Posted on Apr 01, 2011 by Sergio Ulloa
Cigna Inc, the leading international group health insurer for expatriates and other individuals traveling abroad, was today granted a license to operate in the Singapore health insurance market. The move reaffirms the company's commitment to developing its international business
for providing supplemental coverage products. The expansion of the Philadelphia-based health insurance company's operations into Singapore means the US insurer's global coverage network of around 900,000 hospitals, physicians and other healthcare professionals, is now working out of 28 different countries and jurisdictions.
As a fully licensed Singapore insurer, Cigna will bring their global healthcare expertise to the country. Locally-based sales and client management operations will allow the company to work more closely with Singapore businesses to develop appropriate health coverage solutions for both their domestic and international employees. Through an arrangement with Parkway Shenton, one of Singapore's largest private medical operators, Cigna will provide customers with comfortable access to quality healthcare services at competitive prices.
Entrance into the Singaporean insurance market was a priority for Cigna. The Managing Director for the Asia Pacific Region, Ken Vaughn announced in a press statement that the new Singapore-based offices would both enable the company to respond more effectively to the local market as well as internationally: "Our expansion into Singapore demonstrates our commitment to our clients and customers in the local market and their evolving needs in the international market," he said. The country hosts several thousand multinational companies who need coverage options for their employees, many of whom are globally mobile. The substantial local middle class population, who can well afford supplemental insurance policies, and the large expatriate workforce (estimated to be 110,000) further present avenues for growth. Mr. Vaughn further added: "Singapore is an important market for us because of its choice location within Asia and the fact that many of our clients and customers are located here."
Cigna's Singapore office is also of strategic international importance due to its location in Southeast Asia. The new operations are expected to improve communication and decision-making with the company's other branches in China and Hong Kong and strengthen Cigna's overall capacity to handle its clientele on a global scale. The company established a presence in China in 2003 through a joint venture with China Merchants Group. Today Cigna is estimated to have around 6 million clients in the Asia Pacific Region, with South Korea currently home to the most policyholders. International business rose 33 percent to US$ 243 million and totaled 19 percent of Cigna's adjusted earnings for 2010. Industry analysts predict Cigna's international operations could grow to become a third of the company's total business within the next three to five years.
Cigna has consistently been one of the most proactive American insurers looking to develop its presence in emerging Asian economies, with only Aetna Inc. also moving into China in the past few years. Both firms have been looking to increase their penetration in global insurance markets in order to offset the low growth forecast for the USA, in addition to the general unrest surrounding the 2010 US Health Reform Law, which will have a far-reaching impact on the industry and comes into effect in 2014.
Many insurance companies are in fact looking to diversify and potentially become larger conglomerates to better absorb upcoming changes in the once lucrative US market.
International markets offer an enticing post-reform growth opportunity for US based insurers. As the Asian healthcare market develops, Cigna plans to be at the forefront with an aggressive strategy to take advantage of the projected increasing demand for insurance policies that will provide better coverage than the government provided coverage plans in the region. India and Turkey have been identified by Cigna CEO David Cordani at a presentation in March to investors in New York as the next priority target markets to establish company partnerships in.
In an interview, Cigna's President of Cigna Expatriate Benefits Andrew Kielty, confirmed that work was underway for Cigna to establish an operation in India: "We are making good progress in India, but finding a long-term joint venture partner is a very delicate process and we can't predict at this point when that will happen."
Cigna is also interested in further growing its international business coverage options, selling expatriate healthcare products to multinational companies that are increasingly globalizing their operations. Cigna recently aquired Belgium's Vanbreda International in 2010
to give the firm increased access to the expatriate health insurance market in Europe and Asia. In January 2011, Cigna announced its intentions to increase expatriate benefit plans through its African operations.
Cigna yesterday announced a new individual international healthcare plan, titled Cigna Global Health Options. The policy is designed for individuals who are frequent travelers and want access to a high standard of medical care wherever they are around the world. The basic policy, which is expected to cost around US$ 4,500 a year, covers hospitalization, maternity care, surgical procedures, cancer treatment and emergency services. Customers can also customize their package through purchasing any of the four additional service options including: international medical insurance plus (outpatient), international vision and dental, international health and well-being, and international emergency evacuation. Cigna Global Health Options' clients will have access to a 24/7 customer service hotline to authorize treatment, guaranteed payment to hospitals, and handle all other customer inquiries related to the healthcare plan including claims and medical support.
Mr. Kielty explained the significance behind Cigna's decision to launch this new product: "We are pursuing a broader market of wealthy individuals who want to seek out the best possible health care," he added "The market for selling individual plans to expatriates is in excess of $1 billion. When you add in the broader high net-worth market, it's hard to say how high that goes."
This innovative plan marks Cigna's entrance first foray into the individual consumer market, having long established itself in the expatriate insurance industry through its sale of group policies to employers. Cigna Global Health Options will prove an important benchmark in measuring the company's growth into an even more comprehensive health insurance provider. Cigna Global Health Options is currently being marketed exclusively online but plans are underway for a more robust promotion strategy throughout 150 countries, including Cigna's new venture in Singapore.
Insurance Companies Mentioned
CIGNA Health Insurance is a global health service company dedicated to helping people improve their health, well being and sense of security. CIGNA Corporation's operating subsidiaries provide an integrated suite of medical, dental, behavioral health, pharmacy and vision care benefits, as well as group life, accident and disability insurance, to approximately 46 million people throughout the United States and around the world.