Sep
30
Turkey may finally be realizing its potential as an important international healthcare center. Annual revenue for the Turkish medical tourism industry is expected to pass US$5 billion within 5 years, as the country’s modern hospital and spa facilities begin to attract a growing number of foreign patients who are seeking cost-effective medical treatment from all over the world.
The rising healthcare costs in developed Western countries coupled with the continued progress and flattening of the global economy has encouraged many people to now venture abroad for more cost effective destinations when seeking medical treatment, a practice now widely known as medical tourism. These macroeconomic factors combined with the falling costs of travel and communication have enabled world class healthcare facilities to establish themselves all around the world. International clients seeking alternative healthcare solutions to what is available in their home countries are now presented with many opportunities at competitive prices. Popular locations for medical travel include countries in South East Asia and Latin America, where many surgery procedures, including transplants and cosmetic procedures, cost a fraction of the price they would do in North America or Western Europe, and usually can offer shorter waiting times for treatment overall as well. The convenience and efficiency of pursuing international medical tourism options is something to be considered for patients seeking to fully evaluate their future health procedures.
According to a recent study conducted by the Turkish Statistical Institute and the Central Bank, the number of tourists coming to the country specifically for healthcare and wellbeing purposes has risen consistently over the past few years. In 2003 there were 103,400 tourists that received medical treatment in Turkey, spending an estimated US$91 million in the process. That number then increased to 162,480 tourists spending US$282 million in 2008 although it fell slightly in 2009 to 132,680 medical tourists at US$225 million. The latest estimates for 2010 are at around 165,000 tourists, which would now rank Turkey as the tenth most popular health tourism destination in the world. Inbound medical tourists have largely hailed from Germany, the Netherlands, France and the Balkans, which are all areas with a large Turkish Diaspora. There was also a noted increase in patients hailing from the Middle East, who have begun to prefer Turkey to Europe. Among these reported foreign patients, around 94 percent were treated in private facilities where the eye, brain surgery, orthopedic and cardiology departments attracted the largest number of patients.
The growth in Turkey’s medical tourism sector has been driven primarily by the comparative price advantages it holds over several key neighboring healthcare markets. In Turkey, fees for certain medical procedures can range from one-half to potentially as little as one-fifth the price in Europe and other industrialized countries. For example, the average price for a heart valve replacement in Turkey is $16,950 while it costs US$58,250 in the United States, US$25,000 in the UK and US$47,794 in Switzerland. In addition to this cost advantage, Turkey’s prime geographical location between Europe, the Middle East and Asia is a convenience, making it more accessible to a wide range of potential travelers. Furthermore, as a European Union candidate, the country has been forced to upgrade its health system to meet EU standards and now features high-quality hospital infrastructure with an abundance of well-trained staff well versed in a number of foreign languages. All of this combined with favorable US dollar exchange rates, suitable climactic conditions, and bountiful tourist attractions, add up to make Turkey a medical tourism destination with considerable potential
Turkey’s private healthcare industry has worked hard in the past decade to capitalize on this international medical tourism market potential, particularly in the provinces of Istanbul, Kayseri, Adana and Gaziantep, which attract the largest number of foreign patients. Turkey now hosts 556 private hospitals, each competing feverishly with one another for foreign clients. Furthermore, the national government has plans to upgrade a share of the country’s 833 publicly-run hospitals to accommodate foreign patients as well. International investors are also becoming aware of this opportunity and looking to invest in the country’s private healthcare market. Parkway Holdings, Fortis Healthcare International and Life Healthcare Group are among the top international hospital chains interested in establishing a presence in Turkey.
Despite these promising growth indicators, Turkey’s medical tourism industry still has several challenges to overcome if it wishes to compete amongst the world’s most popular medical tourism destinations, like India or Malaysia. Industry analysts have cited a lack of cooperation between state and private sector players as a key impediment to further developing the medical tourism sector. Without a more integrated national approach, Turkey has been unable to either effectively market its prime medical assets abroad or improve upon the number of qualified healthcare professionals working in the system at present. Another disadvantage Turkey currently faces is with its cumbersome legal system. Foreign patients generally have little legal recourse in Turkey. As it stands, it is incredibly difficult to win a lawsuit for medical malpractice under Turkish law. The protracted legal process usually required to conduct a case leaves many plaintiffs out of pocket even if they win damages. Visa requirements can further complicate matters and present further logistical and expense issues if the plaintiff is forced to leave a country before their case is concluded. In the rare case that a plaintiff has succeeded, compensation has been relatively minimal. These issues need to be resolved because Turkey’s international healthcare business continues to grow; more questions about the regulation of medical tourism in the country are sure to arise. Turkey’s medical tourism market is currently worth around US$500 million, but its potential is far greater.
Sep
28
Malaysia General Insurance Market to Grow
Filed Under Allianz, Asia, general insurance | 1 Comment
New figures released this month by Malaysia’s insurance authorities have provided ample evidence of the country’s continued development into one of Asia’s most promising general insurance markets.
Malaysia’s economy grew at 7.2 percent last year, the highest rate experienced since the year 2000. The Malaysian government has continued to aggressively pursue substantial investment programs with the explicit goals of doubling GDP per-capita and turning Malaysia into a high income country by 2020. New parliamentary initiatives such as the New Economic Model (NEM), Economic Transformation Program (ETP) and the Tenth Malaysian Plan will, according to industry analysts, eventually contribute to a growth in demand for insurance products and services. However, despite these initiatives, the insurance industry in Malaysia currently faces numerous challenges as customers tighten their belts and become more skeptical toward the importance of protecting assets through insurance. The industry believes that general insurance agents must now play a greater role in order to weather the volatile economic and financial challenges.
In response to these challenges, the Malaysian Insurance Institute (MII), one of the country’s three insurance associations, organized the General Insurance Agents Convention for all general insurance agents in Malaysia on September 13, 2011 in Kuala Lumpur. The event was attended by 500 participants and encouraged discussion amongst industry professionals about how to best address the issues facing Malaysia’s emerging general insurance market going forward.
Speaking at the conference, Khadijah Abdullah, MII Chief Executive Officer, revealed that Malaysia’s general insurance agency force is projected to grow by over a quarter this year, up from the roughly 35,000 registered agents active in the country in 2010. This promising forecast is based on new MII data, which showed than an average of 800 new candidates per month had taken the insurance agents exam during the first half of the year. Not only are more Malaysian citizens realizing the importance of adequate insurance coverage, many are clearly now looking to the industry for employment opportunities. “A career as a general insurance agent is still attractive and very much sought after,” Khadijah Abdullah told convention attendees.
An increased agency force is vital to the future development of the Malaysian general insurance sector. Together with bancassurance, agents remain the most effective distribution platform for insurers in the Asia Pacific country. According to the General Insurance Association of Malaysia (PIAM), total general insurance gross premium amounted to MYR13 billion (US$4.1 billion) in 2010, of which agents contributed MYR7.4 billion (US$2.35 billion). In lieu of more technologically advanced distribution and promotion platforms, more agents will continue to be required throughout Malaysia as demand for insurance solutions escalates.
The changes in consumer attitude towards insurance in the Asia Pacific region have become more readily apparent. A new study released last week by ING Insurance Berhad showed that 83 percent of all Malaysian consumers believe that there is now a much greater need to protect their lifestyles now than compared to just 12 months ago. Rising healthcare costs and lifestyle expectations has enabled the attitude towards and awareness of insurance to change very quickly. Overall, the rise in income, healthcare, education and housing opportunities across most of Asia, have given families in the region greater access to a lifestyle they would now like to protect.
As the insurance industry continues to develop in Malaysia more regulatory measures are expected in the near future to update the market and more closely match international standards. For example, The Malaysian Central Bank (BNM) has recently come out with revised guidelines on motor insurance, aimed at curbing fraud and ensuring consumers understand the appropriate market value of their motor vehicle when applying for comprehensive coverage. The new measures came into effect on August 1st 2011 and have already worked to address many grievances in the motor insurance sector. In addition, Malaysia’s government has committed to the gradual financial liberalization of its Islamic finance sector and plans are also underway to introduce compulsory travel insurance cover for all Malaysians flying overseas by year’s end.
The MII advised that while these measures could do much to improve insurance awareness and coverage in Malaysia, their goals will not be realized without an adequately trained agency force, and this will take time and resources to achieve. “This requires the agents to have an in-depth knowledge and ability to advise their clients,” Khadijah Abdullah said, adding that further collective action would need to be taken to ensure best business practices are consistently maintained in Malaysia’s general insurance market “As an industry as a whole, we are driving higher professionalism as well as quality standards and in this respect, all stakeholders have to work together to achieve aims and objective.”
While both the numbers of agents and clients in the general insurance market are poised to grow, premium levels, with the exception of government subsidized motor and fire insurance lines, are expected to remain relatively stable due to intense competition amongst both domestic and foreign insurance players in the country. Malaysia has already proven to be an attractive location for several of the world’s most prominent insurers and they are bringing their expertise to the country to great effect. Prudential Assurance Malaysia Bhd (PAMB), a local joint-venture operation with the UK’s largest insurer by market value, posted a 13 percent increase in new business sales in the first half of 2011 and are now confident of surpassing last year’s totals. Indeed, Prudential now believes that the strength of its Asian business will continue to protect the insurer against the worst of another potential financial crisis in the West. These same sentiments were echoed earlier in the year by Allianz, who are themselves undertaking numerous initiatives to improve their distribution capabilities in the region.
Companies Mentioned
Allianz
Allianz Group is one of the leading global services providers in insurance and asset management. With a worldwide network of 153,000 employees, the Allianz Group serves 75 million customers in over 70 countries. Allianz offers a wide variety of insurance products to both private and corporate customers, including motor, accident, general liability, fire and property, legal expenses, credit and travel insurance. Allianz provides life and health insurance products on individual and group basis. Allianz is the market leader in the German market and has a strong international presence in insurance.
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.
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.
Bank Negara Malaysia
Bank Negara Malaysia is Malaysia’s central bank, tasked with overseeing the nation’s economic and financial systems.
Sep
27
Abu Dhabi Enforce Health Insurance Cover
Filed Under UAE Insurance | 2 Comments
Health officials from Abu Dhabi have reissued a warning to all residents in the Emirate to maintain an up-to-date health insurance policy or else face a stiff penalty.
At a conference held yesterday, the Health Authority Abu Dhabi (HAAD) unveiled a new media awareness campaign that aims to publicize the activation of the Health Insurance Law No. 23 of 2005 and to further educate Gulf residents about the tremendous importance of having valid health coverage in the Emirates at all times. The HAAD wants all companies and UAE nationals who have workers under their sponsorship to be aware of the national health insurance requirement as well as the new mechanisms now in place to enforce it.
Abu Dhabi’s Health Insurance Law states that active employers or sponsors in the Emirate must provide some form of health insurance to all employees and their family members, including an employee’s spouse as well as cover for three children aged 18 or lower. The law also applies to laborers at construction companies, one of the largest sources of migrant work in the region. If an employer or UAE sponsor fails to adhere to this responsibility and either does not subscribe to a basic health insurance scheme or fails to renew their policy they will be subject to a minimum fine of Dh300 (US$82) per employee, worker or dependent, per month. Consistent violation of the law could also resort in an employer’s trade license in the Emirate being revoked. Anyone who reregisters after their policy expires will be treated as a new applicant.
Speaking at the conference Monday, Marwan Al Nabulsi, Head of the Enrolment and Inspection at HAAD, told attendees that their organization was prepared to do even more to ensure that all Abu Dhabi residents and workers hold adequate health cover. The HAAD introduced a new option in January this year that extends insurance eligibility, giving employers and sponsors the ability to secure a valid insurance card for their employees for up to three years at a time. “People will know the value of having an insurance card when somebody gets sick and they go to a hospital and they will have to pay the bill. If they don’t have insurance, they have to come up with the money to pay the bill,” Al Nabulsi said.
While these health insurance requirements have been in place since the law was issued in 2005, fines for non-compliance were not enforced until the middle of last year. Speaking at the conference, Dr Jamal Mohammed Al Kaabi, Head of Customer Service and Corporate Communications at HAAD explained that the necessary infrastructure for collecting and administrating fines could only be realized by the health authority in May 2010. This was followed immediately by a mandated grace period by order of Sheikh Khalifa, which gave offenders the necessary time to adjust to the new system in place. Due to the larger than expected volume of offending claims however, more moves were soon required by the HAAD to ensure the health insurance scheme could be properly maintained and enforced. “We spent four months under that order and then we decided to establish a committee within the health authority to look into all appeals that are presented through customer service and the committee,” Dr Al Kaabi explained.
In September 2010, HAAD established the Appeal Committee for Insurance Fines as their new subsidiary tasked with reviewing all health insurance appeals in the Emirate. Individuals looking to file an objection are charged a Dh100 (US$27) appeal fee before fines can be cancelled, while employers must pay Dh2000 (US$545) to have their case heard. According to recently released HAAD statistics, these appeal fees have not deterred many people from filing a complaint. Since the health insurance requirements have come into force, the Appeal Committee for Insurance Fines has received over 42,000 appeals. Of these appeals, HAAD notes that 27,895 have come from individuals looking to cancel their fines, 6,677 have been group appeals, while 6,319 have come from small companies and 1,262 from larger companies.
Despite this considerable appeal traffic, Dr Al Kaabi was confident that considerable progress had already been made and that the new health insurance scheme was already achieving desired results. “Activating the Health Insurance list of penalties is aimed at letting the sponsors/employers provide health insurance cover to all their workers/employees and not to collect violation fees. The HAAD has decreased the percentage of violations through this and sometimes it has made exemptions in order to allow everyone easier access to health insurance,” Dr Al Kaabi said.
The number of registered health insurance complaints has already dropped this year. According to HAAD statistics, 693 formal complaints have been filed since the start of this year, compared with over 2,300 complaints through the same period in 2010. A further 64 complaints have been moved onto the courts for final resolution. As it stands now, 97 percent of all workers and residents of Abu Dhabi are insured to some degree. The HAAD hopes to achieve 100 percent compliance in the near future. Insurance penetration and density in the UAE is at the highest levels in the Gulf region, and an increase in both native and expatriate populations is expected to only improve upon this trend. Al Kaabi concluded the conference saying that his organization hopes to attain this goal not through fees and appeal courts but from a deep mutual understanding of the importance of universal health insurance coverage and adherence to the law in Abu Dhabi. “We are not looking into collecting fines, what we are doing actually is we want everybody to be in compliance with the insurance law,” Dr Al Kaabi asserted.
Organizations Mentioned
HAAD
The Health Authority Abu Dhabi (HAAD) is the chief regulatory body overseeing the healthcare sector in the Emirate of Abu Dhabi. The HAAD is tasked with monitoring the health of the local population and the overall performance of the health system. In addition, HAAD defines an overall strategy for the health system, works to enforce standards, maintain performance targets and increase awareness of and encourage healthy living practices amongst Abu Dhabi residents.
Sep
26
More Young Americans Insured
Filed Under USA Health Insurance | Leave a Comment
While the United States’ political class continues to feverishly debate the merits of government involvement in healthcare and insurance, one key demographic has seen a considerable improvement in coverage since several provisions from President Obama’s contentious Affordable Care Act were put into place in 2010. According to two recently released surveys, one by the government and another by Gallup, nearly one million young adults have gained health insurance in the US within the past year.
Health insurance in the United States is primarily provided through private sector employers. This has meant that citizens classified as young adults, aged 18 to 25 and traditionally the most likely to be either be unemployed, underemployed or still in school, have been the demographic group with the lowest proportion of health insurance policyholders in the country. A key provision of the Obama Administration’s Health Care Reform Act has given citizens in that age range more coverage options. Starting in September last year, young adults can stay covered as a dependent under their parent’s family health insurance plan until they are 26 years old, enabling the mass of college graduates encountering a difficult job market to maintain some valuable security. Young adults are able to stay on a family plan even if they no longer live with their parents, are not a student, listed as a dependent on a parent’s tax return, or even married.
Under the previous law, dependent children were generally removed from a parent’s coverage when they reached a cut-off age (usually 19) or graduated college. These young workers would then largely abstain from coverage as starting positions frequently do not have extensive health benefits nor adequate wages to afford an individual health insurance policy.
According to data released by the Centers for Disease Control and Prevention (CDC), by the end of the first quarter of 2011 the number of uninsured adults in the 19-to-25 age bracket had decreased by 900,000 over the same period last year, moving from 33.9 percent of all young adults (10 million) in 2010 to 30.4 percent (9.1 million) this year. The CDC report, the National Health Interview Survey, interviewed more than 20,000 people from January through March and noted that the increase in insurance coverage amongst younger working-age Americans may continue through the remainder of the year. For every other age group surveyed, the proportion without health insurance actually increased, in conjunction with rising unemployment figures and contracting employer margins. The CDC noted that for the first time in over a decade, the 18-to-24 year old group was not the least insured group in the United States, having now been overtaken by other working-age Americans who are between 25 to 34 years old.
The CDC report reinforced findings made by the US Census Bureau last week, which reported that the percentage of young adults without health insurance cover dropped by 2 percentage points in 2010, to 27.2 percent overall. The Census Bureau uses different testing methodology to the CDC but that result still translates to 502,000 fewer uninsured 18-to-24 year olds in the United States over the past year. The Census numbers further revealed that young adults were the only group who gained coverage through private employer policies (possibly though their parent’s plans), and not government programs. A separate forecast by the Department of Health and Human Services last year, came between both government surveys, projecting that 650,000 young adults would gain coverage in 2011 due to the healthcare reform act.
A survey conducted by independent polling firm Gallup found similar rates of insurance amongst American young adults in the second quarter of 2011, giving valuable credence to the government’s assessment. Gallup’s data incorporated 89,857 interviews between April 1 and June 30 and found that the number of uninsured Americans ages 18 to 25 went down to about one in four (24.2 percent) from upwards of the 28 percent last reported in the third quarter of 2010. According to Gallup, this is near the lowest rate measured for this age group since the firm started to monitor health insurance coverage rates in 2008.
Neither survey explicitly linked the rise in insurance coverage amongst young adult Americans to the recent changes in healthcare law. However, when paired with stagnant unemployment numbers and falling health insurance rates elsewhere, it becomes more apparent that lifting age-restrictions to family cover has had a profound affect on the statistics. Allies of the Obama Administration’s agenda have been quick to use this data to demonstrate the positive role more proactive government policy can have in increasing insurance coverage in the USA. Last week, Kathleen Sebelius, Health and Human Services secretary, explained in a statement that young Americans would now be able to choose their career path without fear of dropped coverage or inadequate benefits. “This is a reminder the difference the Affordable Care Act is making in the lives of Americans …Where would we be if the inventors of Facebook had taken a desk job just to get health insurance,” Sebelius said.
Young adults, when given appropriate information and resources, are certainly interested in buying insurance and taking the necessary steps to protect themselves and their future. The rise in insurance awareness amongst younger working-age people is a trend being experienced worldwide. According to recent studies commissioned by Swiss Re and ING, the next generation of consumers in emerging Asian powerhouse markets India and China have become increasingly risk averse, more aware of the benefits of insurance, and willing to purchase cost-effective policies. For the international insurance industry, these younger clients are not only the future buyers of insurance, they also represent a tremendous business opportunity right now.
Organizations Mentioned
CDC
The Centers for Disease Control and Prevention (CDC) is a part of the U.S. Department of Health and Human Services. The CDC is the primary Federal agency responsible for executing and supporting public health initiatives in the United States of America.
Gallup
Gallup Inc. was founded in 1935 and has grown to become one of the world’s leading polling, research and consulting organizations. The firm today employs thousands of industry specialists and provides its services through the internet, Gallup University campuses, and through 40 offices stationed around the world.
Sep
23
AXA partners with Wasilah in Saudi Arabia
Filed Under AXA PPP, Middle East | 1 Comment
This week, Europe’s second largest insurer AXA selected Wasilah Insurance Agency to be its new business partner in the Kingdom of Saudi Arabia. The deal comes as part of the French insurance giant’s plans to further develop and promote its products in the Gulf region.
On September 20th 2011, AXA Cooperative Insurance Company, the French insurer’s Saudi Arabia-based shareholding company, signed a 10 year renewable agency contract with Wasilah Insurance Agency. Through this partnership, Wasilah has been given exclusive rights to market, distribute and sell all AXA-branded insurance products currently offered in Saudi Arabia.
AXA has been a key player in the Gulf and Middle East for over 60 years, offering a wide range of insurance products and services for corporate and individual clients in the region. In 2008, the company formed a co-operative insurance subsidiary in Saudi Arabia, called AXA Cooperative, and launched their company’s Initial Public Offering, which was over 5 times over-subscribed, in April 2009. Initially licensed to cover only motor and health policies, the insurer received final regulatory approval from The Saudi Arabian Monetary Agency (SAMA) last year to fully carry out its cooperative insurance and reinsurance business in the Kingdom of Saudi Arabia.
AXA’s interest in developing a greater presence in Saudi Arabia is well founded. With a population exceeding 27 million people, Saudi Arabia is the largest market in the GCC, and the insurance sector has developed substantially since the business was first permitted in the 1990s. Driven by strong macroeconomic performance (tied to a global rise in oil prices), rising income levels and positive demographic trends, the Saudi insurance market has grown by double digits for the past 5 years. In 2010, the Kingdom’s insurance sector grew by a further 12.2 percent, passing SAR 16.4 Billion (US$ 4.4 Billion) in gross insurance premium. This has all happened while the Kingdom’s non-life and life insurance penetration, at 1.0 percent and 0.1 percent, remain amongst the lowest in the region.
According to a recent report by Alpen Capital, Saudi Arabia’s insurance sector could reach US$9.24 billion in total written premiums by 2015 at an 18 percent combined annual growth rate. Due to an ageing population and regulatory initiatives, Saudi Arabia will be the only GCC market in which sales of new life insurance policies are expected to grow faster than that of non-life products. While the main business lines in the Saudi insurance industry have been health insurance and motor insurance retail cover, takaful insurance also has a significant presence in the Kingdom and their continued development will improve awareness and acceptance towards other lines of insurance in the region. Increased participation from the international private sector is also expected to yield additional positive returns.
This anticipated surge in demand for international insurance expertise in Saudi Arabia has pushed AXA to both improve upon their product portfolio in the region and seek out local business partners to enhance their immediate distribution platform. AXA’s new policies in Saudi Arabia will primarily cover retail products, but also will cater to the Kingdom’s growing SME sector. The new lines of business will include motor, property, marine and medical insurance as well as other protection options.
Through their new tie-in with Wasilah, AXA’s products will initially be sold through the agency’s headquarters in Riyadh. Within the next three years this network will be expanded significantly across the Kingdom, with around ten more agencies scheduled to be opened in Jeddah, Riyadh and Dammam. Wasilah’s head office in Riyadh will be responsible for supporting all new branches in addition to supervising its overall operations.
Speaking at the signing ceremony, AXA Cooperative Director Jerome Droesch asserted that their new partnership with Wasilah would give AXA the necessary edge to capitalize on Saudi Arabia’s remarkable market potential and take on the three leading players (Tawuniya, Medgulf and Bupa Arabia) in the retail and SME insurance sectors. “We see tremendous growth coming from KSA. We were very pleased to be granted our insurance license last year. Wasilah Insurance is a fitting partner to promote AXA Cooperative Insurance’s products and services in the Kingdom and they will be a key contributor towards our gaining dominance in the Personal Lines and SME line of business. It should represent as much as 15 percent of AXA Cooperative premiums in 3 years,” Droesch said.
According to Business Monitor International estimates, the Saudi population is one of the fastest growing in the world and is estimated to double by 2023. This substantial increase in the population not only increases the probability of insurance policies being taken out but also the number of Saudi locals able to work in the industry. Droesch explained that AXA would work hard to ensure the development of their insurance business contributed to the overall economic growth of Saudi Arabia. “This partnership shows that AXA will continue to invest in the region and our focus will be to seize the huge potential this market has to offer. We will leverage our international expertise and adapt our services and offerings to suit the local Saudi clientele. We will also continue investing in our employees and will use the large pool of well educated Saudi nationals as a prime source of recruitment and expertise,” Droesch remarked.
Khalid Al Rubaian, Board Member and Owner of Wasilah Insurance Agency, welcomed AXA’s involvement with his agency. Wasilah is a newly licensed agent but staffed with experienced insurance industry professionals, and with the right product portfolio could excel in the Saudi market.“I’m sure with AXA international expertise and the experience and knowledge of the Wasilah Board and Management supported by insurance matter experts with locally based expertise of international quality and standards; we will make a difference in the industry,” Al Rubaian.
AXA Cooperative Managing Director Paul Adamson, concluded the event, saying that their upcoming partnership with Wasilah brought them one step closer to fulfilling their overall commitment to expand AXA’s operations throughout the Middle East and match the evolving needs of their international clients. “Our customers will now be able to access us quicker and more easily…We trust that this reputation will carry us forward as we continue to grow and introduce new products to the kingdom,” Adamson said.
Insurance Companies Mentioned
AXA
AXA Group is a worldwide leader in Financial Services. Headquartered in Paris, the AXA Group companies are engaged in life insurance, health insurance and asset management services among others. AXA’s operations are diverse geographically, with major operations in Europe, North America and the Asia/Pacific area.
Wasilah Insurance Agency
Wasilah Insurance Agency is a newly licensed insurance agency, providing multiple types of coverage options in the Kingdom of Saudi Arabia. The headquarters are based in Riyadh and additional 2 regional offices are scheduled to open in Jeddah and Dammam in 2012.
Sep
22
Asia’s Middle Class Seeks More Protection
Filed Under Asia | 8 Comments
A new research document released this week by ING has found that more than half of Asia’s emerging middle class are planning to buy an additional insurance policy over the next 12 months due to a wide assortment of regional social and economic factors.
The ING Investor Dashboard has been published for the past three years by ING Investment Management as part of their quarterly study of investor confidence and activities among middle-income customers in 11 key markets across the Asia Pacific region, including China, Hong Kong, India, Indonesia, Korea, Malaysia, the Philippines, Singapore, Taiwan, Thailand and Japan. Starting this year, ING began tracking insurance purchasing behavior and other middle-class lifestyle choices in a parallel study, titled ING Insurance Dashboard. The inaugural insurance survey was conducted in June 2011 and involved online interviews with over 2,300 middle-income investors, aged 25 years and above, from China, Hong Kong, India, Korea, Malaysia, Thailand and Japan. ING used international and independent research firm Nielsen to conduct the survey.
The findings of the ING Insurance Dashboard report, released on Wednesday Sept 21, revealed that 82 percent of all middle income Asian citizens have felt a greater need to protect their lifestyle in the past year due to a stagnant macroeconomic climate, uncertain income conditions and political changes (in Thailand and Japan), amongst other factors. This perceived threat of potential economic downturn has driven many to consider additional coverage options. Over half of all respondents (52 percent) claimed they were planning to buy a new insurance policy sometime in the next 12 months. Among the seven countries surveyed, India appeared the most willing to seek coverage with 85 percent of respondents worried about a lifestyle coverage shortfall and 75 percent planning to purchase insurance soon.
According to the ING Insurance Dashboard report, the top three reasons middle class Asians are saving today are to protect family income and to provide for retirement and their children’s education. These driving factors were relatively consistent across the Asian countries surveyed, with the exception of respondents from Hong Kong and Thailand, who intimated that purchasing a home and starting a business were also prime reasons for saving. The study also revealed that parents across Asia are starting to save for their children earlier, with over 45 percent of Indian respondents starting to save when their kids are between 0 and 3 years old. There is also a growing awareness of alternative insurance and savings plans like takaful and micro-insurance.
ING Insurance Asia Pacific Chief Executive Frank Koster explained in a press briefing that the survey’s results demonstrated how far the average middle class Asian consumer had progressed in terms of insurance awareness and lifestyle expectations. “This is in line with our experience. Asia’s growing middle class is looking for more protection to ensure they can maintain their lifestyles in the face of uncertainty and an increased awareness of the benefits of insurance,” Koster remarked.
The survey’s data also indicated that spiraling healthcare costs (particularly amongst respondents from China, Hong Kong, Malaysia and Thailand), combined with changes in the domestic sphere (China, India, Korea and Malaysia) were driving Asia’s middle income earners to increase their insurance coverage. These changes in consumer attitude towards insurance are all happening incredibly quickly. The survey showed, for instance, that 83 percent of all Malaysian consumers believed that there is now a much greater need to protect their lifestyles now than compared to 12 months ago. Overall, the rise in income, healthcare, education and housing opportunities across most of Asia, has given individuals and families in the region greater access to a lifestyle they would now like to protect.
Elaborating further on the report, Frank Koster said that combined insurance and savings products had become a popular choice for middle-income Asian families looking to address future concerns and a present shortfall in coverage. “Insurance policies with savings plans attached are proving to be the product that meets this demand. These policies are proving to be an accessible and affordable wealth management and protection product, for Asia’s growing number of middle income earners,” Koster noted.
The purchasing habits of Asia’s emerging middle class are already having a profound effect on the global insurance markets. ING cited Swiss Re’s latest sigma study, which showed that life insurance premium volume increased by 13 percent across Asia in 2010, more than doubling the 6 percent growth rate reported for the rest of the world for last year. This trend looks set to continue as insurers begin to introduce more elaborate wealth management products to meet the increased spending power now present in the Asia Pacific region. As more and more middle class Asian families secure a lifestyle and assets worth protecting, their income appreciates and becomes able to afford more robust wealth management and investment services.
The report concludes by saying that the continued rise of the insurance sector in Asia will not only help it’s citizens handle day-to-day issues but could also prove integral to the continued economic and social development for the region as well “People in Asia are obviously interested in looking after themselves and the lifestyle that they lead, and importantly, the opportunities they can create for themselves tomorrow,” Koster finished.
Insurance Companies Mentioned
ING
ING is a global financial institution of Dutch origin offering banking, investment, life insurance and retirement services serving more than 85 million private, corporate and institutional customers in Europe, North and Latin America, Asia and Australia. ING Group is active in banking, investment management, life insurance and retirement services across 14 major economies in the Asia Pacific region, employing over 23,000 staff.
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.
Sep
21
Whittington Group, the Singapore-based international insurance investment conglomerate, announced today that it had reached a definitive agreement to sell off its British businesses to an international consortium of specialist insurers. The move follows similar actions taken by other players in the United Kingdom insurance market, as firms look to divest stagnant business lines to finance expansion in other parts of the world.
The announcement of a definitive sale agreement has ended a long-running evaluation process that had seen more than a dozen potential suitors assessed by Whittington Group over the past year. The consortium that was finally agreed upon by Whittington has been lead by London-based specialist insurer Tawa PLC, and also includes Norwegian marine insurer Skuld as well as Bermuda-domiciled insurance and reinsurance holding company Paraline Group PLC. The terms of the deal have not yet been disclosed, but are not thought to be far off Whittington’s initial £37 million (US$60 million) appraisal of its businesses. The transaction is now pending the approval of Lloyd’s and the UK Financial Services Authority (FSA) and would be expected to close before the end of 2011.
The deal will see the consortium acquire Whittington Insurance Markets Limited (WIM) and its UK subsidiaries, including Whittington Capital Management Limited, an important provider of turnkey managing agency services to new and existing syndicates at Lloyd’s of London. Upon completion of the transaction, a new management team, led by current Whittington chief executive Stephen Cane, will become equity investors in the acquired company.
In a statement Cane welcomed his new business partners and heralded their investment as an important step in the further development of the company: “We are extremely pleased with the acquisition by the consortium and also with the opportunity to participate in the ownership of our company. Each of the partners will provide strength and stability to our business. With the support of our new ownership group, we will also now have the ability to provide capital to selected new entrants to Lloyd’s.”
The chief executive for Tawa, Gilles Erulin meanwhile described the acquisition of WIM as a coup. Having an established presence in Lloyd’s turnkey system could prove to be an effective and cost efficient way to bolster their services in the company insurance market. “This transaction provides us with a platform through which to expand our range of services to the Lloyd’s community. Whittington is the leading franchise in the Lloyd’s agency management market and provides us with real scale as a provider of live insurance services. This is highly complementary with the range of consulting and outsourcing services currently provided through Pro, and we look forward to developing these businesses in tandem with one another,” Mr. Erulin commented.
Turnkey syndicates are managed by third parties on behalf of capacity providers and are integral in providing cover for large companies as well as small and medium enterprises. Whittington currently manages six key syndicates at Lloyd’s: WR Berkley, Channel Syndicate 1915, the Goldman Sachs-backed Arrow Syndicate, Sirius Syndicate 1945, and two recent transfers from Alterra Capital; Syndicates 2525 and 2526. The combined capacity of these syndicates totaled approximately £500 million (US$785 million) for the 2011 year of account. At the end of 2010 WIM’s consolidated profits before tax were £4.6 million (US$ 7.2 million) with net assets worth £3.5 million (US$5.5 million).
The addition of Whittington’s Lloyd’s platforms has come during a busy period of acquisition for Tawa, which has seen it buy up run-off insurers like Oslo Reinsurance and Bermuda’s Island Capital, as well as the £38 million purchase of Swiss Re’s P&C legacy business Pro in 2009. Tawa, long focused on run-off management, has been looking to expand and diversify its services portfolio, targeting higher margins over increased volume, and becoming a more traditional insurance business with recurring and reliable revenue streams. The company has become a service provider with developed platforms in the United States, Europe and now the Lloyd’s and company market in London.
For the Whittington Group, CEO Anthony Holbrow explained in a statement that the deal would enable their firm to focus on developing its core business in Asia. “Our group’s focus has, for some time, been on developing our businesses in Asia and the sale of WIM in London will enable us to accelerate our ambitions in the region and focus our energies on the Asian insurance markets. This marks the end of 18 years in the London Market for Whittington Group and we thank our dedicated people and loyal clients for making WIM the attractive business that has it has become.”
Whittington moved their headquarters to Singapore in 2006 and has been selling off their assorted turnkey operations to free up capital for further activity in the Asia Pacific region. The Group’s largest project to date is a direct online motor business in Singapore called DirectAsia.com, which they purchased in June 2010. This growing internet business combined with a rising regional middle class and motor pool presents an opportunity for a higher rate of return on capital. The emerging insurance markets in Asia are now widely expected to outperform that of other more mature Western markets, with India and China leading the way. Hobrow concludes that the Whittington Group is aware of this trend and is acting accordingly to shift their global focus and seize the opportunities a rising Asian middle class can provide. “There are plans to expand the DirectAsia.com brand into other markets in the region and the sale of our London business will certainly give our Asia operations an added impetus.”
Insurance Companies Mentioned
Whittington Group
The Whittington Group offers global capital and consultancy services to non-life insurance businesses, in the areas of start-up, growth, exit, outsource, run-off administration, and office accommodation and infrastructure. The company was founded in 2005 and is based in Singapore.
Tawa
Tawa PLC specializes in acquiring and developing the run-off portfolios of insurance and reinsurance companies, as well as introducing its own products to serve the international insurance market. Tawa was founded in 2001 and is a United Kingdom-based company.
Sep
20
India looks set to continue being one of the fastest growing insurance markets over the next decade, with rising income levels and awareness of risk management expected to drive a considerable demand for coverage solutions nationwide. Two new industry briefings released by India’s commerce chamber reveal that the country will be one of the few major insurance markets expected to deliver double digit growth rates across both life and non-life product lines, contributing around a tenth of total global premium growth by 2015. Indian insurers could furthermore make a significant mark and compete on the global stage if they are able to refine their business models and capitalize on the tremendous potential available in their home market.
The Associated Chambers of Commerce and Industry of India (ASSOCHAM), released statistics this week that forecast an 18 percent annual growth rate for India’s general insurance industry until 2015, with the market size increasing from US$9.8 billion at present to upwards of US$18.8 billion in five years time. Assocham based their industry projections on the increased consumer base for healthcare and automobiles, growth and investment in domestic small and medium enterprise, and a persistent demand for coverage options. “With this trajectory, India will be one of the fastest growing markets in Asia and globally – next only to China among major markets,” the report said.
According to Assocham, motor insurance will remain the largest business line in the non-life insurance sector, accounting for over 40 percent of the industry’s net premiums for the foreseeable future. India is slated to become the world’s third largest car market by 2020, behind China and the United States, with over 7 million automobiles expected to be sold annually in the country. This surge in supply in conjunction with updated road safety, coverage and infrastructure will drive growth in the motor insurance sector.
Increased spending on healthcare and infrastructure will also be integral to the further development of the general insurance industry in India. Total expenditure on healthcare, through government sponsored schemes and private sector activity, is expected to top US$200 billion by 2015 and this will create significant opportunities for the country’s emerging health insurance sector. According to Assocham Secretary General D.S. Rawat, through substantial investment and government involvement, health insurance may finally be gaining traction in India. “The health insurance segment will grow the fastest and account for close to 30 per cent of total industry premiums by 2015.” He remarked in the press briefing.
The Indian government’s upcoming 5-year economic plan, beginning April 2012, will call for nearly US$ 1 trillion in fresh infrastructure spending, updating and improving upon the country’s vast road, port, railway and power systems. This substantial investment will create many opportunities for the local insurance industry, which will need to provide cover for these new projects. Assocham predicts that engineering insurance coverage for new infrastructure projects will become a particularly important area for growth, and could develop further avenues for expansion across other commercial lines sectors as well. The private sector is also developing briskly, with the number of small and medium enterprises in India projected to rise by 20 to 22 percent over the next decade. The trade body noted that the number of companies competing in the general insurance market had already increased from 16 in 2007 to 24 in 2011, and more would be forthcoming as more government and private sector business opportunities emerge.
India’s life insurance market also presents significant growth potential. In a separate report, Assocham noted that the life sector’s annual gross written premiums of US$5.6 billion would grow by 13 to 14 percent annually and reach US$108 billion by 2015. Over the past decade, India’s life insurers reported a 28 percent rise in new business premiums, 27 percent in rise in annualized premium equivalent (APE) and a 25 percent increase in gross written premiums.
Assocham Secretary General D.S. Rawat, claimed however that while India’s life insurance market had already become one of the ten largest in the world, the local insurance industry still has to improve upon its performance standards. “The level of protection as measured by sum assured to GDP is about 55 percent relative to benchmarks in developed markets of 150 percent to 250 percent,” Rawat noted. India’s domestic insurance industry has been criticized for overtly focusing on selling short-term products and acquiring new business premiums at the expense of maintaining operational efficiency, profitability and customer retention. According to Assocham’s data, between September 2010 and March 2011, the life insurance industry has slowed down considerably, posting negative APE growth rates in successive quarters.
The Indian life insurance industry is of course learning from this. Insurers need to develop sustainable business models to solve their profitability issues and succeed in a more competitive market. Going forward, Assocham expects the industry will broaden their focus to readdress their agency model incentives to encourage selling more long-term savings and protection products to consumers. Insurance industry regulators are also likely to become involved in the near future to ensure that the Indian life market better conforms to international standards.
Assocham concludes their report by highlighting the rapid evolution of the Indian consumer and how this could affect the sale of insurance going forward. The emerging Indian middle class is at the forefront of the digital revolution, adopting the latest mobile technology and spending an increasing amount of their time and money digitally across networks. Over the next five years, mobile and internet driven micro-transactions in the country are projected to grow three to four times over. Thus it has become incumbent on insurers to enter this space to promote the value of insurance to consumers. Assocham believes this could in fact become a positive development for India’s insurance industry. “High-quality and low-cost broadband access through mobile and hand-held devices through 3G and 4G services will provide a unique opportunity to leap front legacy issues and drive innovations which can help unlock growth, reduce costs and enhance service levels.”
Organization Mentioned
ASSOCHAM
The Associated Chambers of Commerce and Industry of India (ASSOCHAM) is India’s premier apex chamber of commerce, with a membership encompassing over 200,0000 companies and professionals across the country. Assocham works to represent the interests of all industry and trade in India. The organization lobbies the national Government on policy issues and interfaces with corresponding international organizations to support bilateral economic interests. Assocham was established in 1920 by promoter chambers and represents all regions of India.
Sep
19
UAE Steps Up Medical Screening on Expats
Filed Under Expat Insurance, UAE Insurance | Leave a Comment
The United Arab Emirates’ large expatriate workforce will soon be subject to a comprehensive medical screening process before being admitted into the country as part of the government’s plan to stop the spread of contagious diseases amongst migrant workers in the Arab state. The new system will also curb the number of workers who slip into the UAE with fake certificates by mandating re-tests once they arrive in the UAE.
Starting on October 1 2011, expatriate workers from Indonesia and Sri Lanka will undergo preliminary screening for 16 medical conditions, including tuberculosis, hepatitis B, HIV/Aids and malaria, in their respective countries of origin before they can be approved for a visa to live or work in the UAE. Some specific categories of expatriates will also be further checked for additional non-infectious health issues such as diabetes, cancer and renal failure. Those who test positive for a specified illness at any of the 220 medical centers throughout Asia that are part of the Gulf Approved Medical Centers Association (GAMCA) will be refused entry into the Emirates. Migrant workers who pass the first screening will then be re-tested in the UAE upon their arrival to confirm results. These same tests will also become applicable for residence visa renewal. Visitors entering the UAE on tourist or visit visas however will be exempt from these new health requirements for now.
The screening process being implemented in the UAE is the first phase of the Gulf Co-operative Council’s (GCC) Expatriate Worker Medical Examination Program, which began in 1995 as a medical fitness system to track the spread of communicable diseases across the Gulf region. This standardized healthcare exam is currently used by Qatar, Oman, Kuwait and Saudi Arabia, and includes tests for HIV/Aids, pulmonary tuberculosis, leprosy and syphilis. All GCC visa applicants must also be up-to-date on all their vaccines, including Hepatitis A and B, influenza and the Rubella virus. The UAE is now the final GCC member country to put this program into action, a state that sees almost 1.7 million new expatriate workers head to the state every year. Now, in collaboration with the region’s leading physician’s advisory group, the GCC technical committee, routine checks will be held internationally to ensure that the highest health reporting standards are maintained and that all newcomers in UAE have genuine accreditation and are free of infectious diseases.
Indonesia and Sri Lanka were chosen as the first two countries to undergo the medical screening system after the GCC technical committee conducted a thorough inspection of their healthcare facilities. These two countries will serve as very useful pilot subjects, as there are currently an estimated 250,000 Sri Lankan and 100,000 Indonesian expatriates working in the UAE. After a three-to-six month evaluation period, the program will be extended towards migrant labor from at least eight other Asian and African countries, including India, Pakistan, Bangladesh, Ethiopia, Nepal, Egypt, Sudan and the Philippines.
Health officials have long expressed concern about the spread of infectious disease among migrant workers in the Gulf, and in particular tuberculosis. The World Health Organization (WHO) has warned that new strains of tuberculosis and other drug resistance diseases have increased globally over the past few years, with new cases occurring most prominently in South Asia, a region that supplies the Gulf with many of its workers. According to the UAE Ministry of Health’s 2009 data, over 21 percent of all Asian expatriates screened for visa renewal tested positive for TB while in the country.
The UAE’s Ministry of Health explained in a statement that the new testing regime was necessary to both prevent the spread of disease and keep adequate records of migrant labor in the Emirates. “The new procedures will positively affect public health and eliminate diseases among newcomers to the UAE who are either coming for work or residence…The most important reason for the implementation of the program in the country of origin is to discover diseases in a suitable time. This achieves the highest protection grades.” The UAE’s previous immigration rules called for similar medical checks for expatriates before securing a visa. However, immigrants were allowed to enter the country and wait for up to a month before the screening process and this could’ve contributed to the spread of communicable diseases in the UAE before the diagnosis was made.
According to the Ministry of Health, instituting a thorough double check process by both the home country and UAE will work to curtail fraud and will lessen the stress and expenses on the UAE healthcare system, which has to treat all patients with communicable diseases at great cost before deporting them. Many of these sickly immigrants would not have been able to fulfill their job commitments in their present condition anyway. The number of people waiting to get tested is also expected to drop as expatriate workers will be deterred from trying to get into the country with faked test results. As part of the GCC’s regional expatriate testing initiative, all screening centers, embassies and consulates are connected through a computer system to ensure transparency and improve security. Health centers found issuing fraudulent health certificates and medical reports will have their license revoked and be fined thousands of dollars.
“Double-testing will positively affect public health and eliminate diseases brought in,” said Salem Darmaki, Acting Undersecretary at the Ministry of Health, at a press conference in Dubai on Wednesday, concluding that “We hope these procedures have a positive impact on public health in society to eliminate diseases among newcomers to the UAE, and reduce the psychological and financial burden in case they fail to obtain a residency visa.”
Sep
16
US Census Shows Little Change in Number of Uninsured Americans
Filed Under USA Health Insurance | 2 Comments
New Statistics released this week by the U.S. Census Bureau reveals that health insurance has remained stagnant in the United States, with citizens failing to increase their coverage due to more pressing economic concerns.
According to the report, titled Income, Poverty and Health Insurance Coverage in the United States: 2010, 49.9 million Americans or 16.3 percent of the total US population had no health insurance in 2010. That percentage represents a slight increase on 2009’s figures, when 49 million citizens or 16.1 percent of the population was uninsured. The Census report noted that their 2010 data represents the first full year after the recession that officially ended in June 2009, and could thus be compared to similar periods after the end of other recessions in the past. The report noted that the year following the most recent recession showed no major difference in the uninsured rate, while in the years following the recessions that ended in 1991 and 2001, the uninsured rate in the US increased more substantially.
While there was no significant shift in numbers this year, the percentage of Americans covered by private health insurance policies has continued along its decade long decline. The Census data showed that the rate of private coverage decreased from 64.5 percent in 2009 to 64 percent in 2010. The number of people covered by private health insurance in the United States stands at 195.9 million people, still the largest insurance market in the world but the rate of private coverage has been decreasing since 2001.
The increased number of uninsured Americans has been largely attributed to the continued decline in the availability of employer-sponsored health insurance. Private sector employers have long been the bedrock provider of health insurance benefits for working Americans and their families. Although the US population has grown from 279.5 million to 306.1 million in the past decade, the percentage of employment-based healthcare coverage has decreased every year since 2000, from 64 percent and 179.9 million people, down to 55.3 percent covering 169.3 million people in 2010.
The proportion of job-related coverage available in the US has been dropping due to rising insurance premiums, unemployment and adverse economic conditions. Employers have also attempted to shift rising healthcare costs to workers, making insurance less affordable. Furthermore, in a recession with high unemployment rates, many employers find themselves in a position where they no longer need to provide cost-effective health benefits to attract or retain employees. According to the census data, around 14.3 million or 15 percent of all full-time employees were uninsured. Of those Americans not working, 28.5 percent were without healthcare coverage in 2010, roughly the same percentage as 13.7 million part-time workers in the country.
The number of uninsured may in fact have been greater had it not been for the increased presence of US government insurance programs (including Medicare, Medicaid, TRICARE and Children’s Health Care Program), which have mitigated the coverage shortfall considerably. According to the Census report, the number of Americans covered by government health insurance programs increased to 95 million people in 2010, up from 93.2 million in 2009. The percentage of people covered by these programs has now increased for the fourth consecutive year, rising to 31 percent in 2010 from 30.6 percent in 2009. Last year Medicare and Medicare enrolled a record number of beneficiaries, with 48.6 million and 44.3 million incoming people, respectively. These state coverage programs are set to expand further through upcoming healthcare reforms but it is yet to be determined whether or not they can handle the influx of people who now lack employer-based coverage.
According to the Census data, the rate of health insurance coverage in the US remains divided by ethnicity, geography and income. Nationwide statistics remained relatively unchanged this year with 30.7 percent of all Hispanics uninsured, followed by 20.8 percent of blacks, 18.1 percent of Asians and 11.7 percent of whites. The South continued to lead all regions with 19.1 percent of its resident population lacking health insurance. Those with household incomes below US$25,000 accounted for the highest rate of uninsured, at 27 percent, while households earning over US$75,000 annually comprised only 8 percent. Why these relatively wealthy 8 percent have not purchased health insurance is not answered.
The Census Bureau did note one demographic that managed a notable increase in cover over the past year and that is young people. The number of uninsured among 18 to 24 year olds, commonly the least likely to be employed and have coverage, declined by 2 percent from 2009 to 2010. The US Secretary of Health and Human Services Kathleen Sebelius attributed this promising statistic to one aspect of the federal Affordable Care Act that had already been put into place. Starting last year, dependents could stay covered under their parent’s health insurance plan until they were 26 years old, which has enabled graduates encountering a difficult job market to maintain some valuable security. “The report showed that the percentage of young adults with insurance increased from 70.7 percent in 2009 to 72.8 percent in 2010. That translates into 500,000 more young people with insurance. We expect even more will gain coverage in 2011 when the policy is fully phased in,” Sebelius noted on the department blog.
It remains unclear how the remaining provisions in the Obama Administration’s Affordable Care Act will impact these coverage stats, with many important facets still being debated on a political level and in the courts. Under the Affordable Care Act nearly all American citizens would have to carry health insurance in 2014 or else face a fine. The federal law will require that the general public have insurance policies which meet certain minimum benchmarks, more sufficient than basic catastrophic coverage and preventive services. This individual mandate is currently facing legal challenges in 26 states which contend that the United States government cannot compel its citizens to engage in such commerce. Two federal courts have already ruled that the mandate violates the Constitution, and the US Supreme Court is ultimately expected to decide upon the contentious issue soon. As we get closer to the inception date for these important healthcare policies, expect the annual Census reports to reveal more telling data that determines whether in fact such reforms will work for the average American.
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