Jan
31
AIA AFG Takaful Poised to Expand In Malaysia
Filed Under Insurance Company, Middle East, Uncategorized | 5 Comments
Malaysia’s AIA AFG Takaful Bhd has set its sights on growth in the Malaysian takaful insurance market by expanding its reach in the Southeast Asian country. The Kuala Lumpur based joint venture is taking positive steps to penetrate the growing takaful bancassurance business in Malaysia.
AIA AFG Takaful Bhd is a 70:30 percent joint venture between American International Assurance (AIA) and Malaysia’s Alliance Bank dedicated to providing takaful savings, protection and investment products.
AIA was recently granted a family takaful license from the Malaysian central regulators Bank Negara Malaysia. AIA’s local partner – Alliance Bank Malaysia Bhd – is one of Malaysia’s leading lenders in one of the largest takaful insurance markets in the world.
The takaful insurance market is increasingly becoming an important market for insurers searching for new sectors of growth. Currently Malaysia is ranked second in terms of the provision of takaful insurance products in the world and the AIA AFG Takaful Bhd venture is designed to strengthen the insurer’s foothold in this rapidly expanding sector of the insurance industry.
AIA – the Asian insurance arm of the multi-national company AIG – floated on the Hong Kong Stock Exchange in late 2010 after a failed acquisition bid by the major British insurer Prudential. AIA is now aiming to strengthen its presence in the Asia-Pacific region of the world, which has seen exceptional growth in the demand for insurance products with the takaful insurance sector becoming an increasingly important brand geared to Islamic based nations.
AIG has been restructuring its global operations in order to repay the United States government US$182 billion as part of its bail-out in 2008 following the crises affecting the world’s financial industry. This has included the divestment of its interests in insurers including Alico, AIG Star Life Insurance and the AIG Edison Life Insurance Co to MetLife and Prudential Financial respectively; it is currently planning to sell its Taiwanese subsidiary Nan Shan as the insurers looks to generate further capital to repay the government loan.
AIA is regarded as the crown jewel in AIG’s global network, recognizing its significant presence in the Asian region and the new venture with Malaysia’s Alliance Bank will augment the insurer’s position in this emerging market. The Alliance Bank has a well developed network of over 90 banking outlets in Malaysia and, as part of the joint venture with AIA, the workforce will be increased threefold to 60 dedicated posts in order to strengthen its competitive position in the takaful insurance market.
As global insurers look for new opportunities to offset a slow-down in growth in traditional international markets, takaful insurance is growing in importance with multi-national insurers taking action to penetrate the market. Demand for takaful insurance products – geared towards Muslim populations – has increased significantly in recent years, encompassing countries in the Middle-East and Africa regions – most prominently in Malaysia, Indonesia, Qatar, and the United Arab Emirates.
Renowned consultancy firm Ernst & Young reported that the Malaysian takaful insurance market was worth US$889 million in 2008 – making it one of the key nations for takaful products; Ernst & Young also predict that the total market for takaful insurance will amount to US$ 7.7 billion by 2012.
The Malaysian government has been strongly supporting the development of the takaful insurance sector by encouraging insurers to accelerate growth across the country to meet the needs of both the urban and rural Muslim populations. The Malaysian government’s support for foreign and local insurers in the supply of takaful insurance products resulted from difficulties within the Islamic insurance industry in developing appropriate insurance products to meet emerging, specific market demands.
Bank Negara Malaysia (BNM), Malaysia’s central bank, granted four new licenses for family takaful joint ventures in 2010, which entitled foreign and local insurers and financial providers to enter the market and offer takaful insurance products in Malaysia. Along with the AIA permission, Great Eastern Holdings Ltd, ING Groep NV and AMMB Holdings Bhd were the other foreign firms given permission to start offering takaful insurance in Malaysia.
The takaful industry in Malaysia was established in 1985 after the enactment of the Takaful Act 1984 and has developed to become the second largest takaful market in the world after Saudi Arabia. Bank Negara Malaysia, predicts that the Malaysian takaful market will grow between 15-20 percent annually. The takaful insurance market plays a key role in the overall Islamic financial system, with the major players in the sector being Prudential BSN Takaful Bhd and the Mayban Fortis owed Etiqa Takaful.
Insurance Companies Mentioned:
AIA
The AIA Group is a leading life insurance organisation in Asia Pacific that traces its roots in the region back more than 90 years. It provides individuals and businesses with products and services for life insurance, retirement planning, accident and health insurance as well as wealth management solutions. Through an extensive network of more than 320,000 agents and approximately 23,500 employees across 15 geographical markets, the AIA Group serves the customers of over 23 million in-force policies in the region. The AIA Group has branch offices, subsidiaries and affiliates located in jurisdictions including Australia, Brunei, China, Hong Kong, India, Indonesia, Macau, Malaysia, New Zealand, Philippines, Singapore, South Korea, Taiwan, Thailand and Vietnam.
AIA AFG Takaful Bhd
AIA AFG Takaful Bhd. is a joint-venture company between American International Assurance Bhd. and Alliance Bank Malaysia Berhad, a wholly owned subsidiary of Alliance Financial Group Berhad.. AIA AFG Takaful Bhd. aims to create and introduce innovative and competitive Shariah-compliant solutions respecting the needs of the Muslim community and service quality demands of all Malaysians.
AIG
The American International Group is a leading international insurance organization with operations in more than 130 countries and jurisdictions globally.
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
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.
Prudential
Prudential has been in the insurance and financial services business since 1848. Today they operate throughout the UK, US and Asia offering international health insurance and retirement planning services, supported by 27,000 employees worldwide.
Great Eastern
Great Eastern is the oldest and most established life insurance group in Singapore and Malaysia. With $50.9 billion in assets and 3.8 million policyholders, it has two successful distribution channels – the tied agency force and bancassurance. The Company also operates in China, Indonesia, Vietnam and Brunei.
ING
ING provides banking, investments, life insurance and retirement services and operates in more than 50 countries. It serves more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia.
Jan
28
ACE Group Names New Head of Japanese Businesses
Filed Under Insurance Company, Life Insurance | 3 Comments
Multi-national insurer, the ACE Group, has announced the appointment of Jeffery Hager as the new Regional President for ACE Far East. Mr Hager will be responsible for ACE’s property and casualty (P&C) and accident and health (A&H) insurance businesses in Japan.
The post is based in Tokyo with Mr Hager reporting to ACE’s Vice Chairman, ACE Limited, and Chairman Insurance Overseas – General: Mr John Keogh. The new appointment will see Mr Hager taking over from Neil Smith, who moves to head ACE’s P&C and A&H insurance businesses in Thailand.
The new Regional President joins ACE from Dallas based Fireman’s Fund Insurance Company, where he has been National Sales Leader since 2009. Jeffrey Hager previously held the position of Executive Vice President with AIU, with responsibility for this company’s P&C and A&H activities in Japan.
“Jeff has an extensive and varied insurance background, ranging from country management responsibility in Asia to management of an agency sales force in Japan to marketing and front-line claims experience. I’m confident that his unique combination of experience and proven leadership of the P&C and A&H businesses in Japan will serve him well in guiding ACE’s continued success in the Japanese market.” Mr. Keogh said on the Mr. Hager’s new appointment to ACE.
ACE’s new head of Japanese property and casualty (P&C) and accident and health (A&H) insurance businesses brings 20 years of insurance industry experience holding functional positions in sales, distribution, marketing and claims in a number of countries including the USA, Korea and Japan.
The ACE Group is a leading global insurer and specialist in commercial property and casualty insurance. In 2009, it held assets valued at US$78 billion with gross written premiums amounting to US$19 billion. The US based insurer has a global presence with more than 50 offices worldwide and clients in over 170 countries. It offers property, casualty, automobile, life, personal, accident and health insurance products along with umbrella insurance coverage.
ACE has a strong foothold in the Asia-Pacific region with activities in Australia, China, Hong Kong, India, Indonesia, Japan, Korea, Macao, Malaysia, New Zealand, the Philippines, Singapore, Taiwan, Thailand and Vietnam. The insurer reported net income of US$675 million in the third quarter 2010 reflecting a 37 percent year-on-year increase for the group.
As the new regional president of ACE Far East business, Mr Hager will be responsible for overseeing a region which is experiencing mixed trading conditions. While China is at the forefront of economic growth, and the Chinese insurance industry is emerging as a pivotal market for global insurers, the position for insurers in Japan is one of stagnation in line with the sluggish state of the economy.
The ACE Group has 90 years experience in the Japanese insurance business and has established a sound status in the insurance market in the country; the company had a capital valuation of ¥8.15 billion (US$98.52 million) in March 2010.
Although the Japanese economy, and its insurance sector, has been static compared to other countries in the Asian-Pacific region, overall the ACE Group’s operations in the region are expected to continue to be buoyant during 2011 reflecting the insurers well developed Asian network and wide range of savings and protection products offered.
Insurance Company Mentioned:
The ACE Group was founded in Switzerland in 1985 and is a global leader in insurance and reinsurance serving a diverse group of clients. Headed by ACE Limited (NYSE:ACE), a component of the S&P 500 stock index, the ACE Group conducts its business on a worldwide basis with operating subsidiaries in more than 50 countries and commercial and individual customers in more than 170 countries. The company operates through four segments: Insurance–North American, Insurance–Overseas General, Global Reinsurance, and Life.
Jan
27
Southeast Asia Faces Growing Health Issues
Filed Under Healthcare, International Healthcare, Uncategorized | 10 Comments
A series of studies has highlighted concerns about the number of people dying from chronic non-communicable diseases in the group of ten countries forming the Association of Southeast Asian Nations (ASEAN). The studies published in a recent addition of the Lancet journal covered the issues and potential impact of chronic non-communicable and infectious diseases affecting the regions estimated population of 600 million people over the foreseeable future. The challenges are particularly acute because of the potential for major disasters in the region in an era when changes in social, economic and political reform are taking place.
The Southeast Asian nations included in the study were Brunei, Cambodia, Laos, Indonesia, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam. The studies incorporated the state of healthcare provision in the ASEAN block and called for action to protect populations and minimize deaths arising from diseases afflicting individuals – especially the poorer elements of society.
The papers warn of an emerging health crisis in Southeast Asian countries, highlighting the effects of chronic illnesses such as cancer and heart disease; chronic illness caused the death of 2.6 million people – over 60 percent off all deaths in the region – in 2005. The extrapolation predicts that this could increase to 4.2 million deaths per year by 2030, if action is not taken to achieve an improvement in health conditions.
The study also covered the impact of infectious diseases in the region, including the risks from emerging diseases such as SARS and bird flu in addition to malaria, cholera and dengue; recognizing that the region is highly prone to outbreaks of these sorts of difficult to control infectious diseases. Calls are made for Southeast Asian governments to take a more pro-active approach to the control of infectious diseases with the setting up of better surveillance processes to contain risks.
It is recognized that Southeast Asia is a region of the world which is vastly diverse in social, economic and political aspects. While Southeast Asia has become a crucial region for global trade, the social fabric of the region has been shaped by historical and geographical factors producing a network of diverse cultures. However the region is vulnerable to natural disasters and in some cases inadequate healthcare systems contributing to concerns for the health of inhabitants in the region if measures are not taken to combat chronic and infectious diseases.
The region is also facing the burden of an ageing population, and a shift in populations from rural to urban locations, placing extra demands on public healthcare systems; the rapid demographic changes occurring within and across national borders. The high level of migration of people to urban areas is increasing population densities in urban areas and is heightening the risk of infectious diseases particularly affecting poorer elements of society.
Southeast Asia is a region prone to national disasters impacting on the environment and leading to extreme health issues. The occurrence of monsoons, typhoons, droughts and floods can result in large numbers of people contracting infectious disease such as malaria and cholera.
Political turmoil and tensions in the region can also be detrimental to the delivery of quality healthcare and the control of outbreaks of infectious diseases. The studies emphasized the need for an improvement in surveillance techniques in order to combat these affects and avoid the threats from pandemics.
The papers studied the financing of health provision in the Southeast Asian countries subject to the review, identifying those countries seeking to provide an increase in universal coverage instead of a direct out-of-pocket payment based systems. Some countries, notably Laos and Cambodia, primarily relied on the provision of donations to fund healthcare for their poorer segments of society.
Thailand, Vietnam Indonesia and the Philippines are four countries in the Southeast Asia which are currently going through an economic expansion, and have a social health insurance scheme in place with payroll tax providing public healthcare. Also, as these countries experience a growth in affluence, the number of individuals covered by health insurance has increased in recent years and is set to continue on an upward trend relieving pressures on state funded healthcare provision.
The establishment of soundly based arrangements for funding improvements to healthcare is recognized as key to combating the affects of chronic and infectious diseases in the region.
Singapore and Malaysia, two of the most developed nations in the Southeast Asia, both have advanced healthcare systems, which are readily available to the citizens of these countries. Also Singapore and Malaysia have strong private healthcare systems playing a major role in providing healthcare for the more affluent populations in these countries.
The poor populations in the poorer countries in South east Asia are clearly most at risk from inadequate healthcare systems. In addition to concerns over monitoring and controlling health issues, there are worries that the Southeast Asian Nations Framework Agreement on Services will further lead to a brain drain of medical professionals working within the public healthcare services throughout region as they seek work in the private Southeast Asian healthcare sector, thus creating a shortage of human resources for state run health services in the region.
The introduction of mircoinsurance specifically aimed at making insurance affordable for the less wealthy has expanded in recent times and has become an important method of saving and provision of health insurance. This will undoubtedly provide a significant benefit in better managing the effects of chronic and infectious diseases in the medium and longer term in Southeast Asia
Jan
26
Vienna Insurance Group Grows in Central and Eastern Europe
Filed Under Insurance Company, Life Insurance | 9 Comments
The Vienna Insurance Group (VIG) has announced better than expected profits for 2010, highlighting the improvement in trading conditions in the fourth quarter last year. In a preliminary report covering operations in 2010, the insurer confirmed that it achieved a pre-tax profit of €505 million (US$686.8 million) reflecting a 15 percent year-on-year increase in margins.
VIG initial evaluation of trading results indicate that unconsolidated premiums written reached €8.7 billion (US$ 11.83 billion) in the 2010 financial year – an increase of 6.1 percent. The insurer’s non-life insurance segment achieved €4.8 billion (US$ 6.52 billion) in written premiums, with written premiums in the life insurance segment totaling €3.9 billion (US$ 5.3 billion) – a 11.7 percent increase compared to the previous 12 months.
The 15 percent increase in profit for the full year was particularly significant, highlighting the strength of activity in the fourth quarter as the profit margin for the first three quarterly periods in total amounted to 11 percent.
The Austria-based insurer is one the leading insurance groups in Central and Eastern Europe (CEE) and experienced strong growth as the CEE economies gathered momentum during 2010 and predicts the region will eclipse markets in Western Europe in 2011.
The CEO of the Vienna Insurance Group, Günter Geyer, said “By achieving very remarkable growth rates in a challenging period, we accomplished something quite unexpected in 2010. Both in Austria and in Eastern Europe, we succeeded in boosting premiums significantly. We recorded strong increases, notably in the life insurance segment.”
In Austria, VIG’s core market, the insurer’s subsidiaries – Wiener Städtische Versicherung, Sparkassen Versicherung and Donau Versicherung recorded an increase of 4.5 percent to reach €4 billion (US$ 5.44 billion) in written premiums in 2010.
VIG has been expanding in the CEE region over the past decade, with initial ventures in Germany, Slovakia and the Czech Republic in 1990 being followed by establishing insurance activities in countries such as Hungary, Poland, Liechtenstein, Croatia, Georgia and Belarus.
VIG reported positive figures in the Czech Republic market with a year-on-year increase of 10.2 percent to total €1.8 billion (US$ 2.44 billion); this was generated by the groups Kooperativa pojišťovna, a.s, Česká podnikatelská pojišťovna, a.s, and Pojišt’ovna České spořitelny, a.s, subsidiaries. VIG’s Czech life insurance premiums amounted to €740.4 million (US$ 1 billion) – a surge of 20.4 percent in 2010 – with premiums in the non-life sector amounting to €1.1 billion (US$ 1.5 billion).
The Slovak Group of companies Kooperativa poisťovňa, a.s., Komunálna poisťovňa, a.s. and Poist’ovňa Slovenskej sporitel’ne, a.s reported written premiums totaling €658.9 million (US$ 896.1 million) an increase of 3.2 percent over 2010; although non-life insurance premiums written declined to €318.4 (US$ 433 million) this was offset by an increase of 15.5 percent in Slovak life insurance premiums reaching €340.5 million (US$463 million).
In Poland, VIG, recorded written premiums of €753.6 million (US$ 1.02 billion) – an impressive increase of 25.7 percent. VIG’s ventures in the Polish non-life sector increased by 28.9 percent, amounting to €564.9 million (US$ 768.2) in premiums, while the life insurance sector reported an increase of 17.0 percent to reach €188.7 million (US$ 256.6 million). VIG said that the significant increase in Polish written premiums was primarily due to the expansion in the group’s single-premium business.
However, VIG’s Romanian groups recorded an overall decline of 12.8 percent in the value of premiums due to the restructuring of its non-life portfolio in the country. Romanian life insurance premiums totaled €93.5 million (US$ 127.1 million) an increase of 8.2 percent, while the non-life insurance segment premium reached €442.5 million (US$. 601.8 million).
VIG has been expanding operations in both emerging and established markets over the last two decades, building up the group’s presence in Europe – particularly the CEE region – gaining a strong foothold and market status which has driven improvements in written premiums.
Other insurance markets in which the Vienna Insurance Group has a presence include Albania, Bulgaria, Germany, Georgia, Croatia, Liechtenstein, Macedonia, Russia, Serbia, Turkey, Ukraine, Hungary and Belarus. Business in these countries produced total earnings amounting to €907.3 million (US$ 1.23 billion) in premiums written – contributing an increase of 7.5 percent in group results in 2010. The Ukrainian, Macedonian and Turkish insurance markets were highlighted by VIG as having developed significant premiums returns in 2010.
VIG envisage that its operations in emerging CEE insurance markets will drive growth for the group in 2011, while activities in the established markets are likely to be more challenging as economic conditions suffer the impact of national austerity measures.
Activities in the Ukrainian and Turkish insurance markets have been highlighted by VIG as core targets for future growth. In recent times, VIG has established life insurance ventures in Montenegro and Macedonia, and has specialized in property insurance in Lithuania. These new additions to the Austrian Group’s portfolio are designed to increase its exposure in Eastern European and bolster premium growth in the future. Currently, VIG are the market leaders in the Austrian, Czech Republic, Slovakian, Romanian, Bulgarian and Croatian insurance markets.
VIG provide clients with property/casualty, life, and health insurance products and services. The group offers a broad range of insurance coverage in areas of natural catastrophes, storm, technology, transportation, household, burglary, fire, liability, legal expenses, marine, aviation, motor vehicle, casualty, and credit guarantees.
The insurance markets in Central and Eastern Europe (CEE) are growing in importance for multi-national insurers looking to expand global presence. The CEE countries have been particularly attractive to insurers over the last decade as more countries have gained access to the European Union improving opportunities for insurers. The growth in the demand for insurance products in Poland and Slovakia has been significant, while insurers see scope for further developments in the Turkish, Ukrainian, Macedonian and Albanian markets.
Insurance Company Mentioned:
Vienna Insurance Group
The Vienna Insurance Group (VIG), is one the largest international insurance groups in Central and Eastern Europe with approximately 23,000 employees and a premium volume of around €8 billion. VIG is focused on the CEE economic region the insurance provider made the transition from a national insurance company to an international insurance group with more than 50 insurance companies in 24 countries. In total, about 50% of all VIG’s premiums already come from the Central and Eastern European markets.
Jan
25
ICRA Report Highlights Challenges For India’s Insurer
Filed Under Health Insurance, Insurance Company | 2 Comments
The impact of de-tariffing in the Indian general insurance industry has lead to a challenging time for Indian insurers during the 2007-2010 period. This factor is highlighted in a report by rating agency ICRA. The combination of tough economic conditions and the de-tariffing of the fire, motor and engineering sectors in the Indian insurance industry has resulted in a recorded compounded annual growth rate (CAGR) of 11.5 percent between 2007-2010, which compares with a growth rate of 16.8 percent during 2004-2007.
A report released by ICRA, India’s credit rating agency, analyzes the general insurance industry in India – a business which is estimated to be worth Rs 348 billion (US$ 7.6 billion). It found that the general insurance sector went through a challenging period between 2007-2010 set off by the global financial crisis, which triggered the complete (other than third party motor insurance) de-tariffing of the general insurance industry in the country from the 1st January 2007. The de-tariffing measures saw Indian general insurers activate the discounting of prices – initially within parameters permitted by the Indian insurance regulatory apparatus – but these were subsequently removed.
The de-tariffing of charges has had a significant impact on the four public sector run insurers and private insurance companies, affecting the pricing, profit margins and growth of the general insurance business in India in the 2007-2010 period. De-tariffing resulted in pricing discounts without due regard to the risks and profitability of the business being generated.
Market leaders in the general insurance business in India include ICICI Lombard, Bajaj Allianz, Reliance General and HDFC ERGO.
The health insurance sector has been particularly challenging for insurers as prior to de-tariffing margins had been cross subsidized by the more profitable insurance products in the fire and engineering sectors. However, health insurance is the fastest growing segment of the Indian insurance market led by multi-national insurer’s recent ventures with locally based and established insurance companies. This is reflected by the new developments such as the formation of MaxBupa – the partnership between UK’s British United Provident Association (BUPA) and locally based Max India Limited – competing with Star Health, Apollo Munich and Bajaj Allianz. In 2010, the health sector accounted for 20.8 percent of the general insurance market in India.
Over recent years the Indian health insurance industry has maintained steady growth rates, driven by rising income levels and an increased awareness of the benefits of health insurance leading to a CAGR in excess of 30% during the last six years.
This level of growth is predicted to continue over the next five years with the prospect of improving returns from new written premiums; insurance companies in the private sector are expected to be particularly well placed to capitalize on emerging opportunities. Indian banks are expected to enter the Indian health insurance market, seizing on opportunities to cross-sell polices to customers buying other forms of insurance from them.
The development of microinsurance products aimed at offering the high numbers of the low paid elements of society with a range of insurance cover could stimulate significant volumes of new business.
While ICRA’s analysis expects the soft pricing regime to continue in the short-term, placing continued pressures on margins for insurers in India, there is a reasonable prospect for premiums to return to levels to fully reflect risk attribution in the longer-term. In the meantime, the focus for insurers in the Indian general insurance industry will be on improving network efficiency, product development and differentiation as well as cost controls in order to maintain market share linked to the exceptional growth in the Indian economy.
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.
Bharti Axa General Insurance
Bharti AXA General Insurance is a joint venture between Bharti Group and AXA Group. Founded in July 2007 in Bangalore, India it now has over 40 branches across India offering a variety of insurance products for retail, commercial and rural customers.
HDFC Standard Life Insurance Company Ltd
HDFC Standard Life Insurance Company Ltd. is one of India’s leading private life insurance companies, which offers a range of individual and group insurance solutions. The company provides a line of protection, retirement, savings and investment, children, health, and group plans. It is a joint venture established in 2000, between Housing Development Finance Corporation Limited (HDFC Ltd.) and The Standard Life Assurance Company, a leading provider of financial services from the United Kingdom.
HDFC ERGO
HDFC ERGO General Insurance Company Limited is a 74:26 joint venture between HDFC Limited, India’s premier Housing Finance Institution & ERGO International AG, the primary insurance entity of Munich Re Group. HDFC ERGO has been expanding its presence across the country and is today present across 71 cities with78 branch offices with an employee base of over 950 professionals. The company has a right balance of distribution channel comprising of Dealerships, Brokers, Retail and Corporate Agents, Bancassurance and Direct Sales Team.
ICICI Lombard GIC Ltd
ICICI Lombard GIC Ltd. is a 74:26 joint venture between ICIC Bank Limited, India’s second largest bank with consolidated total assets of over USD 100 billion at March 31, 2010 and Fairfax Financial Holdings Limited , a Canada based USD 30 billion diversified financial services company engaged in general insurance, reinsurance, insurance claims management and investment management. ICICI Lombard GIC Ltd. is the largest private sector general insurance company in India
Jan
24
Ergo Insurance Group Enters Into New Partnerships In China and Vietnam
Filed Under China, China insurance, DKV, Insurance Company, Life Insurance | 8 Comments
The German based Ergo Insurance Group has announced that it has entered into two separate insurance ventures to strengthen its presence in Asia. In China, Ergo has entered into a life insurance joint venture with a local assets investment company. In Vietnam, Ergo has acquired a stake in a Vietnamese non-life insurance specialist.
Ergo Insurance, a subsidiary of global reinsurer Munich Re, announced in January 2011, that it is setting up a 50-50 Chinese joint venture with the Shandong State-owned Asset Holding Company (SSAIH). The deal was signed in Jinan – the capital of Shandong province – by SSAIH President Liu Changsuo and the ERGO Chairman of the Board of Management Dr. Torsten Oletzky.
Speaking on the significance of the Chinese insurance venture, ERGO Insurance Group Board of Management member, Dr. Jochen Messemer, said: “China is one of the strongest growth regions in Asia. As a consequence, both private customers and companies have an increasing requirement for provident products and a safeguarding against risks.”
Ergo has been present in China for several years with a representative office in Beijing and the new 50-50 life insurance joint venture will see the German insurer opening up a head office in Shandong province. The decision to enter the market in Shandong province was taken because the region plays a pivotal economic role in the Chinese economy and it has become the third largest domestic insurance market in China. The region has a population of 92 million citizens, offering Ergo huge potential to generate high premiums with their Chinese partners.
During Ergo’s time in Beijing, the German insurer has been analyzing the Chinese insurance market, and foreign insurer competition operating in the country and now feels that the time is right to enter the life insurance sector with SSAIH. Ergo plans to use their experience in the Chinese insurance market and continue developing a suitable business and sales model for the new SSAIH joint venture.
The Duesseldorf based insurer Ergo’s Chinese joint venture will see the German insurer providing expertise in areas of sales, risk management and product development. The Ergo and SSAIH partnership is still subject to the Chinese Insurance Regulatory Commission’s (CIRCs) final approval.
The Vietnamese joint venture will see Ergo acquire a 25 percent stake in the Global Insurance Company (GIC), a local insurer specializing in non-life insurance products in Vietnam. GIC was founded in 2006 and specializes in motor vehicle, fire and transport insurance; in 2009 the company recorded premiums of approximately €11 million (US$ 14.5 million).
“We are aiming for a long-term strategic partnership to develop Global Insurance Company into a leading insurer in Vietnam. This investment is part of our strategy to become active in the highly attractive non-life insurance markets in South-East Asia.” said Dr. Jochen Messemer on the potential benefits of the Vietnamese venture.
Vietnam’s economy has enjoyed bumper growth in recent years and has become a prime market for global insurers trying to capitalize on the growth in prosperity in the country and the expanding Vietnamese insurance industry. The Vietnamese non-life market is reported to have grown by more than 20 percent annually in recent years, with this sort of trend forecast to continue. The Ergo – GIC venture is planned to be formalized in February 2011 in the capital Hanoi.
The two new Asian insurance ventures will augment Ergo’s presence in the region, and will help the German insurer to continue its international growth, offering the company scope to access two emerging markets with soaring rates of economic expansion.
The two ventures will increase Ergo’s exposure in emerging international markets and is part of the German insurer’s plans to grow on the global stage. Asia has become a vital region of the world for multi-national insurers to generate growth in written premiums. Vietnam has a growing insurance sector, which has expanded rapidly over recent years and is set to continue. China has become a crucial global economic powerhouse in recent years driven by the growing prosperity of the massive population in the country. This has created a high demand for insurance products and made the Chinese insurance sector on the most desirable markets in the world. Ergo’s initiatives are expected to produce a significant increase on the 40 million clients currently supplied and generate profitable new business.
In the Asia-Pacific region, Ergo maintains a presence in South Korea, Singapore and India. It is understood that in addition to the recently announced joint ventures in China and Vietnam, the German insurer plans to further increase its presence in the region. Outside Asia, Ergo has a high exposure across Europe and in Canada operating in travel, life, property-casualty, direct, legal protection and the health insurance sectors though such brands as Deutsche Krankenversicherung AG (DKV).
Insurance Companies Mentioned:
Ergo
Ergo is a subsidiary of Munich Re and offers a wide spectrum of insurance provision and services across 30 countries; it currently has more than 40 million customers. Ergo has a strategic focus in Central and Eastern Europe and certain Asian markets. The German insurer has become one of the leading health and legal expenses insurance companies within Europe. Additionally Ergo provides property and personal accident insurance in India.
Munich Re
Munich Re stands for exceptional solution-based expertise, consistent risk management, financial stability and client proximity. This is how Munich Re creates value for clients, shareholders and staff. It operates in all lines of insurance, with around 47,000 employees throughout the world. Especially when clients require solutions for complex risks, Munich Re is a much sought-after risk carrier. The primary insurance operations are mainly concentrated in the ERGO Insurance Group. ERGO is one of the largest insurance groups in Europe and Germany and 40 million clients in over 30 countries place their trust in the services and security it provides. In international healthcare business, Munich Re pools its insurance and reinsurance operations, as well as related services, under the Munich Health brand.
Jan
21
Corporate Health Insurance Costs To Increase in 2011
Filed Under Health Insurance, International Healthcare, Medical Insurance | 4 Comments
The provision of employer-provided health insurance is expected to increase by an average of 10.5 percent globally during 2011. This assessment is identified by specific regions worldwide in a report by global professional services firm Tower Watson.
The Latin American region is expected to experience the largest cost increase this year at 13.7 percent, followed by North America at 11.6 percent. The Middle East and Africa are forecast to see an increase of 10.2 percent, as is the Asian-Pacific region, while Europe is forecast to generate the lowest increase in the categorization at 9.1 percent.
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Global medical cost trends between 2009-2011 |
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| 2009 | 2010 | 2011 | |
| All | 10.2 | 9.8 | 10.5 |
| Asia Pacific | 9.9 | 10.3 | 10.2 |
| Europe | 9.4 | 7.8 | 9.1 |
| Latin America | 11.6 | 12.1 | 13.7 |
| Middle East/Africa | 10.9 | 10.1 | 10.3 |
| North America | 10.8 | 11.3 | 11.6 |
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All figures are shown as a percentage increase. |
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The main findings from the survey were that 95 percent of the countries included in the survey experienced an increase in medical cost trends exceeding the rate of general inflation. The report also found that medical costs are likely to continue to increase in double-digit numbers over the next 5 years, representing a challenge for companies providing health insurance for employees. Despite increasing costs, the report recognizes that companies appreciate the benefits of providing health insurance for employees as a method of maintaining a healthier workforce and resultant higher attendance levels.
The Tower Watson report is based on surveys conducted between September and October 2010 and includes information from the world’s leading health insurers offering medical insurance solutions to employers across 37 countries throughout the regions of Africa, Asia, Europe and the Americas. Data was used from 170 insurers in total recognizing the significance of the market share held in each country. Health insurers taking part in the study were asked to provide information regarding medical cost trends in the countries where they had a presence.
In addition to analyzing global medical cost trends by region, the report entitled – 2011 Global Medical Trends – looked into market trends in the provision of health insurance distinguishing effects between advanced and emerging economies. The findings indicated that emerging economies will see the bigger increase at 11.8 percent, while a 9.3 percent increase is forecast for advanced economies.
Countries such as Chile, the United Arab Emirates, South Africa, Brazil and the Philippines were categorized among emerging economies, while the US, United Kingdom, Italy, France and Switzerland featured as advanced economies. Switzerland is expected to incur the biggest increase in cost trends over the past four years at 6.7 percent within the advanced economies, with Chile seeing the largest jump in medical cost trends at 9.8 percent in the emerging economies.
Towers Watson’s, senior international consultant, Francis Coleman, said: “The growing demand for private healthcare, particularly in developing nations, has placed enormous upward pressure on the cost of providing this valuable employee benefit. With double-digit medical cost increases now the norm, there appears to be a shift among employers and insurers toward a more holistic and consumer-directed approach to healthcare – one that helps employees to become more aware of risks and more responsible for maintaining a healthy lifestyle.”
The survey highlighted the growing corporate interest in wellness programs. This feature is applicable to all regions, with the majority of respondents adding some kind of wellness element to their healthcare packages. It was noted that globally 72 percent of respondents offered clients lifestyle and health education programs in addition to other popular components including personal health assessments and reports offering chronic condition and disease management programs.
“The clear interest all regions are showing in employee wellness is encouraging, and we expect that wellness features will play a greater role in managing global medical costs,” said Nicole Serfontein, a senior international consultant with Towers Watson.
In recent years, health insurance has grown in popularity as a fringe benefit offered by employers to its workforce and is becoming a valuable benefit in attracting and retaining staff. In particular, the demand for corporate health insurance in countries with developing economies has been increasing as the workforce market has become more competitive. Changes in state funded health services resulting in some discretionary treatments being cut back or refused has highlighted the benefits of corporate insurance.
The more stringent application of health and safety laws in the workplace has also added to the benefit and need for company provided health insurance.
Insurers reported two significant factors driving up employer based medical insurance costs; these were; A) the increasing costs for treatments partly due to advances in medical technology and, B) employees making an increased use of corporate medical insurance in some cases for treatments of a non-essential nature not available under public run health systems. These factors together with the insurance companies drive to improve profit margins and maximize market opportunities will have contributed to the uplift in the overall cost of corporate provided medical insurance.
Health insurance providers still use tried and tested methods in order to control costs, such as coinsurance, deductibles, contracted networks and pre-approved products. While the emphasis on the benefits from taking a holistic approach to healthcare is being widely used as an additional method in an attempt to control health costs.
Jan
21
PruHealth Launches New Product
Filed Under Health Insurance, Medical Insurance, United Kingdom | 3 Comments
PruHealth, the joint venture between British insurance giant Prudential and Discovery Holdings is launching a new health product range. It will be the first new product to be released by PruHealth since its take-over of Standard Life Healthcare UK in August 2010.
The new product range will be launched on the 1st of March 2011 and will result in the gradual phasing out of existing Standard Life and PruHealth policies.
The new health insurance product will be available to individuals, SMEs (small & medium enterprises) and corporate clients. A key feature of the new range of healthcare cover is that it can be tailor-made to suit personal requirements, with a series of add-ons to a basic healthcare package. The add-on options will include cover for cancer and an addition to promote wellness and vitality, with discounts for gym membership.
PruHealth has taken time in launching the new product range, which follows consultation with current policyholders in order to create a healthcare insurance product to penetrate the market.
Part of PruHealth’s service will include the development of a ‘Cover Check’ programme designed to simplify policy documentation making it easier for policyholder understanding. Marketing of the new product range will highlight the transparency of the cover included in the policy documents, with the emphasis on a ‘Full Cover’ policy having no hidden conditions.
PruHealth acquired Standard Life Healthcare UK in August last year as a bolt-on to Prudential’s insurance products with the intention to grow its healthcare business.
As part of the launch of the new product range, PruHealth will move its customer services operation from South Africa to the UK, although back-office staff will remain in South Africa. The decision to relocate the PruHealth customer service staff is a key part of the insurers bid to gain market share in the UK and enhance its reputation for quality of service.
PruHealth’s new product has been designed to meet a wide spectrum of healthcare needs building on its core strengths of brand awareness and service delivery. Consequently, the company is optimistic that the efforts taken to consult with policyholders in advance of its launch will reap positive benefits in terms of securing new business premiums.
Insurance Company Mentioned:
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.
Jan
20
Controversial National Healthcare System Reform Outlined
Filed Under Healthcare, United Kingdom | 3 Comments
The UK Government published its 350-page health bill detailing the proposed reform of the established British National Healthcare System (NHS). Implementation of the plans contained in the bill and associated documents – released on the 19th January 2011 – will see an unprecedented reform of the British healthcare system.
The pro-market based shake-up of the UK healthcare system is expected to save the government many billions in the future and improve the delivery of patient care. The changes – reflecting the most significant upheaval of the NHS since its inception in 1948 – will be overseen by David Cameron’s Coalition government. Under the new healthcare proposals, the government expects to save the UK taxpayer around £10 billion (US$ 15.7 billion) over the next decade.
As part of the new health legislation, private healthcare providers will see an increased opportunity to offer patient care through being allowed to compete with state funded NHS hospitals. The changes will see the government hand General Practitioners (GPs) 80 percent of the country’s massive healthcare budget in a radical move to make the NHS more cost efficient.
A key part of the reform will result in 24,000 management staff involved with the current NHS being eliminated at a controversial initial outlay of £1.4 billion (US$ 2.2 billion). Out of the £1.4 billion, payments for staff redundancies will cost around £1 billion (US$ 1.57 billion), with another £400 million being spent on IT and property costs.
The government’s proposals have been widely criticized especially the spending of such a large sum of money on changes, planned for implementation by 2013, at a time when austerity measures are being applied to other parts of the UK economy. However, the UK government contend that the initial financial outlay will be more than offset by long-term savings in running costs for this national institution. According to government calculations £5 billion (US$ 7.8 billion) will be saved by 2015 just by staff reductions.
Critics of the new health bill believe the reforms will be largely disruptive for the NHS and are unnecessary at a time when the government should be saving money rather than spending on changes.
Under the proposals published in the Health and Social Care Bill, the government plan aims to:
* Give GPs greater power and responsibility for buying care from hospitals, being allowed to form consortiums to carry this out.
* Give hospitals autonomy outside the control of the government body – the Department of Health. Under the new proposals, if a hospital fails it can be taken over by private operators in order to become financially efficient.
* Provide each region with a local HealthWatch organisation, which will ensure patients and carers have a voice.
* Introduce a ‘Care Quality Commission’ which will have the responsibility of ensuring all standards in the NHS are regulated and monitored. The commission will have powers to shut down any healthcare service failing to meet required standards.
* Introduce a hospital regulator with powers to decide how much hospitals receive for treatments. Additional powers will provide for the regulator issuance of licenses to healthcare providers and promoting competition within the healthcare sector.
The UK government is carrying out the reforms of the NHS partly to save expenditure on the NHS – where funding levels have increased significantly in recent years and are still considered inadequate – expecting to shed 4 percent from the national budget annually over the next four years. The other aspect of the reform is the modernization of the UK healthcare system as the country faces increasing medical costs due to an ageing, ailing population seeking access to more sophisticated but expensive medical treatments.
A major part of the proposals is the axing of Primary Care Trusts, which are part of the NHS primary healthcare services working at a community level. The Primary Care Trusts (PCTs) take up 80 percent of the overall NHS budget and, since created, have cost more to run in administration than the provision of front line patient care. The abolition of the PCTs is responsible for incurring the initial cost of £1 billion (US$ 1.57 billion) in redundancy payments, but once implemented is expected to save the NHS £1.7 billion (US$ 2.6 billion) every year.
The creation of new GP consortiums, with the responsibility for primary healthcare services, will be closely monitored through the HealthWatch network. The proposals highlight the emphasis on improvements to patient care, with patients having a greater choice in the supply of services. The GP consortiums will have a cap on administration costs and will be expected to do “more for less”. A fundamental element of the creation of GP consortiums is to cut out middle management and bureaucracy and to speed up delivery of services on a more personal basis.
The expectation is that patients are unlikely to see much difference in the way healthcare services are provided in the short term, however, in the long term the government premise is that patient care will improve as a result of the changes being introduced.
So far as hospitals are concerned, the reforms will give them independence from the central government as they become Foundation Trusts. While hospitals are given greater autonomy, they are required to be efficient with the prospect of being taken over if they fail to deliver to the standards required. Part of the reforms will see no limits on the number of patients a hospital can treat, allowing hospitals to become more cost effective. As a safeguard, the healthcare regulator will have budget provisions for the retention of essential services if a Foundation Trust is relieved of responsibilities under the new process.
Private healthcare providers will be allowed to compete for the treatment of NHS patients under the proposals, with the scope to take over failing NHS hospitals. The pro-market based reform of the UK’s NHS is expected to give the private healthcare sector good opportunities for growth with inclusion in the supply of medical services for the national system.
While there is considerable opposition to the proposals in the Health Bill, the UK government is intent on progressing with full implementation over the next two years, with pilot schemes already being put in place with selected GPs.
Jan
20
Finnish Healthcare Provider Augments Network
Filed Under Healthcare, International Healthcare | Leave a Comment
Terveystalo, the established Finnish healthcare group has announced that it will acquire the ODL Tervey’s network of medical facilities from its current owners – Oulun Diakonissalaitos foundation.
Terveystalo will take-over the Oulu’s Deaconess Institute’s health services in order to consolidate their existing Finnish private healthcare operations. The acquisition will provide Terveystalo with healthcare facilities in the North of Finland. This will expand the healthcare provider’s reach in this European country with a reputation for high quality standards of healthcare.
Terveystalo is Finland’s leading private healthcare provider offering comprehensive healthcare services, occupational healthcare and hospital services to individuals, groups and insurance companies, including patients out-sourced from the public healthcare sector.
Finland has a relatively small population of 5.2 million people, but there is a high proportion of aging inhabitants suffering from chronic medical conditions. While private healthcare currently supplies around 20 percent of healthcare coverage in Finland, there is an established interaction with the state run medical system – the Social Insurance Institution (KELA). The combination of these factors provides private healthcare operators, such as Terveystalo, with incentives for expansion of their activities and profit objectives. KELA supports private healthcare providers in Finland by using their facilities for patient treatments and doctor consultation fees.
Terveystalo is currently present in 100 locations spread across 60 towns in Finland, supplying more than 10 percent of the 17,000 doctors working in the country. Currently Terveystalo has a workforce of roughly 2,500 medical professionals generating group sales in 2009 amounting to €300 million (US$ 360 million).
The proposed acquisition by Terveystalo is subject to approval by the Finnish Competition Authority.
The Finish healthcare system is regarded as one the best in the world, with residents covered under a largely decentralized healthcare system, which has been developed following major reforms introduced in the 1990s. While the Finnish private healthcare sector plays a residual role in the provision of the country’s healthcare, it offers patients a high standard of care with minimal waiting times.
Healthcare Company Mentioned:
Terveystalo
Terveystalo is Finland’s leading private healthcare service company, operating private clinics and hospitals that offers healthcare, occupational health, and medical treatment services for corporations and private individuals in the country. Its services include comprehensive occupational healthcare services, including testing procedures, as well as medical treatment services; general practitioner and specialist services; hospital services, such as surgical operations; and diagnostics services comprising imaging, laboratory, and screening services for private clinics, occupational healthcare units, and medical centers.
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