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US Health Insurers Moving into China

Posted on Jun 27, 2008 by Sergio Ulloa ()

Recently, many major American insurers have looked to international markets for new customers.  Thus far, major insurers have primarily targeted the booming expatriate market as their source for international customers, often times establishing field offices to better serve them.  A prime example of this trend is in China, where household names such as Aetna, UnitedHealth Group and Wellpoint have all recently established field offices. The main reason for a growing expatriate segment in China is that various multi-national corporations are setting up shop to take advantage of China's booming economic growth.  According to Martha Temple, president of Aetna global benefits, China is "½a real hotbed place for large U.S. multinational or multinational corporations [from other nations] to open or expand their offices."  As a result, Insurance companies are cashing in by aggressively targeting expatriates. However, with the slowdown of the US economy, and China experiencing social changes such as a booming middle and upper class, insurers are now pondering the decision of whether or not to offer insurance to Chinese citizens.  More and more Chinese are looking for western "luxuries" such as private health insurance as they experience and enjoy their newfound wealth.  Even though China has a basic national health insurance plan, many of the middle class and well-to-do nationals would opt to supplement the national insurance plan with private insurance to have a wider range of coverage.  And with a population over 4 times the size of the United States, China may be a much needed supplement to insurer's US business. Interestingly, foreign insurers within China must have a field office open in the country for two years before it may start selling its products, as required by the Chinese government.  Aetna, which only recently opened its China office, needless to say, will have a lot to think about in this period.  Possibilities of what to sell are diverse.  Insurers could opt to sell non-insurance products such as wealth management plans, or offer abbreviated services such as case management or diseases management insurance.  In any case, the outcome of these insurers' decision will be an interesting one.
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