the Venezuela health insurance industry is yet to be determined.

Dec

8

Daily Dose of Aspirin Can Lower Risk of Cancer

Filed Under Uncategorized | 2 Comments

The results of a major study undertaken by UK-based universities, the Kumamato University in Japan and the London School of Hygiene and Tropical Diseases into the scope for prevention of cancers were released on the 7th of December 2010.

Research has revealed that a regular small daily dose of aspirin can dramatically reduce the death rate from a broad range of cancers.

The research conducted provided evidence that low doses of aspirin taken on a daily basis over a five year period can cut fatalities by between 10 and 60 percent depending on the type of cancer being suffered.

The Lancet published findings of the study carried out at Oxford, Edinburgh and Dundee Universities in the UK, the Kumamato University in Japan and the London School of Hygiene which involved 25,570 patients. The findings indicated that a dose of 75mg of aspirin taken each day can cut cancer deaths by as much as a fifth.

The study undertaken over several years – averaging a four year period – found that aspirin lowered the risk of death from cancer by as much as 25 percent and produced a reduction of 10 percent in deaths of patients who took regular doses of aspirin compared to those participants who did not take aspirin. Patients participating in the studied were tested for between 4 to 8 years.

Among the types of cancer included in the findings, aspirin reduced deaths from bowel cancer by 40 percent, lung cancer by 30 percent and prostate cancer by 10 percent. The results suggest that overall the risk of death from cancer could fall by 20 percent over a 20 year period.

The findings for stomach, brain and pancreatic cancers were inconclusive due to the numbers of deaths recorded over the study period. Also, because there were only a small number of women taking part in the trials, the effectiveness of aspirin on the mortality rate of such cancers as ovarian and breast cancer could not be concluded due to a lack of data recorded. Further large scale trials are being carried out to investigate if aspirin can be effective with these types of cancers.

Although there is the associated risk of internal bleeding related to aspirin when taken frequently, experts say the benefits of regular doses eclipse the inherent risks. Roughly 1 in 1000 people are at risk of major internal bleeding, with the figure doubling when aspirin is taken regularly. While medical professionals state that the fatal risk of internal bleeding in middle aged people is low, the danger does increase radically when a person enters their 70′s.

Aspirin is already a recommended medication for people who are at risk of heart related illness. With millions of people already taking aspirin to protect against strokes and heart attacks, together with being prescribed for help with dementia and to pregnant women suffering from pains, aspirin has been established as a cost efficient, readily available medication.

However, while aspirin is a recognized treatment for reducing the risks from heart attacks and strokes among those at increased risk, protection against cardiovascular disease is considered to be small for healthy adults compared to the downside risk of aspirin causing stomach and gut bleeding.

The report highlights the recommendation that any person wishing to take aspirin on a regular basis consults with a doctor before embarking on this course of action.

Although aspirin is not a cure or a guaranteed preventive measure for cancer, it can be viewed as a progressive step in the fight against the disease in the same manner as regular exercise and sensible eating keep a person healthy.

A significant benefit of aspirin as a treatment in the fight against cancer is the low cost of this form of medication compared to the predominantly high cost of traditional medications. The initial studies indicate the positive results of regular doses of aspirin in the treatment of various forms of cancer which, in addition to health benefits, could be a major breakthrough in reducing the cost of treatment for this illness worldwide.

The original studies were commissioned to examine the potential effects aspirin could have on cardiovascular disease, which evolved into the benefits aspirin can have on guarding against different forms of cancer. The trials did also look at the impact higher doses of aspirin can have on reducing the risk of cancer, but there were no additional benefits reported.

The recently release findings on the benefits of regular doses of aspirin follow a earlier publication by The Lancet in October 2010, which reported research found aspirin could reduce the risk of bowel cancer by approximately a third.

The evidence gathered from the trials suggests that it is believed to be more beneficial for a person in the 40 -50 age range to start taking aspirin on a daily basis – before an increased risk from cancer occurs – for a regular period of 20-30 years in order to maximize measures in guarding against cancers.

Dec

7

MetLife to Grow Through Alico Acquisition

Filed Under Insurance Company, Life Insurance, MetLife | 7 Comments

MetLife’s purchase of AIG’s Alico in November this year is forecast to achieve significant improvements in earnings for the company in 2011. The scope for an increase in business activity was set out at MetLife’s annual investor’s conference held on the 6th December 2011, with growth primarily expected to be delivered from outside the American insurance market.

The New York based insurer MetLife highlighted three key areas for the generation of operating earnings next year following the acquisition of Alico for $16.2 billion. Premiums from US corporate benefits and from international life and international accident and health insurance were expected to be the main sectors for generating earnings of between $5.1 -5.5 billion by the end of the fourth quarter of 2010.

However, the insurer predicts that US business operations will experience a decline in earnings in 2011, but remains positive about the acquisition of Alico driving future growth through its presence in global markets. MetLife’s purchase of Alico from US rival AIG earlier this year meant that MetLife dramatically increased its presence on the global stage.

The acquisition by MetLife meant that the US insurer gained access to Alico’s life insurance, retirement planning, wealth management, accident and health insurance products, which are available for both individual customers and corporate clients. In addition to Alico’s existing clientele and product range, MetLife gained access to new international markets, providing substantial opportunities for the insurer.

Chairman, president & chief executive officer of MetLife C. Robert Henrikson, said: “With our leading positions in the U.S. and our expanded global reach resulting from the acquisition of Alico, we are poised to achieve strong results next year and beyond.”

In October this year, MetLife reported third quarter net earnings totaling US$286 million compared to a loss of US$650 million for the same period in 2009. While third quarter earnings from MetLife’s US operations remained static in 2010, profits from international markets offset these poor returns amounting to global earnings of US$191 million – reflecting a 25 percent increase in operational earnings during the third-quarter period. There were significant improvements in returns from Chile, Korea and Hong Kong operations, along with increases in Europe, the Middle East and India (EMEI) – predominately driven by premium growth in India.

MetLife is planning to grow premiums, fees and other revenues by 30 percent in 2011, which will amount to between an estimated US$45.8 billion and US$47 billion. The US insurer also highlights the intention to invest in expanding its international network and to maintain a disciplined approach to business operations to ensure it is able to generate a profit.

The Alico deal means that MetLife gained access to Asian, European and Latin American insurance markets cementing the US life insurer’s global presence. As the economic tide changes in the wake of the 2007-2008 global credit crisis, multi-national insurers such as MetLife have been re-positioning activities globally to ensure that they have access to emerging markets, which are now providing insurers with new growth opportunities.

“We have accomplished a tremendous amount this year, strategically growing our businesses while successfully completing the largest acquisition in this company’s history” said C. Robert Henrikson.

MetLife is predicting challenging conditions within its USA operations, with the market expecting to remain stagnant during 2011. Also, MetLife is expecting tough times within the Japanese insurance market – which was an Alico stronghold – as the market continues to suffer from difficult trading conditions. However, MetLife are now strategically well placed in the growing emerging markets in the Latin America and Asian regions.

The news of a recent free trade agreement (FTA) between the US and South Korea was welcomed by MetLife – who operate in South Korea – as the commitment for both governments will address existing regulatory hindrances the insurer has experienced in this market. MetLife has been present in South Korea for more than 20 years, and in recent times, the country has expanded economically creating an increasing demand for protection products.

Metlife is the largest life insurers in the US and, along with international counterparts such as the Prudential, AXA, Zurich and US rival Prudential Financial, has increased its international presence in order to optimize benefits from emerging and developing markets. This is planned to facilitate higher growth returns from new premium business to offset the more challenging times in established outlets.

Insurance Company Mentioned:

MetLife

Possessing over 140 years of insurance expertise, MetLife aims to be an innovator in the field of international Life insurance. Globally, MetLife is able to offer its clients accident and health insurance, life insurance, disability income protection, and retirement and savings products.

Dec

6

China Opens the Door for Foreign Healthcare Providers

Filed Under China, Healthcare | 10 Comments

The government of China has announced that it is to encourage the development of the private healthcare sector in the country. The news paves the way for foreign firms to gain greater access to the Chinese private healthcare market.

The news comes from the State Council – China’s cabinet office – which is backing investment from the private sector in a bid to meet the growing demand for healthcare services in the country. The new policy will provide overseas healthcare companies, with more flexibility in establishing a new business within the private health sector.

The move by the Chinese government is designed to encourage investment from overseas business to meet the increasing demand for private healthcare services in the country stemming from its rapidly expanded economy. Economic expansion has brought increased affluence among the population of China, which in return has lead to a growth in demand for private healthcare. Now the Chinese government has opened the door for foreign investment by providing greater freedom for the establishment of private healthcare institutions in the country.

Currently Chinese regulations only allows foreign firms to enter the private healthcare sector in China through a joint venture with a Chinese partner, together with a cap on the level of capital which may be held in a Chinese operation. However, the recent announcement by the central government in China will mean a gradual easing on the level of investment permitted by a foreign firm in the private healthcare sector.

The new policy also supports the use of social funds to participate in government hospital reforms, with the conversion of some government run hospitals into private medical facilities.

Part of the reform will enable foreign firms to invest more financial capital in healthcare institutions in China, with the government making the process of establishing a business in the private sector easier and quicker to achieve in an attempt to ensure healthcare demands are met.

Joint-ventures which currently exist in the private healthcare sector will still be able to get official approval from provincial authorities in China, while the new arrangements for foreign firms wishing to set up a completely foreign-owned private healthcare facility will need to receive approval by the Ministry of Health and the Ministry of Commerce in China.

The Chinese authority’s decision to cut the red tape in the planning process for foreign companies engaged in the provision of healthcare in China is intended to ensure that the country’s healthcare needs are met partly by easing some the pressure on the Chinese public healthcare system.

As constraints are eliminated, the intention is for foreign healthcare providers to establish larger-scale hospitals throughout China – to be run alongside smaller healthcare facilities – leading to an overall improvement in medical services across the country. Also the provision of foreign-run hospitals is planned to play an important role in meeting the needs of patients seeking higher standards of healthcare services.

As the new policy is implemented and a positive effect on the Chinese healthcare sector is delivered, patients will be rewarded with a better choice of medical care, with benefits to be gained from overseas expertise.

The ParkwayHealth’s Gleneagles Medical & Surgical Center is based in Shanghai and is currently one of the leading foreign-Chinese medical providers in the country. ParkwayHealth established the partnership with the locally based Huashan Hospital and Fudan University in order to provide a higher standard of medical care with a broad range of health services, which include specialist inpatient care, paediatric care, family medicine, cardiology and general surgery.

Premier hospitals such as the ParkwayHealth’s Gleneagles Medical & Surgical Center are being strongly encouraged under the new policy being installed by the Chinese government.

In a statement the government said it will privatize some publicly owned hospitals and private medical agencies will receive the same preferential tax policies as public hospitals.

The majority of partially foreign healthcare providers already present in China offer small to medium sized medical centers providing a range of procedures and healthcare services. These are predominately in the largest cities such as Shanghai and Beijing, taking advantage of demand from expats and the more affluent local population seeking private medical care.

The United Family Hospitals has a network of healthcare facilities which are present in Beijing, Shanghai and Guangzhou, being one the first foreign-Chinese healthcare joint ventures in China. United Family Hospitals offer an extensive range of medical services and products to patients in hospital facilities that are up to western nations’ standards.

The proposed policy reforms – enabling increased foreign investment in the private healthcare system in China – will mean more competition and an improvement in medical standards through overseas firms looking to capitalize on the opportunities being implemented by the Chinese authorities.

Companies Mentioned:

Parkway Holdings

First listed on the Singaporean stock exchange in 1975, Parkway Holdings has become one of the top-quality integrated healthcare providers in Asia in the intervening years. Parkway now operates 16 hospitals in Asia, with over 3,400 beds throughout Singapore, China, Malaysia, India, Brunei, and the UAE. Parkway also boasts a nursing and health science college, extensive diagnostic, imaging and laboratory resources and the largest foreign owned medical network in Shanghai.

United Family Healthcare

Healthcare is the product of Chindex (previously the U.S.-China Industrial Exchange), which was started in the early 1980s to sell technological equipment in China. In 1993 Chindex started to focus entirely on medical equipment which gave them the knowledge and connections to start United Family Healthcare’s first hospital in 1997 as a joint venture between Chindex and the China Academy of Medical Sciences, called Beijing United Family Hospital and Clinics (BJU). Since then United Family Healthcare has expanded, adding two additional satellite clinics in Beijing as well as 3 more hospitals in Shanghai, Guangzhou and Wuxi.

Dec

3

New Alliance Between Zurich and SACE Agreed

Filed Under Insurance Company | Leave a Comment

Zurich Financial Services (Zurich) through its International Surety, Credit and Political Risk group has entered into a partnership with Italian financial services group SACE. The deal has been struck through Zurich’s North American operation and will work in concert with the Italian insurance and financial group SACE, which is controlled by the country’s Ministry of Economy and Finance.

The partnership between Zurich – arranged through its North American operation – and SACE will establish a framework for public/private collaboration in order to augment the accessibility of surety for Italian contractors involved in major global projects.

The deal between Zurich and SACE will cover the provision of reinsurance, co-insurance and surety facilities and will create new surety solutions for Italian companies engaged in work outside of Italy.

Michael Bond, head of International Surety, Credit & Political Risk at Zurich North America Commercial commenting on the agreement said: “Zurich’s broad international surety experience and global capabilities, combined with SACE’s product range and strong position in the Italian marketplace, strengthens the ability of both parties to serve the needs of companies operating in markets across the globe.”

The newly formed partnership will mean Zurich will use its ability to leverage SACE’s strong surety bond capabilities which in turn will offer the Italian group better ability to support its customers in worldwide markets where Zurich is established.

Surety bonds are a financial mechanism providing a guarantee to a party to pay a loss encountered from a breach of contractual or legal obligations. A fundamental purpose of a surety bond is a contract of guarantee involving three parties: the contractor, the person providing the bond and the employer contracting with the contractor who requires the surety bond to be provided. The guarantor is normally the insurer providing the bond. If a contractor defaults, the guarantor will provide compensation to the employer for any losses incurred from the specified event.

The SACE group is currently operating in more than 181 countries and has obtained an Aa2 rating from credit rating agency Moody’s. The Italian financial institution provides credit insurance, overseas investment, surety bonds and financial guarantees across the world.

Speaking for SACE Raoul Ascari, chief operating officer said: “This relationship with Zurich increases our reach and effectiveness, enhancing SACE’s role as a business facilitator worldwide. By working together, Zurich and SACE will be able to provide Italian companies with surety peculiar capabilities that alone, would be difficult to do.”

Zurich has been active in recent months in re-evaluating its global operations. In November 2010, Zurich – through its flagship unit Zurich Global Life – said it was re-entering the US life market after a prolonged hiatus. Zurich has taking a majority stake in PT Mayapada Life of Indonesia and acquired Lebanon-based Compagnie Libanaise D’Assurance in order to increase the Swiss insurer’s presence in developing markets.

As part of Zurich’s re-evaluation of group operations undertaken in 2010, in addition to acquisitions such as the Indonesian and Lebanese ventures, it has taken the decision to sell-off assets such as its Spanish joint venture Unnim. It also decided to maintain a 20 percent stake in its Chinese venture New China Life Insurance as part of a strategy to strengthen the Swiss insurer’s position on the global stage.

Insurance Company Mentioned:

Zurich

Dec

3

Insurance in the US Post Reform

Filed Under Aetna, CIGNA, Health Insurance, Uncategorized, USA Health Insurance | 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:

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.

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.

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