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.