International Private Medical Insurance Inflation - 2018

International Private Medical Insurance Inflation - Thailand

Thailand’s emergence as an "ASEAN country to watch" when it comes to healthcare has been fairly constant for some time now. As the country continues to invest in its health sector to attract a larger stake of the medical tourism market, it has challenged neighbors like Singapore on grounds of value in health services. Its rising treatment and facility standards are catching up to more developed nations, while still remaining relatively inexpensive by comparison.

In 2017, the International Private Medical Insurance (IPMI) inflation rate in Thailand held somewhat steady, reducing only slightly on the figure from 2016. Unlike its more expensive neighbors (China, Hong Kong, and Singapore), Thailand did not see the drastic drop in the IPMI inflation rate, and its increase remains above the Consumer Price Inflation rate. In relation to its previous “low-cost country” grouping from previous years, Thailand has maintained a similar trend to the Philippines.

Thailand’s IPMI inflation rate for 2017 was 7.4%; 0.4% lower than it was in 2016. It was similar to the global IPMI inflation average, 7.3%, and was significantly higher than the country’s Consumer Price Inflation rate of 0.6%. This indicates that IPMI inflation remains unaffected by the country’s Consumer Price Inflation.

Furthermore, when looking at the CAGR (Compound Annual Growth Rate) from 2009 to 2017, IPMI premiums in Thailand actually increased at an average of 7.33% per annum in that time frame. It is fair to say that barring any drastic changes, this increase will continue.

Inflation by insurer in Thailand

Premium inflation in Thailand has been nothing short of dynamic. Compared with 2016, three out of the eight insurers had reduced IPMI inflation rates in 2017. Most insurers that saw an increase in their inflation rates saw only modest movement, while - across the board - 2017 saw all IPMI inflation figures drop under 10%. Unlike in Singapore, China, and Hong Kong, Thailand did not see its Cigna Global plans reduce to a negative IPMI inflation rate, which has helped its average IPMI inflation remain steady.

One interesting change from previous years is that Cigna Global’s negative IPMI rate was seen in Indonesia, but not Thailand or the Philippines. This is significant as our previous reports have often considered Thailand, the Philippines, and Indonesia to have been grouped together for pricing purposes by our focus insurers.

Even in light of this, Indonesia’s insurers outside of Cigna Global returned identical IPMI figures to Thailand and Philippines, indicating their grouping as a low-cost region may still remain.

Thailand inflation drivers

Thailand insurance prices have been impacted by a number of new and familiar drivers this year.

  • Imbalance of resources: In a country that prides itself on the standard of its medical industry, the ratio of doctors per 1,000 population was as little as 0.39 in 2010. This can indicate the country is still struggling to place its resources in areas of needs versus areas of prioritized focus.
  • Healthcare overuse: The number of people using hospitals for minor health problems, such as a common cold or minor case of diarrhea, has increased since the introduction of low-cost healthcare in Thailand. This has stretched capacity further and, in some cases, resulted in bankruptcy and insolvency.
  • Slow tech sector: In a study of digital readiness, Thailand has been found to suffer a talent shortage, producing fewer digital products, and a lack of policy support to promote innovation. Out of 11 Asia-Pacific nations, Thailand was ranked 10th overall as a “digital nation”.

Of our newly identified drivers, Thailand’s IPMI inflation has seen the following have some emerging influence on costs:

  • Economic slowdown: 2016’s economic woes for Thailand continued in 2017 as the country turned to face its new future, with the ruling military junta hoping to boost productivity with big-ticket projects aimed at improving its infrastructure.