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News & Developments in International Health Insurance

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Dec 19, 2012

IMG and Integra Global Deliver New Plans in Response to EU Gender Directive

The new EU Gender Directive that has been put into action this December 2012, will undoubtedly impact numerous companies in the health insurance industry. Historically, insurers have always structured premium prices based on the gender of the applicant. The most common use of gender as a determining factor in policy premiums lies in regard to the coverage…

The new EU Gender Directive that has been put into action this December 2012, will undoubtedly impact numerous companies in the health insurance industry. Historically, insurers have always structured premium prices based on the gender of the applicant. The most common use of gender as a determining factor in policy premiums lies in regard to the coverage of maternity benefits. As pregnancy deals with only one gender and can be very expensive, there are undoubtedly going to be cost implications for those applicants who have planned not to (or cannot) become pregnant.


The two major EU based international private medical insurers particularly affected by the Directive are IMG and Integra Global, who have each chosen interesting methods to comply with the new regulations. IMG has taken a gender neutral pricing approach; plan structure and benefits remain the same but pricing will be based on a weighted average of the risk to the two sexes. This is how most insurers in the market (Bupa International, AXA PPP etc) typically tend to price their plans. The approach taken by IMG is a straightforward response to the new Directive. Easy to manage and simple to explain to clients, it includes the following advantages:


Clients outside the age bracket where maternity is not an issue see no change in benefits or significant premium adjustments.

In the age bracket where maternity is an issue, many female clients (around 50%) will see premiums drop, but men remaining under portfolio will see a steep rise in premiums without change to benefits.

Couples together on the plan will see no change as the rise and fall will balance out. The new approach is the easier option for the insurer to implement, requiring only a change of rate calculation per policyholder.

This week, IMG announced implications of the change to premiums, and analysis shows that male premiums will rise between 10-50% depending on age, with greater impact for those closer to age 30. Conversely, female premiums will reduce by 6-30%. IMG has combined the Gender Directive changes with the April 2013 premium review, and rates being published will now be fixed for the whole of 2013. As such, at least 10% of the increase in cost can be offset as effects from medical inflation. Men are likely to be negatively affected by the changes, yet reception of these adjustments remains to be seen. However, if this decreases the retention of plans, there is a risk that female rates will rise regardless in order to minimize the risk of men leaving the portfolio.

Another major international private medical insurer impacted by the new Directive, Integra Global, revised plan designs in response to the legislation. Redesigning plans is a more radical move, and requires significant investment and time to explain options to clients come renewal time.

Integra is introducing four new plans that are tailored to specific target groups, such as families and individuals. The new plans focused on individuals are named 'YourLife' and 'PremierLife' while the plans structured for families are titled 'YourFamily' and 'PremierFamily'. These plans have been structured for clients selecting plans based on maternity or non maternity needs, making them gender specific anyway. The plans are a slightly more complex than simply including or excluding pregnancy cover, but the impact of this benefit on pricing will largely determine people's decisions. Integra's novel approach involves some risk as changes need to be explained to clients, making the retention of policyholders over the next 12 months crucial.

The Gender Directive currently only affects EU based insurers, while the likes of HTH (who still base price on gender) have yet to be impacted. However, it may only be a matter of time before similar Directives are introduced as a global standard.

Dec 18, 2012

Nordic Health Care 2013 Premium Increases Above Average

Nordic Health Care, a specialist in international health insurance policies has been working with Pacific Prime since 2009 and has become a key partner in the industry. The Nordic Health Care plans have previously been considered among the best in the market however, premium increases for 2013 have now been announced and have come…

Nordic Health Care, a specialist in international health insurance policies has been working with Pacific Prime since 2009 and has become a key partner in the industry. The Nordic Health Care plans have previously been considered among the best in the market however, premium increases for 2013 have now been announced and have come in at 15 percent above 2012 rates. This increase is roughly 40% above those recently published by a range of other leading international providers including Allianz Worldwide Care, Bupa International, AXA PPP and Interglobal.

The Nordic Health Care plans are unique in the health care market in that upon joining the plan, a client remains in the same age bracket going forward so premiums do not increase due to age; however, this does not make premiums immune from steep rate rises. Over recent years, increases by Nordic have been in line with other insurers but this year, the change in cost to clients is above the average and both new plan and renewal premiums will be affected by the same percentage (15 percent). Pacific Prime believes this increase in premiums is down to the rich plan benefits offered by the Nordic Plan.

Neil Raymond, CEO of Pacific Prime commented: "The Nordic Health Care plans are among the best in the market for those looking for comprehensive cover and are particularly attractive to European nationals who like the fact that they are able to stay in the same age bracket going forward so hopefully, premiums do not adjust too much. Unfortunately though, for 2013 there will be a significant step up".

It is important to note however, that when most insurers quote premium increases they exclude the impact of the increase in age, whereas for Nordic renewal clients there will be no increase in age. In consideration of this, given that the increase in age normally accounts for an average of a 3 percent rise in premiums each year, the Nordic increase could in fact, be positioned as a 12 percent increase. While still higher than most other insurers, it is a more acceptable figure than 15 percent.

Nordic Health Care has also historically been very open to accepting clients with a pre-existing condition (in return for a premium loading) and while this has made the plan very attractive to many clients, it has most likely impacted the loss ratio experience of the entire portfolio.

Mr Raymond commented: "The fact that Nordic cover pre-existing conditions has been very positive for many looking for insurance but this also means that policyholders will find it very hard to move away from Nordic to another insurer, even with a 15 percent increase in premiums next year".

One positive outcome regarding Nordic's annual adjustments is that the insurer is known to typically increase its benefits along with its premiums. This is not a common occurrence among insurers and most providers effectively erode the quality of plans overtime by slowing the rate of increasing premiums without adjusting benefits. This is not as easily noticeable for clients, in comparison to premium rate increases, so insurers typically use this method to keep plans profitable.

The year 2012 saw a few other changes for Nordic Health Care, particularly on the compliance side. Recently, Nordic effectively withdrew from the Latin American offshore market for new business (although they continue to honor policies for renewal). The insurer also withdrew from most of its other global markets around the world outside of Europe. This has left a vastly diminished foot print of only Europe and a few other overseas locations, although it should be noted that plans are still available in important locations such as Hong Kong, Thailand and Singapore. Renewals in all locations do not seem to be impacted by these changes, only new applications.

Nordic Health Care are obviously in a transition phase and are trying to find the right balance between compliance and distribution as the list of locations where their plans are sold is in flux and has been changing on a regular basis. This is a process many other leading international health insurance companies have been through and as insurers grow in the market, the balance between the drive for sales and compliance often shifts in such a manner.

Mr Raymond commented: "Compliance is of increasing importance as regulators around the world become more aware of high end medical plans sold from overseas to their locally based residence. Coupled with the growth and importance of many of these markets, insurers are finding the need to regularly readjust their position of where they can sell to and where they cannot. Nordic's current position here is by no means unusual".

Finally a note on taxation; as from next year, all Nordic clients outside of the EEA will be levied a 1.1% tax on their premium. This seems to be specific to Danish tax regulations but may well be the norm in the future for all international insurers as Europe governments seek to balance their books.

Dec 13, 2012

Aviva Discontinues Health Insurance for its IdealMedical and Global Health plans in Singapore

Aviva Ltd recently announced that it will no longer be providing two of its health insurance products in Singapore. This move could potentially impact 5,000 to 10,000 customers currently on the IdealMedical or Global Health plans. Pacific Prime representatives have learned that Bupa International and its partner, Raffles Health Insurance are planning…

Aviva Ltd recently announced that it will no longer be providing two of its health insurance products in Singapore. This move could potentially impact 5,000 to 10,000 customers currently on the IdealMedical or Global Health plans. Pacific Prime representatives have learned that Bupa International and its partner, Raffles Health Insurance are planning to offer Aviva customers the option to transfer to a new plan with comparable benefits but  priced at different premiums. The transfer is not expected to be subject to any underwriting, however exclusions from previous policies will not be removed.

This news follows Aviva's announcement on October 26th, 2011 when all renewals for their Global LifeCare policies in Hong Kong were denied. At that time, no alternative solutions were provided for customers which left those who had developed health conditions during their policy with no option to receive coverage from any other provider.

Now, a similar situation is set to develop in Singapore with Aviva and from February 2013, no renewals will be accepted for their IdealMedical and Global Health Insurance plans. However, the company's exit from the the Singaporean market does differ from its Hong Kong departure due to support of Bupa and RHI policy transfer options.
Customers will be offered the choice of transferring to either RHI-Bupa Worldwide Health Options, or RHI-Bupa Health Select Asia Pacific and both plans offer comparable benefits to Aviva's policies to hopefully make for a smooth transfer.

Premium rates will depend on the person's age and the plan that they are interested in but agents involved in the situation have indicated that in almost every instance, premiums will increase and significantly so.

Pacific Prime analysts have not yet determined the full effects of Aviva's decision in Singapore, but it is expected that this will have a significant impact on the company's portfolio in the country. This in turn, will undoubtedly impact many policyholders in terms of premiums and in some cases, coverage. However, after the experience of the company leaving Hong Kong, the fact that there have been special considerations provided for Aviva customers should be viewed as a very positive move by policyholders.
If Aviva customers opt not to switch their policies to Bupa or RHI, they may not be able to receive coverage for those conditions developed  while insured with Aviva, as these will now be considered as pre-existing conditions by other insurers. Despite the inevitable higher premium rates, customers will still be better off in the long run rather than not being able to have their expensive medical conditions covered at all.

Different from Aviva's departure from the Hong Kong market, Bupa and RHI's willingness to step into the situation to offer solutions to former Aviva customers will significantly help. Their agreeing to assist and to develop new customer relationships will undoubtedly prove to be beneficial to the overall local health insurance market in Singapore.

While Bupa/RHI will bring some respite to customers, it is still concerning that the cessation of plans in two different markets in the space of a year has taken place. Instead of choosing to just refuse new business, Aviva's decision to cease renewing all existing policies has been seen by many in the industry as a very poor business decision, especially due to the potential effects it could have on people who may suffer from serious health conditions and even life-threatening diseases or illnesses.

Even though Bupa is providing an opportunity for Aviva customers to switch, Aviva customers around the world have reason to worry about the status of their policies, in light of the recent decisions the company has made in Hong Kong and Singapore. It raises questions about the company's long-term viability in the industry.

Pacific Prime analysts have expressed concern that Aviva has not been able to price their insurance products adequately so that they can remain sustainable in the long-term, which could have contributed to the total cancellation of these policies in Hong kong and Singapore. However, as pricing seems to be a continued problem in Asia  due to the rising costs of healthcare in the region, Aviva may see more problems in the future.

There are no predictions yet for whether or not this trend will continue globally, but the current indications are worrying in regard to the survivability of the Aviva's medical plans in the market.

While Aviva's move can be viewed as a negative business decision, Pacific Prime does commend Bupa and RHI for their willingness to assist Aviva customers affected by the company's decision to cancel their health insurance coverage in Singapore.

Dec 10, 2012

Integra Global Continue to Make Positive Developments

Pacific Prime has always worked closely with Integra Global and recent developments by the insurer have made policy plans even more attractive to Pacific Prime clients.

Integra have long been a niche player in the global medical insurance market but have gained momentum by building a strong track record…

Pacific Prime has always worked closely with Integra Global and recent developments by the insurer have made policy plans even more attractive to Pacific Prime clients.

Integra have long been a niche player in the global medical insurance market but have gained momentum by building a strong track record in quality of customer service, premium management and claims handling performance. Over the past five years, Integra has shown solid and stable client management, allowing Pacific Prime to build a substantial client base that is likely to continue to grow with these latest developments.

South East Asia has always been a key market for Integra Global, and to enhance customer service, Integra now offers an expanded direct settlement network in Malaysia, Singapore and Thailand. This has been made possible due to Integra's relationship with Medilink Global out of Malaysia and all Pacific Prime clients with Integra policies in China, Hong Kong, Macau, Singapore and Malaysia will now be added into their central system. This will be a massive advantage for customer service, as policyholders can now use their policy card for a seamless claims settlement.

Neil Raymond, CEO of Pacific Prime commented: "Insurance providers generally do not appreciate the importance of direct settlement to clients, particularly in countries where the postal system is poor and the banking system slow and expensive to use...Integra, as a focused and well organized company, has noticed what is really important to medical policyholders and can deliver on this". Integra has a similar arrangement in  Thailand with Medilink Thailand and Pacific Prime Integra Global policyholders also now have access to seamless direct billing capability in both Thailand and Vietnam with Medilink.

Integra are striving to further implement their goal of 'flexibility and quality of coverage offered by a global policy but with the convenience and customer service of a local plan'. An important milestone on the horizon for Integra is that in the Middle East, a region which is sure to be a game changer for many insurers, locally fronted options for individual and corporate clients will soon be possible.

Pacific Prime sees a move like this as critical for the growth of any company in the region. Dubai is becoming increasingly regulated and the corporate market is already almost completely onshore. In the not too distant future, Pacific Prime predicts that the individual and corporate markets will only be open to onshore providers.

Fronting international medical insurance plans through a local insurer is common practice in the Middle East, and is already a well established approach by major providers such as Bupa International and Allianz Worldwide Care. The good news for Integra is that, due to the established nature of the 'onshoring' method', it can be done at a relatively low incremental cost (a cost which ultimately needs to be passed on to clients). Pacific Prime estimates that the 'onshoring' of a plan in the Middle  Eas twill adds 5-10% to premium totals.

Mr Raymond commented on the Middle East development: "People often forget how large the expat medical insurance market is in the Middle East and their attention gets drawn to the emerging markets such as India, China and Brazil. I think the point is that, for a focused player with a good service track record like Integra Global, opportunities in the Middle East are bigger than anywhere else."

Pacific Prime's relationship with Integra started in 2010 and since then, it has become a key player in offering unique options to clients. Integra Global's continuous efforts to develop have consistently impressed Pacific Prime, however, the new EU Gender Directive will have an impact on product offerings and it is unclear if this will be positive or negative.

The new directive, which came into force in December 2012, no longer allows EU based plans to price policies based on gender, something which Integra has always done on their 'Personal Health' and 'Premier Health' plans. Rather than just converting rates over to a "gender neutral" rate, which would have potentially negative effects on either males or females depending on the emphasis, Integra has taken a novel approach and have come out with four new plans that focus on individuals and families respectively. YourLife and PremierLife are focused on the expat individual or couple whereas YourFamily and PremierFamily plans are geared toward families and the bespoke benefits and protection families require. A specific family health plan design is a unique approach and it will be interesting to see how this will be accepted by the market.

One final piece of good news from Integra Global is the launch of their new 'MarineSure' plan. Many international medical insurers have started to focus on industry professions, and the marine industry is not unique in this regard. As an industry sector, in fact, it has unique medical insurance requirements regarding medical evacuation and country of cover, and is well suited to a bespoke plan structure. Pacific Prime's early evaluation of the MarineSure plan from Integra indicates it will be a serious competitor in this sector, with attractive premiums and good service.

Dec 05, 2012

Expats Shocked into Cover in Dubai

The news of a recent Jumeirah Lake Towers (JLT) fire in Dubai has led to a sudden rush for Home Contents Insurance purchase as well as a range of other types of policies, and raised an important issue as to whether expats in Dubai are fully aware of their insurance options.


The news of a recent Jumeirah Lake Towers (JLT) fire in Dubai has led to a sudden rush for Home Contents Insurance purchase as well as a range of other types of policies, and raised an important issue as to whether expats in Dubai are fully aware of their insurance options.


In Dubai two popular insurance companies, AXA Insurance Gulf and Royal & Sun Alliance (RSA), have seen quote requests spike 2000% since the JLT fire. Likewise, actual sales of contents insurance have also increased dramatically. Leading insurance broker in the UAE, Medstar XXX, has reported similar levels of increased activity. Its clients have responded to news of the fire by looking not just for home insurance, but a range of other types of policies, specifically life and health insurance.


Living in an expat environment appears to cause some foreigners to forget about the importance of insurance. With less legal requirement for insurance in Dubai than many other countries, there is concern that there is an increasing trend of expats remaining uninsured. Recent studies found that the penetration rate for home contents insurance was only 5% and that 86% of homes in Dubai are without contents insurance despite 95% of people believing it to be a valuable asset (according to research by souqalmal.com). Whether to take out insurance is of course a question of risk assessment, but how much risk should an expat take?


Surveys show that the first 2 years of expat life is when the most costly unforeseen expenses occur. For expats, this comes in the form of unexpected medical bills, relocation costs, visa processing fees and travel costs etc. Medical costs in the UAE are among some of the highest in the world and account for some of the largest expenses an expat will have to pay. It can be argued that medical insurance should be one of the first considerations upon relocating overseas however, statistics show that car insurance is the most frequently purchased insurance (most likely due to the fact that it is compulsory to purchase).


It is important for expats to set aside time to think about the other important insurance aspects of moving abroad. It is expected that the majority of people will value their health over their car, yet health insurance is usually one of the last things that expats consider purchasing, if they consider it at all. Expats generally spend more time figuring out other issues  first such as their accommodation, transportation, schooling etc. However, in a country where one night's stay in hospital can cost you over USD 3000, and one visit to the doctor can cost over USD 150, medical insurance really should be higher on an expat's priority list.


In some areas, such as Abu Dhabi, medical insurance is compulsory. Any employer hiring an expat must provide them with medical insurance; however there is no guarantee of the quality of the insurance plan. Although Abu Dhabi's solution sounds good in theory, there are problems with this system. Many insurance companies find it difficult to meet the standards that Abu Dhabi requires, and with the amount of competition driving prices down, it is hard for insurers to remain profitable. Recently, Green Crescent, an insurer with a long history in Abu Dhabi, announced that their shares fell 9.4%. They have already scheduled a shareholder's meeting to decide whether to dissolve the company or to operate on a reduced capital.


A common issue is that many expats do not know how to obtain medical insurance. Inexperience and unfamiliarity with a new market can make the process very confusing, but there are many channels of obtaining impartial advice available. Expat forums such as ExpatWomen can be a very valuable source, as can independent brokers such as UAE Medical Insurance. Advice tends to be free and the individual can be guided to the most suitable plan based on their unique situation and requirements.


In addition to medical insurance, house, contents, life and personal accident insurance are  all other forms of insurance that should at least be considered to determine whether they are necessary to purchase. Insurance has always been the foundation of a sound financial plan and any adviser will suggest that one always arranges ones insurances prior to any investments. For a country where the expat has much more disposable income and with dangers such as the JLT fire serving as a very real wake up call as to how easily such problems can occur, obtaining insurance has never been so important.

Dec 05, 2012

South America International Medical Insurance market shuts down in 2012

For many decades, South America's offshore international medical insurance industry has catered to wealthy, high-earning South Americans and flourished. IHI Denmark was one company that had developed its products and seen especially high levels of success in the region. Despite the previous years of high success and growth, 2012 has proven to be a difficult time due to a combination of new regulations…

For many decades, South America's offshore international medical insurance industry has catered to wealthy, high-earning South Americans and flourished. IHI Denmark was one company that had developed its products and seen especially high levels of success in the region. Despite the previous years of high success and growth, 2012 has proven to be a difficult time due to a combination of new regulations and poor performance of numerous health insurance plans. These unexpected failures have resulted in many of the leading offshore providers in the industry having to pull out from the region.

Bupa and IHI Bupa, with perhaps the largest offshore portfolios on the continent,  have ceased the sales of their offshore plans in the region. Back in 2004, IHI Denmark was purchased by Bupa before the insurer went on to buy AMEDEX Insurance in 2005. Both acquisitions lead to Bupa gaining access to some 100,000 customers in 42 countries throughout Latin America.

Bupa is now looking to change their strategy in the region due to compliance requirements. Many countries in the region have enforced policies whereby international insurance companies may be subject to significant punitive fines if they sell health insurance products without a license. These fines could potentially be measured in sizable percentages of global revenue so with these new regulations, it is understandable why companies would want to change their strategy. To combat this issue, Bupa has responded with increasing its onshore plans in the region.

However, Pacific Prime analysts are of the opinion that the company's offshore plans provided greater value for money and that now, customers may look to local providers for onshore policies. Despite this, customers in the region are typically brand sensitive, so with their already strong standing in the region, Bupa should still be able to appeal to a broad range of potential clients.

Nordic, a key provider that has previously experienced high levels of success in the region has also opted to step back from the Latin America market. While Nordic will still honor and accept the renewal of existing policies, the company will no longer accept new applications, citing the compliance regulations as a major reason behind their decision.

Another leading provider in Latin America that has not been immune to these recent changes in the region is Allianz Worldwide Care. During the past five years, Allianz has seen high levels of success in in the region but in 2012, the insurer adopted a much more selective approach when choosing which countries and what people they would offer their policies and coverage to. One country affected by this was Brazil as Allianz will no longer provide coverage to Brazilians in the country. Despite these changes, Allianz has taken positive steps and created their new plan 'Allianz Global Pass' to specifically cater to people from the region.

For Aetna, another key player in the market, they have experienced a continued strong performance in the region with their onshore plans. Aetna previously avoided the development of offshore plans in Latin America and through this, it has been able to maintain and develop its brand. Additionally, the company has been successful with its service capabilities particularly with direct billing, a feature that is of high importance for clients in the region.

There are undoubtedly many other leading international health insurance providers that have eyed the market in Latin America but unfortunately, several factors exist that have potentially discouraged them from entering. For example, as previously mentioned, South American clients tend to be very sensitive to brands and typically value the tips and recommendations from friends and family. This makes it challenging for new companies to enter the region, especially if they do not have an already existing global presence. Furthermore, since many low-end health insurance products have long been available in the market, offshore providers have found the highest success rates in the very high-end markets and sectors. With this potentially huge risk in mind, an insurer must be very confident in themselves that they will be able to perform well in the market.

Aside from from compliance issues and hefty fines, Latin American plans have also been put under pressure by several other factors: very high commissions (needed to support the master agent-sub agent distribution channel), high health insurance treatment inflation, medical tourism to the US (Latin American customers often travel to the US for treatment) and increasing cases of fraud. In the last few years, many extensive and highly developed fraudulent networks have been revealsed. These networks go far beyond individual people that inflate claims and involved creating non-existing clients, clinics, hospitals and doctors in order to run their scheme. International offshore insurance providers, which do not often have extensive experience in the region and may face language and cultural barriers, have been easy targets for such schemes as a result.

Pacific Prime analysts predict that many of the trends highlighted above will continue throughout 2013. Nannecy Dulin, of Pacific Prime, said: "The Latin American Region has certainly been a challenge in 2012 with many insurers withdrawing from the market or restricting access for certain clients or nationalities. We foresee more of the same next year and the region is going to increasingly require local onshore solutions and intermediary presence to be successful."

While there is still a market for high-income earning clients, who have a developed understanding of the benefits of health insurance, the ability to gain access to these customers will require onshore options with a reputable brand.

Pacific Prime analysts believe that Latin American sales of these offshore policies will continue to decrease in 2013 mainly due to companies making the shift from international private health insurance to local international private health insurance.

Dec 04, 2012

IHI Bupa 2013 Premium Increase Below Expected Rate

Pacific Prime, one of the largest global distributors of IHI Bupa policies, is pleased to see premium increases for 2013 come in below the 5 year trend, confirming Pacific Prime's recent opinion of the International Private Health Insurance market…

Pacific Prime, one of the largest global distributors of IHI Bupa policies, is pleased to see premium increases for 2013 come in below the 5 year trend, confirming Pacific Prime's recent opinion of the International Private Health Insurance market that the rate of medical inflation is falling.

IHI Bupa has been one of the leading global medical insurance companies covering expats and high net worth individuals for the past 30 years. It has a substantial client base in Asia and its plans are typically considered by most intermediaries and clients to be among the best in this region. Clients are covered worldwide, including the USA, and are offered guaranteed renewable for life plans, a commitment that most insurers are reluctant to make.

IHI has a recorded premium increase over the past 5 years averaging 13% on its 'International Health and Hospitalization Plan' (IHHP, the leading plan sold in Asia by IHI Bupa) however, this year premiums will increase by only 8.5%. This positive rating is in line with other leading international insurers who have recently reported health insurance rate adjustments for 2013, namely Allianz, Aetna and AXA PPP and so far, all key insurers in the market are recording numbers below the 5 year trend and below last year's adjustment.

Hong Kong and China have recorded some of the highest increases in medical insurance rate inflation around the world over the past 5 years so the recent wave of rates adjustments by these health insurance companies is sure to come as a relief for policyholders.

Neil Raymond, CEO of Pacific Prime commented: "We have had real problems inAsiaover 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 inHong Kongis 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".

These two key markets in Asia currently have some serious structural problems which are contributing to high treatment costs. For example, in regard to supply and demand, most hospitals in Hong Kong and China could fill every bed and every appointment many times over so facilities tend to test the elasticity of their clients and increase treatment costs. Of course, clients with comprehensive medical insurance plans are covered for this but the hospitals and doctors still end up benefiting and so have more reason to further increase treatment cost.

Furthermore, there is also a tendency to prescribe medically unnecessary treatments, particularly in Hong Kong. One only needs to examine the HK c-section rate to know that surgeons do not tend to hesitate to operate, and this phenomenon occurs regularly across numerous procedures. In light of this, the recent health insurance rate adjustments from IHI Bupa are even more encouraging for policyholders.

IHI Bupa offers several different types of plans in the Asia Pacific market, and although the IHHP plan is the most prevalent, there are other plans available but the rates of increase on these are a little higher. The International Swiss Medical plan (ISM) will see an increase of 11% in 2013, once again below the long term trend but higher than the IHHP plan. The IHI Bupa travel plans on the other hand, also popular in the region (due to the unlimited medical insurance cover benefit), have no reported increase in premiums for 2013.

Pacific Prime is pleased to confirm that, after reviewing the Benefits for the IHI Bupa plans in 2013, there are no major adjustments to the benefits on offer to policyholders. Since the purchase of IHI Denmark by Bupa in 2004, some erosion of health plan benefits has occurred over time to plans that have failed to keep up with inflations, particularly on the outpatient treatment. This has, of course, lead to a decrease in value to clients. However, this type of adjustment is often overlooked as when clients come to renew their policy, they typically focus on cost and how this has changed rather than benefit adjustments.

In this year's policy wording revision, the coverage is not being downgraded at all. Increased competition in the health insurance market, particularly in places like Hong Kong and China, means that IHI Bupa will have to be focused on delivering value for money to clients in order remain a key player. In Hong Kong over the past 12 months, Zurich,  AXA Hong Kong and Cigna Liberty have all entered the market with new plans. While in China, Allianz Worldwide Care and Now-Health are now available onshore and Cigna is aggressively trying to gain market share.

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. We also have seen a lot of activity from AXA and some very credible new entrants like Now-Health. This means the incumbents have to focus on service and value to maintain their position which is ultimately positive for clients".

The IHI Bupa brand remains very strong in the Asia Pacific region and, among segments of the market, it is still considered to be the best. Certainly for clients looking for lifetime cover from a reassuringly stable health insurance company, it is difficult to overlook IHI Bupa. Pacific Prime still remains very confident in the long term success of IHI but with competitors like Cigna entering the scene, IHI will definitely need to focus on keeping their plans current, comprehensive and competitive. Using their large wealth of experience and exposure will also undoubtedly ensure longevity of their product and its placement in the market.

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