Posted on Nov 12, 2012 by Sergio Ulloa
November 8th marked the official re-branding of the AXA Minmetals Ultracare International Medical Insurance Plan in China with a new, updated name, ICBC AXA Ultracare. The move comes after the shift in the majority shareholding from Minmetals to ICBC.
This change is only one of a few to have occurred in regard to the ICBC medical plan in China
. Globalsurance CEO, Neil Raymond notes that these modifications are definitely steps in the right direction; "The ICBC AXA plan was the first true global health plan in China to be onshore and licensed, initially with RSA, then Minmetals and now finally ICBC. During this transition the plan has had its ups and downs but we feel very positive about the current changes," he said.
Some of the other changes that have taken effect refer to plan benefits and premiums. These changes are seen as a positive shift by analysts at Globalsurance, and they maintain optimistic outlooks that this plan will continue to perform well.
One of those positive outlooks includes the announcement that premiums in China will only increase by 5%, a considerably low rate. This comes as great news to policy holders as indicators show that global medical insurance inflation has been steadily increasing during the last few years so 5% is very low for China. In addition, the ICBC AXA plan is the country's oldest global type medical plan and the increase is the lowest recorded over the entire decade.
From 2005 to 2010, increases in premium costs were as high as 20% as rates of inflation within the medical industry in China were some of the highest in the world at the time. Insurers were all, for the most part, increasing premiums from 15 to 20% each year. One of the major factors for these increases involved the rising costs of care at some of the country's best facilities and internationally operated hospitals and clinics, including the United Family Healthcare facilities in Shanghai and Beijing. As the industry has stabilized, this has helped premium costs to also stabilize and analysts do not forecast such high levels of increases in the near future again.
Another benefit for customers and policyholders is that it is now possible to obtain an ICBC AXA plan on a 'Fully Medically Underwritten' (FMU) basis. This will particularly benefit those who have pre-existing medical conditions as a FMU plan offers policyholders the opportunity to have their conditions completely covered after underwriting, but this may still be subject to an additional or higher premium based on the medical condition and the associated risks. As a result of this, the ICBC AXA plan is now a key figure in the industry as previously, BUPA International were the only providers to offer this service. Furthermore, the ICBC AXA plan is now one of the only global providers to offer this unique service as well as Moratorium for international medical plans.
"I think this is great news for both expats and local Chinese nationals in China. Historically in China, if you were to suffer from a medical condition such as elevated cholesterol for example, it would have been impossible to receive cover and you would be considered uninsurable. Now however, both Bupa and ICBC AXA can cover you. This is a reflection of the development of the medical insurance market in China and how it is becoming much more sophisticated", Mr Raymond from Pacific Prime added.
Despite the reassurance of lower premiums, there are some negative aspects to these latest changes as some new restrictions have been put in place. For example, the plan was previously able to cover children on their own and independent of their parents, which was widely popular among Chinese customers. However, now due to poor underwriting results, this option no longer exists, except with a few intermediaries - including Globalsurance.
Mr Raymond noted that; "The plan is very open to abuse, particularly on the vaccination section of benefits and in most cases, the sales of a plan were a sure way to make a loss for ICBC AXA". He commented further; "however, Globalsurance is happy to continue to sell the plan based on good underwriting to limit the exposure of the insurer to the risk of antireflection".
Even though these slightly negative changes are present, Globalsurance analysts believe that the positive changes still outweigh the negative. In addition to lower premium increases, dental benefits will now also include coverage for teeth cleaning as part of coverage included within the Wellness benefit.
Mr Raymond is pleased with the changes that have occurred so far and stated that; "China is an increasingly competitive and sophisticated market for the International Health insurance industry but we believe the changes that have been made are positive so far".
With all these changes occurring, ICBC AXA customers can rest assured that their insurer is taking the right steps to keeping on top of such a challenging market.