Posted on Dec 12, 2012 by Sergio Ulloa
Globalsurance has learned that Aviva Ltd is set to stop providing medical insurance products in Singapore
to some of its clients, potentially impacting 5,000 to 10,000 insured people on the IdealMedical and Global Health plans. It is understood that Bupa International and Raffles Health Insurance (RHI), who partner in Singapore, will offer Aviva clients the option to transfer to a new plan of similar design but with different premiums. The transfer appears not to be subject to underwriting, but personal exclusions on Aviva policies at the time of transfer will not be removed.
This news follows the October 26th, 2011 announcement
when Aviva Life Insurance Company Ltd in Hong Kong also stopped renewing its line of Global LifeCare health insurance plans. Unfortunately, the Hong Kong based company made the decision not to find alternative solutions for those with pre-existing conditions covered by Aviva and this left a number of customers with serious medical conditions that had developed during their policy, unable to find alternative medical protection.
Now, Globalsurance has learned that a similar situation is set to develop in Singapore with Aviva Ltd, a Singaporean based subsidiary of Aviva PLC, and all IdealMedical and Global Health insurance plans from February 2013 will not be renewed by Aviva. However, it is important to note that in this case, Aviva's exit from the affected medical plans in Singapore does differ and Bupa/RHI will be offering some degree of continuity of coverage. Aviva Global Health and IdealMedical policyholders will be offered the option of either RHI-Bupa Worldwide Health Options, or RHI-Bupa Health Select Asia Pacific products. The Health Select plan offers comparable benefits and seems to be designed specifically for the transfer of the Aviva clients whereas the Worldwide Health Option plan is already a part of the existing product range.
The premium rate implications of the transfer will depend on the individual client's ages and which plan they choose to select from; although it is understood from agents involved in the situation that in almost all cases, premiums will rise and increases will be significant.
The exact details of the transfer are not clear; however it does not appear that there will be a purchase of the Aviva book of business by Bupa/RHI, but rather an option for clients to switch to the new plan without underwriting as long as this request to transfer is made within the required time. The positioning of the transfer to clients should not be considered as a takeover of the portfolio of business; instead, clients can apply to update and change the policy details accordingly.
While Globalsurance is uncertain as to what the full impact of this decision by the Singaporean based company will be, it will undoubtedly affect a hefty portion of Aviva's portfolio in the country which in turn, will affect policyholders in respect of premiums and in some cases, on coverage. However, given the recent experience of Hong Kong based Aviva policyholders, the fact that consideration has been given to those with pre-existing conditions and that a possible solution has been arranged for them, can only be considered as a positive move. Should Aviva clients choose not to take up the higher cost plans, their policy will cease and current pre-existing conditions are likely to be excluded upon any subsequent application for further health insurance coverage
. This severely constricts policyholder's ability to find protection against what tend to be extremely costly medical conditions.
Former Hong Kong Aviva clients with serious illnesses may well be considering the arrangements that have been made in Singapore and feeling even more aggrieved that alternative solutions have been arranged for those on the Global Health and IdealMedical plans while those in Hong Kong were completely abandoned.
The move by Bupa
and RHI makes a significant statement of intent to develop and grow the health insurance business in Singapore, which can only be positive for the local health insurance market. The move to support former Aviva policyholders should also be considered as positive and should hopefully reassure health insurance policyholders.
Despite the option to transfer to Bupa coverage, all Aviva medical insurance policyholders around the world have a major cause for concern in light of Aviva's recent actions. The cessation of medical business in two major markets, in two consecutive years raises a number of fundamental questions about Aviva's long term viability in the worldwide medical insurance market.
Analysts are concerned that Aviva might not be able to adequately price medical insurance products, which could be contributing to higher than expected loss ratios for the company which in turn, have forced the exit from the part of the Singaporean medical business. However, if pricing is an issue for medical plans in Asia, then similar problems may be facing the rest of the Aviva medical portfolio, globally.
recommends that any individuals or organizations, currently holding an Aviva medical insurance policy, whether in Singapore or elsewhere around the world, contact their agent, broker, or provider to inquire about the continuing viability of their coverage.
At present, it cannot be predicted whether this trend will continue in the UK, however the indications are worrying with respect to the survivability of the company's medical plans and should pose major concerns for all customers of the company.