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The Prime Times

News & Developments in International Health Insurance

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Nov 28, 2012

Munich Health newly branded Globality Health considered a success with Pacific Prime

Pacific Prime has been working closely with DKV Globality since 2009 when the Individual comprehensive health insurance plan became widely available in the market. Last month, the plan underwent a re-branding and was named Globality Health but will still remain a part of Munich Health, the international medical insurance segment…

Pacific Prime has been working closely with DKV Globality since 2009 when the Individual comprehensive health insurance plan became widely available in the market. Last month, the plan underwent a re-branding and was named Globality Health but will still remain a part of Munich Health, the international medical insurance segment of Munich Re.

The Globality Health plan is one of the most comprehensive and best-value-for-money plans currently available in the international health insurance market worldwide. There are three different levels of cover on offer; 'Classic', 'Plus' and 'Top'. The highest level, 'Top', not only has exceptional inpatient and outpatient coverage but the dental benefit and maternity benefits are among the best in the world available from any leading insurer.

The rates charged for the plan are highly competitive amongst others in the market; this has led to a very rapid take up of the plan by expatriates and high net worth individuals looking for coverage at the top end of the market. This is particularly true for those seeking to start a family where the pregnancy insurance coverage and waiting periods are very much the best and most competitive that can be found.

Mr. Christian Moore, a sales manager from Pacific Prime commented: "The Globality plan is clearly the stand out leader in the market in some segments, it has a trusted brand name and amazing benefits, the biggest challenge we have is on administration and claims handling".

Mr. Moore went on to explain: "... Globality are always very fair in assessing claims but the process can be very slow, they often contact doctors directly to get supporting information which can slow the process down, we also feel that the success of the plan has overwhelmed their IT and staff recourses". The approach taken by Globality on claims assessment is certainly usual when compared to other global expat insurers and Globality has always contacted the client's doctor on the first claim submitted to capture the patient history and thus rule out pre-existing conditions not declared on the application form. This, of course, slows the process down but it is very thorough.

Pacific Prime does see problems in the longer term with the Globality plans, and analysis of benefits and premiums indicates that there may be some material misalignment leading to plan losses when benchmarking against other key competitors. Of course, it is difficult to determine from an outsider perspective, without sitting in the actuaries shoes, who manages the plan but the first signs of this may already have arrived.

Globality adjust their premiums on the 1st of December every year and in 2011, rates moved upwards by approximately 10% which was in line with other insurers. However, the premium adjustment for 2012 will be around 19% for those on coverage 'Worldwide exUSA' and a staggering 35% percent for those living inHong Kong,China,Singapore andTaiwan. This new pricing zone for these 4 countries obviously reflects premium market adjustment rather than medical inflation.

Naturally, Pacific Prime clients will be very disappointed by the increase but a benchmark with competitors reveals that; even at these prices the plan remains good value in these countries. The policy structure makes it difficult for Globality to manage the plan, if it is performing poorly, in any other way other than to raise premiums as the benefits are grandfathered in and thus cannot be changed by the insurer, as Pacific Prime understands. This may be good for clients looking to utilize the high level of cover but it will mean that there may be significant premium rate increases in future years, until the plan is fairly priced and sustainable. In anticipation of this, Pacific Prime has been notifying all clients since 2009 that their plan may incur abnormal premium rises from when they initial brought the policy to ensure full discloser.

On the horizon, it also seems that Globality is going to be bringing in a new plan in the spring of 2013 aimed at the expat medical insurance market. The plan is likely to be structured to be more sustainable. Pacific Prime believes that Globality will be an important player in the overseas health insurance sector but that there will be some significant changes in the next 12-24 months.

Mr. Moore stated: "Ultimately, for any plan to be sustainable, it must be good for clients and profitable for insurers. We have seen around the world that Munich Health is looking to grow and we hope they can get the balance right on the Globality plans".
Nov 20, 2012

Pacific Prime sees more good news on Global Private Medical Insurance Inflation

AXA Winterthur in China and Healthcare International have recently released promising insurance increases for 2013. Both insurers published their premium rates for 2013, coming in at 10% and 9.5% respectively (this compares to a long term average of 11% globally and over 12% in China). Although at the higher end of a recent wave of rate revisions from leading players such as Bupa International and…

AXA Winterthur in China and Healthcare International have recently released promising insurance increases for 2013. Both insurers published their premium rates for 2013, coming in at 10% and 9.5% respectively (this compares to a long term average of 11% globally and over 12% in China). Although at the higher end of a recent wave of rate revisions from leading players such as Bupa International and Allianz Worldwide Care, the AXA Winterthur and Healthcare International figures are still below the 5 year trend.

AXA Winterthur offers three plans in China; a China only plan, an International plan and a Worldwide plan. Historically, the plans have been good value for money and the recently announced 10% increase continues to support this position. In fact, all key players in the China market who have published revised rates for 2013 have supported Pacific Prime's belief that the rate of medical insurance premium increases are falling in China to become more in line with the rest of the world. This follows the massive adjustment over the past 5 to 10 years where typically China clients have seen 20% year on year premium rises.

In addition to the October rate revision announcement, AXA Winterthur has also made improvements to certain benefits, namely in regard to Dental. A new dental benefit of RMB 5,000 (circa USD 800) is now on offer as part of the China plan and will have a co-pay of 25%. Furthermore, the International plan will now have RMB 8,000 (USD 1,200) and the Worldwide plan will have RMB 10,000 (USD 1,500) both with the same co-pay. The AXA Winterthur plan is targeted at the lower end expatriate market and higher end mass China market.

HealthCare International has always been a niche player in the International medical insurance market and has focused on delivering offshore only value for money solutions (achievable probably by creating a low operating cost base). The recent revisions in premiums for 2013 is certainly on trend in the market for next year but HCI has also downgraded some benefits in July of this year to achieve this. Namely, they have introduced co-pays at certain facilities in China, Hong Kong, USA, Dubai and France (countries with typically very high treatment costs). The co-pays range from 20-30% depending on the plan in question and apply to both Inpatient and Outpatient treatment as well as being made available to existing and new clients. Further to this, HCI has also reduced the Coverage outside Geographical Area benefit for the Emergency Plus, Standard and Healthcare Plus plans, by dropping it from 60 days to 30 days. Finally, on the same benefit, they have also introduced a co-pay of between 20-30% for treatment (inpatient and outpatient) for all plans.

Healthcare International has always adopted a very broad zoning policy and has not differentiated its premiums based on where someone lives or wants coverage (except for the USA). It would therefore appear that the above changes to benefits are targeted at clients receiving treatment in notoriously higher cost locations/facilities and at those traveling into high cost treatment areas and then making claims. The HCI approach as Pacific Prime sees it is in fact, an attempt to segment the market to give better value to those living in low cost areas such as Thailand, without bringing in a complicated zoning structure. HCI clients located in low cost areas will, to a large degree, not be impacted by the changes while those in higher cost areas may find the plan less attractive. However, this should not be an issue as those clients will be contributing a higher loss ratio anyway, so the above changes are a clever way to segment the market without global price zones.

AXA Winterthur and Healthcare International have performed well this year and Pacific Prime is confident they can continue to do so for the next coming year.

Nov 17, 2012

Now Health gaining traction with Pacific Prime across the Middle East and China.

After a cautious start, Pacific Prime , the world's leading distributor of International private health insurance, is beginning to work more closely with Now Health and has been impressed by the new organizations service and claims capabilities so far.

Now Health was launched in 2010 by a management team largely made up of former Goodhealth employees, notably the former Managing director…

After a cautious start, Pacific Prime , the world's leading distributor of International private health insurance, is beginning to work more closely with Now Health and has been impressed by the new organizations service and claims capabilities so far.

Now Health was launched in 2010 by a management team largely made up of former Goodhealth employees, notably the former Managing director of Goodhealth, Martin Garcia. Upon the sale of Goodhealth to Aetna, a large number of employees left and regrouped under the leadership of Mr Garcia with the intention of developing a new International private medical insurance company, this all came to pass in April 2011.

Now Health's intended USP's were focused around service and operation capabilities, which can only be delivered through outstanding Information Technology. To do this, a green field development of a completely new servicing platform was required to reflect the current requirements of the iPMI world, not an easy undertaking. This has only been made possible by leveraging off the 20 years of experience Mr Garcia and his team have had in the industry and using this to mould the IT platform. Based on Pacific Prime's experiences in the past 12 months, it would appear that Now Health has indeed developed a new leading edge in service capability.

Pacific Prime's CEO Neil Raymond commented; "We naturally take a cautious approach to any new insurers or products in the market in order to protect our clients and typically, we have a wait and see approach. Over the past 12 months, we have gradually built up a client base with Now Health and can honestly say they have exceeded our expectations".

Now Health's new servicing platform has an ability to manage and process all documentation and information to process iPMI at all stages, from initial application through to policy issuance and claims and renewal processing in an effective and speedy manner. Quality customer service runs high in Now's priorities and such accessible, easy-to-use online tools, as well as a platform to chat to an online representative, allow the company to constantly provide the help their customers require. In fact, Mr Raymond believes that Now's system is probably the most advanced in the current market and gives Now Health a clear competitive advantage in today's service driven world.

Also important to note is the fact that Now Health has addressed the compliance issues in all major iPMI markets by going onshore. Now Health recently partnered in China with Ming An to be able to offer onshore RMB policies and the company is also licensed in Dubai. This makes the performance of the servicing and IT platform even all the more impressive operating in a multi-jurisdictional world.

It has not all been plain sailing though, and Now health have overcome several hurdles since their initial launch. However, after a set of false starts and premium adjustments to bring the premiums more in line with the market, the company is really starting to make traction and is now likely to be a key player in the future.

Another small hiccup that Now experienced along the way involved the recent changes to the complications of the pregnancy / childbirth benefit. Previously, the benefit would cover the insured, even if pregnant at the time of application. This was unique in the market as it meant an individual could actually receive coverage for an emergency c-section if deemed medically necessary. Naturally, this sort of benefit is extremely prone to anti-selection and this proved to be the case here. Pacific Prime had voiced concern about this at the time the plan was launched. Reflecting back on this, Mr. Raymond comments; "we were worried about this benefit and its impact on the sustainability of the plan benefits and premiums over the long term, it is clear from large claims that come from anti selection that the benefit would impact the overall loss ratio and Now Health have done the right thing to deal with this issue quickly. It is important that the portfolio can be managed over the long term for the benefit of all involved in it".

Pacific Prime believes that Now health has a strong future ahead of it and can give the company its global stamp of approval. The company clearly has excellent customer service capabilities, well trained and motivated staff and sufficient understanding of the premium benefit balance to build a long term and sustainable portfolio.
Nov 17, 2012

Pacific Prime re-brands its Singapore Kwiksure operation with Pacific Prime name

Pacific Prime, one of the leading global distributors of international private medical insurance in Asia and the Middle East has re-branded its Singapore operation under the Pacific Prime brand name.

Pacific Prime's Singapore operation first originated in 2006 as an insurance agency to assist its clients relocating to the city…

Pacific Prime, one of the leading global distributors of international private medical insurance in Asia and the Middle East has re-branded its Singapore operation under the Pacific Prime brand name.

Pacific Prime's Singapore operation first originated in 2006 as an insurance agency to assist its clients relocating to the city state from Hong Kong and China and has steadily grown over the past 6 years to become the distributor it is today. Initially, the Singapore office was branded under the 'Kwiksure' name, a title which is synonymous with motor insurance in Hong Kong (being the cities leading distributor of motor insurance). However, with the increasing emphasis on medical insurance and a realignment of Pacific Prime's operations around the world in regard to medical insurance, the re-branding of the Singapore office is a logical step.

Neil Raymond, CEO of Pacific Prime stated "We are delighted with our growth and development in Singapore and are very optimistic for the future. Pacific Prime has also relocated to a new office location in China Square Central with more space to develop and to be closer to our clients located next to the CBD in Singapore".

Pacific Prime operates as an insurance agency in Singapore and is a leading distributor for Bupa International (partnered with Raffles Health Insurance Pte Ltd), Interglobal and Chartis, all of which are consider to be leading medical insurers in the city state.

Mr Ray Bond, who heads up sales for Bupa International in the region, commented on Pacific Prime's re-branding; "we are delighted to be working with Pacific Prime across the region and we can see that Pacific Prime's increasing focus on international private health insurance and its re-branding strategy go hand in hand'.

The development of medical insurance across Asia and specifically in Hong Kong, Singapore and China has unique challenges due to the high and fast rising cost of health care. Pacific Prime's focus on developing its offices around the region therefore, is to deliver better service to its clients and also to try and control healthcare costs for its clients.

Neil Raymond commented; "we fully understand that Healthcare costs are a rising part of people's income and that without managing these costs closely, it is going to become unaffordable. At Pacific Prime, we work hard with insurers to bring down premiums and also with clients to look for lower cost options. But ultimately, we must also work on the cost of health care".

Healthcare costs are rising in most parts of Asia at about 11%, a figure that is not sustainable in the long term being far above the rate of consumer price inflation. Mr Raymond commented that "Pacific Prime was working with insurers in Singapore and around the region to find ways to bring down these costs".

With developments constantly occurring in the Asian region, this latest move on Pacific Primes part should definitely benefit the company and its clients and help to strengthen their foothold in the growing Asian market.
Nov 15, 2012

Pacific Prime sees international private medical insurance inflation falling - AXA PPP numbers are good.

Pacific Prime has seen increasing signs of global medical insurance inflation falling in the high end sector, often called International Private Medical Insurance (iPMI). Rates of inflation have typically been running year on year at around 11% for the past 5 years. However, in recent months a number of key industry players have recorded inflation rates well below this level and with an annual increase…

Pacific Prime has seen increasing signs of global medical insurance inflation falling in the high end sector, often called International Private Medical Insurance (iPMI). Rates of inflation have typically been running year on year at around 11% for the past 5 years. However, in recent months a number of key industry players have recorded inflation rates well below this level and with an annual increase of 8%, AXA PPP is one of them.

A very important insurer in this industry sector, AXA PPP is one of the oldest and largest insurers around today and their experience will definitely be an important barometer of the direction in which global medical insurance inflation is going.

The underlying driver of medical insurance premium increases lies in the cost of claims incurred and as such, the rate of change of premiums is a very good proxy for the change in the cost of treatment.

Pacific Prime's relationship with AXA PPP has continued to develop, and year on year sales of AXA PPP policies are up almost 300% in the past twelve months with Pacific Prime. An important reason for the increase in the business that Pacific Prime passes to AXA PPP is the management of premiums, and historically the AXA PPP plan could always be considered good value for money, especially when comparing premiums to benefits. The recent announcement of the change in rates then continues to reinforce this perception of a value for money policy.

Mr Neil Raymond, the CEO of Pacific Prime commented, 'AXA PPP has always been an iPMI provider that seemed to be focused on the UK but was great value for money, they continue to deliver cost effective solutions but now they are more outward looking in our opinion. They historically had a few critical weaknesses with their plans but they have also addressed this problem in the past 12 months'.

AXA PPP has also made some critical changes to its plan over the past twelve months to areas that Pacific Prime always considered to be major weaknesses when benchmarking against competitors. These changes have had a significant impact in Pacific Prime's overall ranking and opinion of the AXA PPP plan and thus the impact on Pacific Prime's sales.

For example, the removal of restrictions around chronic condition cover has now taken place. Historically AXA PPP was considered very weak on chronic conditions and the coverage of these types of conditions is perhaps the most important part of any medical policy. Chronic conditions include illnesses such as Diabetes, High Cholesterol and High Blood Pressure and refer to incurable conditions that present symptoms which can only be managed, and not cured. Previously, AXA PPP only covered listed conditions and only for a limited period. In Pacific Prime's opinion, this made the policy no more useful than a travel policy for an expat living abroad. However, in the past 12 months AXA PPP has removed these limitations and thus now when benchmarking against global competitors, the PPP plan looks to be very good value for money.

Other minor changes to the overall benefits in the past 12 months include a new dental option on AXA PPP's Comprehensive and Prestige plan, increasing the already built in USD $510 on Comprehensive to USD $1,600, and USD $800 on Prestige to USD $2,400. Furthermore, the Standard plan (Inpatient only) now has an optional Out Patient rider, covering OP up to USD $1,200.

In addition to these changes, Pacific Prime is of the opinion that AXA PPP service standards are improving. The service aspect is hard to qualify but experience from Pacific Prime's head of operations, Mr Owen Ryan backs this up; "AXA PPP has improved its service standard quite a lot in the past 12 months and we have really noticed this. They are still not near the top when we benchmark on the service metrics but we are encouraged that they are listening, investing and delivering on these issues and so we expect even better results in the future".

On a final note, AXA PPP announced this week that residents in Greece are to have an extended waiting period on maternity benefits imposed. Previously, the plan had a 12 month waiting period in place on payment of maternity expenses but this has been individually adjusted for Greek residents. Although no reason was given for the change, Pacific Prime suspects this is due to the rate of unemployment in Greece. Mr Raymond commented that "the effect of unemployment on the birth rate (or power cuts) has been documented before and we suspect that AXA PPP are trying to reduce their exposure to this is Greece. Is Spain next?".

Despite this, AXA PPP seems to be on the right track and has laid down the necessary groundwork to continue to perform positively for the rest of the year, and in future.

Nov 14, 2012

Pacific Prime predicts little value for clients after Cigna re-brands Van Breda

Individual and SME Pacific Prime clients will see large annual increases in 2013 across the Cigna Global Expat plus plan, recently acquired from Van Breda and now undergoing a re-branding to the Cigna brand. While most international insurers have published annual increases well below the 5 year trend for 2012, (Allianz Worldwide Care, Bupa International, Aetna Global Benefits and AXA PPP) these…

Individual and SME Pacific Prime clients will see large annual increases in 2013 across the Cigna Global Expat plus plan, recently acquired from Van Breda and now undergoing a re-branding to the Cigna brand. While most international insurers have published annual increases well below the 5 year trend for 2012, (Allianz Worldwide Care, Bupa International, Aetna Global Benefits and AXA PPP) these latest increases from Cigna on the Expat plus plan will leave most clients very disappointed, and Pacific Prime analysts suspect that most policyholders will put this down to the takeover of their policy from Van Breda to Cigna.

Pacific Prime clients on the Cigna Global Expat plus plan will see an increase of 29% on their premium for all renewals in 2013 and in specific markets it is understood this could be as high as 50% (Hong Kong, Singapore, China). This cannot really be considered as medical insurance inflation, which is clearly not running at this level anywhere in the world, but more of a market pricing adjustment. As a result, clients are sure to question whether this increase would have still have occurred under Van Breda and if Cigna bringing in its own 'economic model and costs' to run the Expat plus plan is to blame.

Cigna purchased Van Breda in August 2010 in a reported USD 300 - 400 million deal. At the time of the purchase, Van Breda was essentially a market leading NGO / INGO medical insurance provider; Pacific Prime analysts believe this was the main factor behind Cigna's acquisition of the company. However, the purchase of Van Breda also saw Cigna gain ownership of Van Breda's small individual and SME international style health insurance plan called Expat Plus. In total Van Breda was believed to have covered approximately 700,000 people under their global medical insurance products, the acquisition of the organization by Cigna is a clear indication of Cigna's global international health insurance ambitions. Cigna, not unlike other major players including Bupa International, AETNA, and AXA PPP, are clearly placing increasing importance on the international market segment and the purchase and recent re-branding of Van Breda is just the latest step in the continuing trend of major providers looking further a field for growth opportunities.

Since the acquisition, it has become unclear whether the takeover has proven beneficial for either Cigna or Pacific Prime clients with Van Breda policies. The premium market adjustment for 2013 will leave many clients in despair and create numerous client management problems for Pacific Prime, who are preparing for a backlash in sentiment come renewal time. Van Breda was also the previous home of the NATO contract, perhaps the world's biggest global medical plan at an estimated premium of 100 Million USD. However, this has subsequently moved to Allianz as of early 2012 therefore significantly diminishing the size of the former Van Breda portfolio. In addition, the changes in premiums across the personal and small corporate plans will most likely lead to numerous clients seeking other options as well.

Mr Neil Raymond, CEO of Pacific Prime put the proposed premium increases in to context for Pacific Prime and it customers; "The dramatic change in premiums is going to be very disappointing for our clients who will likely put this huge increase down to the Cigna acquisition and consequent re-branding. We normally prefer insurers to adjust premiums in a more balanced way rather than in such a dramatic jump. If the portfolio is not performing well, we understand something must be done but I think such a big increase in one year with no obvious reason is a mistake, clients will think this is the hand of Cigna".

Medical insurers are sometimes required to make 'market adjustments' with pricing that is above and beyond normal medical inflation. It is generally understood that when the loss ratio of a plan portfolio is fundamentally wrong then it is not sustainable but making this dramatic adjustment sends very negative signals into the market. Allianz Worldwide Care made a similar type of adjustment in 2006 due to maternity losses and although it was able to recover, Pacific Prime (one of the leading global distributors of AWC) had to invest tremendous resources into managing the adjustment - explaining to clients what had happened and why.

Neil Raymond explained "when Allianz made the market adjustment in 2006 it was very tough on clients and we invested a lot of time with each client to help them to understand. At the time, Allianz was fortunate that their plan administration and claims settlement department was performing well so clients did not want to move. More importantly, Allianz did not change their brand. My concern with the Expat plus premium jump is clients will associate this negative change with Cigna, not with the benefit premium balance on the plan. This Cigna premium jump is going to be much harder for us to explain".

Pacific Prime's analysis of the Expat plus plan revealed that the substantial increase in premiums is in fact justified to a degree when benchmarked against competitors. Mr Owen Ryan, from Pacific Prime's Operations team stated; "the Expat plus plan has normally been great value for money and its claims settlement is one of the best in the market, we encounter few problems here. There are admin issues on the plan though, principally because it is run on a 'European style' basis whereby the premium adjustments always occur on the 1st of January even if you renew later on in the year. This concept is often very hard to understand for most clients". As such, the premium levels for the Expat plus plan in 2013 are more in line with the other key competitors but it is still going to be a hard pill to swallow for clients.

Another issue which is likely to cloud the impending premium increase is that Cigna has recently launched its own new global type health plan named 'Global Health Options'. This new plan has in reality been running in competition with the former Van Breda plan, Expat Plus. Pacific Prime has expressed concern that the client perceptions of the dramatic increase in Expat plus will spill over to the overall perception of Cigna and consequently impact the Global Health Options plan.

Mr Raymond commented further on this; "Cigna has a lot of things going on in the international private medical insurance market with global and regional plans having been recently launched in the past and we understand there is still more in the pipeline. I think the management of the old Van Breda portfolio needs to be considered carefully as this will impact the Brand". He went on to note "Cigna clearly has the ambition and capability to be a leader in the iPMI market and we fully anticipate this to happen but managing all parts of the portfolio around the world is key, in reality they may be run as separate P&L but they are also under one Brand. We do not want to see another case of AVIVA in Hong Kong". Mr. Raymond refers to the unfortunate action of AVIVA pulling out of the Hong Kong high medical market, abandoning all clients on renewal (regardless of cancer or heart diseases). AVIVA's disorderly departure from the market was shocking to those inside the industry and even more disturbing to those outside it.

In the medium to long term, Pacific Prime remains very positive about the potential for Cigna to be a major player in the market. However, the current Expat Plus adjustment will be a test of how far the Cigna brand can carry and support a plan in the wake of negative news for policyholders.

Nov 08, 2012

Pacific Prime to offer re-branded ICBC AXA Ultracare Plan in China

Today is the official launch of the re-branded AXA Minmetals Ultracare International Medical Insurance Plan in China to its new brand name, ICBC AXA Ultracare. The re-branding follows the change in shareholding from Minmetals to ICBC.

This is only one of a number of changes in China for the ICBC AXA medical plan, all of which are…

Today is the official launch of the re-branded AXA Minmetals Ultracare International Medical Insurance Plan in China to its new brand name, ICBC AXA Ultracare. The re-branding follows the change in shareholding from Minmetals to ICBC.

This is only one of a number of changes in China for the ICBC AXA medical plan, all of which are steps in the right direction according to Pacific Prime CEO Neil Raymond, he commented; "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".

Changes have mainly been occurring across plan benefits and premiums recently, and of these, all have been considered very positive by Pacific Prime who is optimistic that the plan will perform well in the future.

One of the most notable changes involves the recent announcement that premiums in China will only rise 5% at the rate review (October 2012). This change, is an indication of medical insurance inflation and is very positive news, being a very low rate of increase in China. In fact, as China's oldest global type medical plan, this is the lowest rate that this plan has experienced for the past 10 years.

Increases in the period between 2005-2010 regularly hit 20% as this was a time when the rate of medical inflation in China was the highest in the world and all insurers were typically experiencing year on year premium adjustments at the 15-20% mark. Naturally, this was driven by the cost of access to the leading clinics and hospitals such as the Beijing United Family Hospital and Shanghai United Family Hospital. The current lower rate of increase indicates that the cost of health in China at leading facilities has stabilized (at typical high end global costs) and we are unlikely to see such high rates of increase again.

The ICBC AXA plan is now available on a 'Fully Medically Underwritten' (FMU) basis. This is excellent news for those with pre-existing medical conditions as currently, only Bupa International offers this in China (and this only became available earlier this year). The FMU plan means that those with pre-existing conditions can apply to have their conditions fully covered after underwriting. This is typically subject to an additional premium which is derived based on the additional risk the medical condition causes.

Mr Raymond commented further on this; "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".

ICBC AXA is now one of the only providers globally who can offer both Moratorium and FMU high end international style medical plans.

Not all the news is as positive however and the medical plan has also had some important restrictions placed on it due to poor underwriting results. Previously, the plan was always available to insure children on their own without the parents. This type of plan was very popular with local Chinese nationals but unfortunately, the underwriting results were poor and the plan has been pulled from the market, with the exception of a few intermediaries, of which Pacific Prime is one of.

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 was a sure way to make a loss for ICBC AXA. However, Pacific Prime is happy to continue to sell the plan based on good underwriting to limit the exposure of the insurer to the risk of anti-selection".

Despite these slightly negative aspects, there are positive aspects to the plan benefits too. The dental benefit, for example, has now been modified to allow for coverage of cleaning. This has never normally been the case but now claims will be included under the Wellness benefit.

Finally, in a related story to Pacific Prime and AXA ICBC. Mr Andrew Yee, formerly a manager at Pacific Prime has moved to ICBC AXA as head of broker distribution for China Healthcare (via Aetna). Mr Raymond commented that "We are delighted to be working with the new re-branded ICBC AXA and we have always had a strong working relationship with Mr Yee. China is an increasingly competitive and sophisticated market for the International Health insurance but we believe the changes that have been made are positive so far".

Nov 07, 2012

Allianz Premium Increase under 5 year inflation Average

Pacific Prime is pleased to announce that, as of November 1st 2012, with average global increases of 10.8 percent over the past five years in the Private Medical Insurance sector, Allianz Worldwide Care individual plan premiums are set to increase by an average of just 5 percent worldwide.  Against a backdrop of rising inflation, Allianz is proving one of the better performers in the iPMI…

Pacific Prime is pleased to announce that, as of November 1st 2012, with average global increases of 10.8 percent over the past five years in the Private Medical Insurance sector, Allianz Worldwide Care individual plan premiums are set to increase by an average of just 5 percent worldwide.  Against a backdrop of rising inflation, Allianz is proving one of the better performers in the iPMI sector over the past five years, with an average increase of 8 percent since 2008. Further information on global medical insurance inflation can be found on globaulsurance.com in their recent Insurance Review.

Allianz is also changing its premium zones with the inclusion of three new areas titled K, L, and M, to provide more targeted and relevant premiums to customers. This is good news for many with over 70 countries going down in price zone (with an average reduction of 10 percent) and only 3 countries going up in price zone (see appendix A below). The zonal pricing reflects the relative price of healthcare in countries and regions which have similar medical costs. A bulk of the countries affected have been moved from the J zone of Allianz plans and are now grouped together in the K zone - the result of which will see policyholders in countries such as Belarus, Czech Republic, and Egypt (for example) have lower premium increases than they would have been hit with should those countries have remained within their previous pricing areas.

While the shakeup of the zonal pricing of Allianz plans will affect policyholders, in a majority of customer's cases this will actually be to their benefit. One of the reasons that Allianz has a lower rate of premium inflation than many other insurers within the international health insurance industry is due to the different price structure resident expatriates will see dependent on where they are residing.

Claude Daboul, Director of Sales, Marketing and Operations at Allianz Worldwide Care stated, "As a client-focused business, we work very hard to restrict the impact of medical inflation on client premiums, across all markets.  Proactively monitoring and managing the cost of medical treatment and associated services enables us to contain costs for our clients and maintain affordable premiums."

Further to ensuring that policy premiums are more targeted towards the relative risk associated with healthcare costs in countries around the world, Allianz is also expanding policy flexibility through the inclusion of six new deductible (excess) options for In-patient Core Plans. This will enable customers to ensure that their policy is able to further meet their individual needs by providing a more comprehensive range of options with regards to healthcare payment.

Additionally, under an Allianz Worldwide Care policy it is now possible to add a newborn child to the plan where the child is the product of a surrogate pregnancy. This change also includes full medical underwriting for the infant, and comes with the ability to add a child to either the  mother's or father's plan after 6 months from purchase in order to waive any medical underwriting which may have an impact on issues like pre-existing or congenital birth conditions.

However, it should be noted that Allianz has changed the language on its plan with respect to some exclusions and benefits. For example, Allianz Worldwide Care policies will continue to exclude coverage for treatment related to Sleep Disorders, including treatment for insomnia, but from November 2012 investigations into the causation of sleep disorders will be covered.
Additionally, coverage for the Care or Treatment of drug addiction or alcoholism will remain to be excluded and from November 2012, smoking cessation treatments will also be excluded.

Furthermore, the language on Prescription Drug coverage has been tightened to ensure that medication received by the policyholder must be effective for the condition being treated - which may pose some concerns for policyholders currently using medications for off-label treatments. The exact scope of this change is yet to be realized, and the impact on policyholders is currently unknown, but Pacific Prime analysts forecast that any detrimental effects (should they exist) are likely to be relatively small.

Finally, it should be noted that Allianz Worldwide Care policyholders whose plans are settled with Swiss Francs (CHF) will experience a decrease of 13 percent across their premiums and deductibles largely due to currency fluctuations.

Allianz is continuing the strong wave of innovation which has been seen in the company's products over the last 5 years, and is proving that as a company it is committed to providing policyholders with the best coverage and highest levels of service possible.

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