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News & Developments in International Health Insurance

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Jan 28, 2013

Increased Options for Affordable High End Coverage Available After Release of Cigna's New Advance Plan.

Coverage from high end insurers, such as Cigna, is often at the top of the premium pile as benefits are very rich and the levels of servicing offered are of the highest standard. The "Global Health Options" (GHO) released by Cigna roughly one year ago, was designed as such a plan. However, to make their…

Coverage from high end insurers, such as Cigna, is often at the top of the premium pile as benefits are very rich and the levels of servicing offered are of the highest standard. The "Global Health Options" (GHO) released by Cigna roughly one year ago, was designed as such a plan. However, to make their plans more accessible to clients who might not be able to afford the premiums needed to purchase high end plans, Cigna have launched a new product, the GHO "Advance". With reduced benefits, this plan has resulted in a much more attractive premium while still offering the high levels of service traditionally associated with Cigna 

Cigna launched the GHO plan, the first individual plan offered by Cigna for international expatriates, to compete with other high end providers of individual plans such as Bupa International and Allianz Worldwide Care. The plans were specifically aimed at high end clients and offered extremely comprehensive benefits backed up with top servicing levels already implanted on an international platform by their corporate international plan launched in the 1970's. The plan was designed to match the current requirements for high net worth expatriates needing individual coverage, including high levels of maternity benefits and no limitations on chronic condition cover.

The plan has been received well in the market, and Cigna in China (with their joint venture Partner CMC) recently surpassed the milestone of 1 million policies sold. However, to make their plans more attractive to expatriates with smaller budgets, Cigna created the "GHO Advance" plan. With limited benefits and extra co-payment options resulting in premiums that average 30% cheaper than the normal GHO plan, the Advance option has greatly widened the scope of prospective clients, showing Cigna's commitment to the Individual Private Medical Insurance (IPMI) market.

Essentially, the Advance plan has the same modular structure as the original GHO plan and covers all the same types of treatment that the original GHO plan does. The actual benefits covered are almost exactly the same, but financial limits have been placed on these benefits so as to help lower overall premium costs.

However, one important difference to note between the two plans is the complete removal of routine maternity benefits for the Advance plan. This decision has undoubtedly had the most noticeable and dramatic effect on premium reductions, as with such high costs associated with international facilities for maternity treatment, removing this option significantly helps to reduce premiums. Of course there is a downside to removing such an important benefit, so to ensure that their clients are not at risk of the even higher costs for complicated maternity procedures, Cigna's benefit for complicated maternity is still part of the Advance plan but with a reduction of the limit from $28K to $14K. Cigna has also retained the benefit newborn care, with a reduction from $156K to $75K, as well as keeping the benefit for congenital conditions with a reduction in benefit from $39K to $20. This shows Cigna's dedication to their clients by helping to ensure they are still protected from worst case scenarios.

The Maternity option was the only benefit completely removed. However, many benefits that were previously covered without specific limits have had financial caps, or "sub-limits", put into place to help contain their costs. The biggest contributor in this area was the reduction of the overall maximum limit of the "International Medical Insurance" core module (covering inpatient benefits) from 3M to 1.5M US dollars. Although this limited amount is still on par with other plans in the market, in many cases the limit remains higher than those offered by Cigna's competitors. Within this, there were further sub-limits applied to the following specific benefits:

Jan 16, 2013

New Health Insurance Plan Proving to be a Success for Pacific Prime and MSH

With over 10 years experience in the market, MSH has now become one of the largest health insurance providers in China in 2012 through the help of a plan designed in collaboration with Pacific Prime.


Since joining the Chinese market in 2001, when they established a TPA (Third Party Administrator) service for international health and life insurance…

With over 10 years experience in the market, MSH has now become one of the largest health insurance providers in China in 2012 through the help of a plan designed in collaboration with Pacific Prime.


Since joining the Chinese market in 2001, when they established a TPA (Third Party Administrator) service for international health and life insurance products based out of Europe, MSH have grown to be one of the largest providers in Chinese international insurance. Furthermore, in 2005, the insurer launched the first CIRC (Chinese Insurance Regulatory Commission) approved international plan that now serves over 800 companies in China, many of which are found in the fortune 500.

Utilizing the existing international platform provided by their parent company, MSH International, MSH China strategically partnered with China Re in 2003 and together created the first plan completely licensed and regulated in China by the CIRC.  The plan offered medical insurance on an international level, while providing customers with the ability to pay and have claims reimbursed in the local currency - RMB. With China Re being the only state owned reinsurance company in China, this partnership has served as a platform to best serve clients both in mainland china and internationally.

One of the key elements to the success of MSH China, lies in the utilization of their provider network. Established in 2001, MSH has since grown this network and is now able to capitalize on their long standing and direct relationship with all main hospitals in China, both private and public, by enjoying discounted treatment prices unattainable by other providers.

With an exemplary history of fast payment and prompt professional service, MSH gives all hospitals the same levels of service, regardless of the extent of the treatment cost or what hospital they are dealing with. On top of this, MSH also boasts one of the largest client bases of any insurer in China and as a result, all hospitals appear to be eager to join MSH China's facility network and offer preferential treatment rates in return.

This reduction in cost for treatment compared to other insurers, has enabled MSH to offer premiums at a lower cost than its competitors without needing to sacrifice the quality of coverage offered.

Owen Ryan, of Pacific Prime, commented: "We are positive about the way MSH China will continue to grow in the Chinese market as they have proven to offer excellent levels of service to all of our clients, with little to no disputes or issues; as well as offering plans and premiums that keep our clients happy".

Another of the key factors that have allowed for the growth of MSH in China is the fact that the insurer tailors its coverage to specifically suite the wide range of clients it deals with in the region. For example, options to restrict or exclude coverage at High cost providers, as well as offering geographical cover restrictions to Mainland China have been made available. This is similar to the design of Now Health International's plans, though MSH does offer one distinct advantage in that Maternity benefits are considered an optional extra, as opposed to being built into the high level plans in Now Health's case. Also, MSH requires that two adults on the plan must both pay full maternity premiums to be able to have maternity benefits made available to them.

This particular plan design was put into place after consulting with Pacific Prime, who have witnessed the need for insurers to dramatically increase their premiums in the past due to high utilization on low cost maternity plans. The optional maternity benefit has assisted MSH in avoiding large claims loss ratios on individual plans when clients use maternity benefits in China where the hospital costs are among some of the highest in the world, even matching the cost levels in the USA at some facilities.

Mr Ryan commented "We do understand that it is expensive to take an MSH plan with maternity in the first year, though clients will see the benefits in the future when there are very stable premium increases at renewal. Also, our clients who do not need maternity are very happy as the plans are priced accordingly for their requirements".

Not only have MSH designed plans that are suitable for a wide range of clients, but they have been able to offer service to back this up both in China and elsewhere across the globe. Their International emergency medical assistance line with multilingual medical staff, including mandarin speakers from the Chinese office and all other major languages from the MSH International offices in Europe, has given customers the peace of mind that they will be able to speak to someone in any required language when they most require assistance. Furthermore, MSH has proved it can handle such situations with a level of expediency that will ensure high levels of client retention in the future.

One of the only drawbacks of the MSH China plan for individual expatriates was the inability for the plans to transfer continuously over to the MSH international plans when insured members relocated out of China, a service offered to the advantage of many of their competitors such as Bupa, Cigna or ICBC AXA. To combat this, MSH China has opened international bank accounts that allow for payment to be made and the plan to be continued outside China if a member moves to a different country. However, the plan would still be based in China, where all claims reimbursement must be made with original documents being submitted, so while there is still room for improvement on this, it is definitely a step in the right direction.

Despite the recent arrival of many large international competitors with licensed products in China, MSH has been able to make the most of their local experience and successful strategic partnering in China. The insurer has clearly taken full advantage of the international presence and servicing offered to them via the MSH International offices thereby enabling them to become the leading insurer in 2012 for locally admitted products in China.

Jan 15, 2013

Positive Signals from Now Health International in China

The first major international medical insurer to announce premium increases this year is Now Health International (NHI) and in a very positive move, the company's Managing Director - Ralph Tam, confirmed that there will be no premium increase in this review for China.

This is excellent news for Pacific Prime…

The first major international medical insurer to announce premium increases this year is Now Health International (NHI) and in a very positive move, the company's Managing Director - Ralph Tam, confirmed that there will be no premium increase in this review for China.

This is excellent news for Pacific Prime and its clients and sends a strong signal about both the rate of premium increases in the Chinese market, and NHI's commitment to growth in one of the world's current hot spots for 'International Health Insurance'.

Now Health International partnered with China based Minan Property and Casualty Company Limited in 2012 to deliver an onshore health insurance solution that mimicked its international plan, creating new plans that included both individual and corporate solutions. Many insurers entering China typically tend to license either an individual or corporate solution first and then develop it (such as Aetna and Allianz), but NHI's decision to invest in licensing both solutions from the beginning clearly demonstrates the insurer's commitment to the China market. The tax-deductible, RMB-denominated product is also available not only to the classic expat market, but also to Chinese local nationals, opening up a huge market opportunity that has previously been overlooked.

Neil Raymond, CEO of Pacific Prime commented: "We are really pleased to see the effort and commitment that Now Health are putting into China, they have an experienced management team and a clear vision of what they want to do and how they want to operate. In fact, our only real issue is the complexity of their pricing model as they have so many options."

Now Health has chosen to make a wide range of options available so clients have the capability to customize their plans and control costs in China, one of the most expensive countries in the world for private health care. These options have created a certain amount of confusion for clients who often require sufficient advice and guidance to help them select the right plan. However, the new options do mean that plans can become quite bespoke. The options include:

1) Restricted access to High Cost Providers - clients can choose to have either a co-insurance, or complete exclusion for treatment at more expensive facilities to help bring down the cost of the insurance significantly.

2) Co-insurances on in and outpatient options - clients can reduce the cost of their health cover by introducing co-insurances on inpatient and outpatient options, an unusual feature from an insurer.

3) Private room restriction - this option allows policyholders in China to considerably reduce costs by only staying in a semi private room (if hospitalized in Hong Kong), or by paying a co-insurance in a private room for admission in expensive facilities in mainland China. China has a bizarre pricing structure in private hospitals in that patients pay more for medical treatment if they stay in a private room than if they stay in a semi private room.

4) Greater China option - this option limits cover to the Greater China region (Mainland China, Hong Kong, Taiwan and Macau) thereby benefiting those clients that have no need for coverage other than within this specified region. However, it should be noted that this does not reduce the premium by a large amount as the cover in China is almost as expensive as anywhere in the world outside the USA, the UAE and Singapore.

These types of options require an excellent intermediary capability to be able to explain and advise clients as well as a sufficient operating and support system to insure that plans and claims can be managed successfully. Now Health has invested heavily in putting these systems into place and the rewards are now starting to show as service levels that have been achieved, even with a complex product structure and numerous compliance and jurisdiction issues, are well above those of competitors in the market.

The fact that Now health have not made any alterations to their plans with regards to this year is a testament to the depth of research and local knowledge the China based team at Now Health have to offer, showing considerable promise regarding their placement in the market in the future.

The final piece of the service proposition that NHI appears to have got right in China refers to their direct billing provider network. NHI has implemented a very comprehensive network including all of the major private clinics and hospitals such as Parkway, American Sino and United Family. Direct billing is often overlooked by most other insurers but in an increasingly competitive market, this will be an important differentiating factor. Furthermore, with very high utility for clients, this will be especially beneficial to policyholders in China where the 'pay and claim back' model is extremely cumbersome due to a poor postal system, expensive banking transaction costs and a currency that is not freely convertible.

Further to this, the fact that Now health have hired staff to create their own network, as opposed to accessing an existing network through a third party administrator, will allow the insurer to maintain control and provide immediate resolution of any possible issues that clients may experience, resulting in high levels of customer satisfaction and maximizing their client retention.

For these reasons, direct billing is almost essential to be considered a competitor in the market. Neil Raymond commented: "Now Health seems to have got most things right with their approach to China. Plans and service capabilities are sound and the direct billing network is excellent. The only remaining issues we have revolve around payment frequency and the small premium discrepancy between on and offshore plans which we would like to see closed. In the long term though, we are sure Now Health is going to be a key player here".

The upcoming year will be the first full year of operation in China for Now Health and Pacific Prime is very positive about the company's ability to have a significant impact in the market. Despite being a relatively new entrant, the experienced and focused management team, together with the 'zero' premium increase in the February rate review, will definitely make for an attractive proposition to clients in 2013.

Jan 07, 2013

InterGlobal Makes Strategic Moves with Pacific Prime to Provide Advantage in Health Insurance Market

InterGlobal has been a leading player in the expat/global health insurance business since 1999 but faced a number of challenges as the economic recession hit in 2009. Rapid growth in the large corporate segment around 2009 created operational and underwriting problems leading to a restructuring of the company, both financially and in terms of strategic…

InterGlobal has been a leading player in the expat/global health insurance business since 1999 but faced a number of challenges as the economic recession hit in 2009. Rapid growth in the large corporate segment around 2009 created operational and underwriting problems leading to a restructuring of the company, both financially and in terms of strategic objectives. This has resulted in InterGlobal refocusing its marketing and execution objectives back to its traditional key individual and SME health insurance products aimed at expats and high net worth's around the world with very positive results.

Pacific Prime has seen a number of very positive changes in 2012 which have lead to 'good growth' and positive client experiences. A few of the changes from 2012 include:

InterGlobal opened its Singapore office in 2010 but 2012 saw the office develop and mature from an operational and execution basis. The focusing of efforts on a market and local service and support have led to better client experience and growth in one of the world's leading global financial centres. Pacific Prime also has an office in Singapore and the close partnership between InterGlobal and Pacific Prime has started to create brand awareness in the local market, which is encouraging.

Fully Medically Underwritten plans were introduced in 2012, providing clients with pre-existing conditions the option to have their conditions covered with a premium loading. This additional product feature opens up InterGlobal to a new large segment of the market. Few global private health insurers offer this capability despite the fact that it is uncommon for individuals in their 40s, 50s and 60s to not have a pre-existing medical condition. While such conditions may not always be serious, they can still quickly become expensive and many would undoubtedly appreciate having their conditions covered.

Direct Billing facilities have been expanded around the world but some particularly positive developments have been made in the key markets of Hong Kong, Dubai and Singapore. Outpatient direct billing is often overlooked by insurers when developing health insurance plans but potential clients tend to place this feature high in their selection criteria when choosing an insurance provider. In 2012, InterGlobal launched an exclusive agreement with Pacific Prime in Dubai for individual outpatient direct billing and further expanded its corporate direct billing network. This feature will benefit clients immensely and is likely to lead to further growth in the future.

Emergency assistance support has continued to improve and InterGlobal has extended its relationship with Red 24. Also in line with this improved service and assistance model, InterGlobal started working with Mobile Doctors in Dubai to provide first line telephone medical assistance to clients and to direct them to the most appropriate medical facilities in the Middle East.

InterGlobal has had a long standing presence in China through its partnerships with RSA, AXA MinMetals and in 2012 when ICBC became the majority shareholder, InterGlobal began working with ICBC AXA. Developing a powerful and efficient distribution and operational model in China is a major challenge but InterGlobal has continued to invest in the country and made some important decisions in 2012 which should see its presence in the China market grow.

Finally, in terms of its corporate structure, InterGlobal, which became an insurer in 2007 with the backing of leading UK private equity firm Alchemy, reinforced its financial backing at the end of 2011 when AXIS Capital (the parent company of InterGlobal's principal re-insurer) also invested in the company. This development will align the insurer's and re-insurer's interests for profitable and sustainable growth.

The list of important and strategic changes over the past 12 months has left InterGlobal in a great position for 2013. Neil Raymond, CEO of Pacific Prime commented: "InterGlobal was one of the first dedicated international private medical insurance companies in the market and they continue to be in a unique position. They have a lot of distribution capability and some good products. We feel that the increased focus on service and profitable and sustainable business in really important for them. It's clear that the management team at InterGlobal are becoming very specific about how to go about this and this is great news for the future".

InterGlobal's business with Pacific Prime grew in the year 2012 over the previous 12 months which is remarkable in a challenging and increasingly competitive market. The list of powerful new entrants with individual policies such as Cigna and Now Health will require InterGlobal to continue to up its performance but it is well positioned to do so.

Jan 03, 2013

Pacific Prime Records Best Year to Date with William Russell in 2012

William Russell has been a leading player in the international private medical insurance market for over two decades. Over the past 10 years, Pacific Prime has actively supported the insurer and 2012 saw the best financial results to date.

Pacific Prime puts this good performance down to the opening of…

William Russell has been a leading player in the international private medical insurance market for over two decades. Over the past 10 years, Pacific Prime has actively supported the insurer and 2012 saw the best financial results to date.

Pacific Prime puts this good performance down to the opening of William Russell's new sales support office in Hong Kong, which has enabled the company to deliver better service and support to Pacific Prime and its clients across Asia.

In more good news, William Russell has announced their revised premium rates for 2013 and these have come in below the typical rates of medical inflation witnessed over the past 5 years. Respectively, premium increases are set at 7% for the inpatient Bronze plan, 7.5% for the Silver plan and 9% of the comprehensive gold plan.

Interestingly, in Hong Kong, China and Singapore the Gold plan premium will increase by 10.75%, highlighting the challenges that some key South East Asian markets propose where medical inflation is very prevalent.

Overall, the increases are very much in line with William Russell's historical performance and once again, are below the average of the rates released by other insurers for the 1st of January. The only other major international insurers to come in with lower rates of premium increases are Allianz Worldwide Care and Interglobal.

William Russell also seems to be making a strategic shift in direction for 2013 and will be dropping their Platinum plan. While renewals will continue to be supported, it will no longer be open to new business. As such, William Russell will be returning to its core plans; Gold, Silver and Bronze. Pacific Prime views this refocusing of the core plans as a major contribution to William Russell's success over the past 20 years and as the Platinum plan had been increasingly uncompetitive in the market place, such a move seems to makes sense.

Neil Raymond CEO of Pacific Prime commented: "William Russell has always focused on delivering high quality plans at affordable rates to our clients; they continue to do this in a sustainable way. The recent changes to the plan benefits on Gold, Silver and Bronze plans are very positive, especially on the Gold plan".

These changes on the gold plan specifically refer to the increased coverage on the Chronic Conditions benefit which is now fully covered for Outpatient. Furthermore, newborns will now be covered up to USD 100,000 and complications of pregnancy will be covered in full on the Gold plan. The silver plan has also seen some improvements and HRT will now be covered in full for 12 months.

William Russell has always had a significant presence in Asia, allowing them to understand Hong Kong's unique pricing structure whereby the price paid for surgeon and anesthetist fees is based on the room type chosen by the patient. In other words, a surgeon can charge a patient staying in a private room more than a patient in a semi private room. While there is little logic to this system, it has remained this way for some time and is unlikely to change in the near future.

In response to this, William Russell offer Hong Kong Pacific Prime client's a discount of between 7.5% and 15% on the premium if the room type selected is restricted to a semi private room. This was an approach first adopted by Goodhealth (now Aetna) but is becoming more common for insurers with exposure to Hong Kong in an attempt to try to control costs.

Mr Raymond commented on the semi private room discount: "It is always difficult to explain to clients why the room you chose determines what your surgeon will charge, we agree that there is little logic behind it but in fact it is a way to control insurance costs and so for those on tighter budgets it is a good way to manage premiums. We would encourage more insurers to offer this option to clients".

Pacific Prime anticipates that 2013 will be a very positive year for its clients attached to William Russell policies and the 20 year heritage in health insurance will put William Russell in a good position in an increasingly competitive market place.

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