Posted on Dec 11, 2012 by Sergio Ulloa
Leading international health insurance provider, IHI Bupa
recently announced their premium increases for 2013, which have come in at the lowest percentage increase recorded by the company in five years. This tapering off of increasing health insurance premiums is a trend that seems to be occurring across the health insurance industry. Globalsurance, one of the largest distributors of IHI Bupa plans
, has seen many other providers offering premiums that are slowing down in their rate of increase and believes this is likely due to falling medical inflation worldwide.
For more than 30 years, IHI Bupa has been a leading provider of international health insurance policies for expatriates and high-net worth individuals all over the world. Distributors and customers all tout IHI Bupa to be one of the best in the industry, and the company has formed an especially strong presence in Asia. Their policies include coverage in all parts of the world, including in the USA and are guaranteed renewable for life, an option that other providers are often apprehensive about offering.
During the past five years, IHI Bupa premiums for its 'International Health and Hospitalization Plan' (IHHP), one of the company's most popular plans, have been increasing at a rate of about 13% per year. For 2013, premiums will only increase by 8.5%, a rate that is in line with many other leading international health insurance providers, including Allianz, Aetna and AXA PPP.
China and Hong Kong have seen some of the highest increases for health insurance inflation over the past 5 years, and the slowing of increasing premium rates is expected to be welcomed by policyholders across the region.
"We have had real problems in Asia over the past few years with the cost of medical insurance policies and the amount by which they go up every year. It is hard to explain to clients why their medical insurance policy is going up at over 10% each year when their salary is not doing the same. But the reality here in Hong Kong is that the cost of treatment in leading facilities and by leading doctors has been quickly increasing. Patients and clients recognise this but they do not make the connection to their insurance premium," commented Neil Raymond, CEO of Globalsurance.
The high cost of treatment in these areas has typically resulted from a series of structural issues in Hong Kong and China's market. For example, many of the hospitals and clinics in Hong Kong and China could easily fill every appointment slot and beds many times over, so facilities often test the limit of patients by increasing the cost of treatments. While many patients may have comprehensive health insurance
that will cover the costs of these cost increases, hospitals and doctors still benefit from increasing the cost of their treatments and services and are therefore more inclined to further increase costs.
Additionally, there appears to be a trend of facilities and doctors prescribing treatments that may be medically unnecessary, especially in Hong Kong. One example is the high number of C-sections in Hong Kong, where surgeons are quick to suggest and perform these procedures that are more costly than natural births. As such, the latest rate adjustments among many insurers, including IHI Bupa are even more attractive to customers.
IHI Bupa offers a variety of plans in the Asian market and while the IHHP plan remains the most popular, other plans are experiencing some small increases across their premiums. The International Swiss Medical policy (ISM) premium is scheduled to increase by about 11% for 2013, and while this rate is lower than that of previous years it still remains higher than the IHHP plan. IHI Bupa's travel plans have also been popular in Asia, mostly because of the unlimited medical coverage benefit, and premiums are not scheduled to increase.
Another strong point for IHI Bupa is that in 2013, no major changes are being made to the plans and the benefits on offer. After the company purchased IHI Denmark in 2004, some adjustments had to be made to certain plans that could not keep up with medical inflation,in particular with out-patient treatments. With this, some plans experienced a decrease in value to customers. However, fortunately for IHI Bupa, most policyholders look to premium increases rather than benefits changes when deciding whether they will renew their policy or not.
Policy wordings for the next year have not been downgraded, and the increased competition in the region has forced IHI Bupa to ensure their health insurance products provide the best coverage options for the best value for their policyholders and potential new clients. Many other companies, including Zurich, AXA Hong Kong, Cigna, Allianz and Now Health, are working hard in China and Hong Kong to acquire more market share, meaning customers will continue to have more options for healthcare coverage in Asia.
Mr Raymond commented: "I think part of the reason for the slowdown in health insurance rates is due to the global pace of the economy, but I think it is also being driven by increased competition. US insurers are increasingly looking overseas for opportunities and companies like Cigna are very active...This means the incumbents have to focus on service and value to maintain their position which is ultimately positive for clients".
IHI Bupa are one of the strongest, most reputable brands in Asia and for customers looking for reliable, lifetime healthcare coverage
, they are one of the best options currently available in today's market. Globalsurance are confident that IHI Bupa's long-term success rates will be high but feels the company will need to continue to make sure that their plans stay competitive and current. However, given the company's long history, their market knowledge and unrivaled experience, they will undoubtedly continue to stay ahead of the game in Asia and elsewhere around the world.