Cooper, Claridge-Ware Limited (“CCW”), a Hong Kong-based international health insurance brokerage, has released a report analyzing the sustainability of group medical insurance plans in the current economic climate.
The analysis found that international group medical insurance plans costing US$500,000 today will increase to an approximate cost of US$1,000,000 by 2020 – this is based on an average annual increase of 10 percent, leaving the US$500,000 policy costing US$974,358 by 2020 and US$1,071,794 by 2021.
Michael Lamb, marketing director for CCW and the author of the report, said, “We wanted to explore the options available to businesses in terms of cost containment for their medical insurance coverage in the Asia-Pacific region. Obviously a doubling of group medical insurance premiums over the next seven years is highly concerning, especially for SME's trying to recruit and retain vital talent amidst changing employee needs.”
One of the key points raised by the report is the fact that businesses throughout Asia are increasingly hiring a new type of expatriate employee: employees who often are much younger and on much lower benefits packages than their older colleagues. CCW has indicated that this is a major driver for change within the Asian employee benefits landscape as the new breed of modern expat worker has needs and requirements which are different from those which insurance providers have traditionally catered to.
Illustrating this fact, Mr. Lamb stated, “Full blown international private medical insurance (“iPMI”) products are often unneeded by younger expats who are increasingly happy using the local health care services in countries like Hong Kong. However, local health insurance options do not meet the standards of these individuals, or offer key extended benefits like psychiatric and maternity protection, which are often received outside the local health care services. This has seen the emergence of hybridized products which mix the flexibility of iPMI plans with the affordability of local plans, and can often be tailored to fit the exact needs of a specific company or organization.”
CCW has also indicated an emerging trend whereby health insurance companies and health care providers are starting to work together to offer multi-level offerings to expand the options available in relation to group health insurance coverage through innovative partnerships and out-of-country servicing.
The report concluded that group medical insurance can be sustainable if more flexibility and creativity is introduced to the market in line with the actual needs of companies throughout the Asia-Pacific region.
Victoria Spears
Victoria Prussen Spears is senior vice president of Meyerowitz Communications Inc., a law firm marketing communications consulting company. A graduate of Sarah Lawrence College and Brooklyn Law School, Ms. Spears was an attorney at a leading New York City law firm before joining Meyerowitz Communications. She may be contacted at [email protected].