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Bupa to Increase Child Insurance Premiums in China

Posted on Mar 26, 2013 by Sergio Ulloa ()

With the recent release of Bupa's April 1st, 2013 premium adjustments for the Premier Worldwide Health Options plan based out of China, some major adjustments to child coverage could give reason for Parents to show concern. Bupa have changed the design of premiums for young children by introducing specific rates so that children in the 0 - 6 age bracket will have differing rates for those in the age 7 - 20 bracket. In addition, an increase ranging from 25% to 50% for children in the lower of the age brackets will occur, and a 6.1% increase in the elder children's' age bracket, meaning that the rates for a child aged 0-6 will now be higher than that of older children.



For young children, the premium increase has shown some extreme variation across the range of modules and deductibles available on the PWHO plan. The 'WMI' inpatient only module has increased uniformly across all deductibles by 32%. The 'WMP' outpatient consultation module however, has increased by 37% for children on a nil excess. While this increase may seem high enough in itself, it is overshadowed by the 50% increase for clients on the $170 excess option. Furthermore, the dental/wellbeing and medicine modules have also both increased uniformly by 25% for this age bracket. This is an extreme contrast in comparison to the older children age bracket, which saw the same increase as all other adult ages at 6.1% for all modules and deductible levels.

This dramatic surge in costs may be disappointing to parents but it highlights that offering the best coverage to Bupa's clients is more of a concern for the insurer rather than the cost entailed. Their WMP module offers excellent cover for children aged 0 - 6 including high levels of wellness checkups and vaccination cover. Rather than perhaps reducing the benefits specific for young children that have obviously shown high usage levels in China, Bupa prefer to keep the coverage as the best possible on the market, though with a high price point to match.

Once children reach the age of 7, their premium will again drop back to the lower amounts for this age bracket, which is proving to provide some relief at least for concerned parents. However, for clients with children in the younger of the two age brackets, who do not necessarily wish to avail of the child wellness on offer, this dramatic rise may make the plans difficult to justify if the amount being paid is not fairly reciprocated in the benefits received. There will be many families who did not choose to include the module with child wellness, though their child's premium will still increase by a minimum of 25%, a number that is significant enough in itself despite being half of the increase recorded for premiums of young children within the same plan on the WMP module.

This premium increase is surprisingly contrary to the rest of Bupa's adjustments made for their other location based plans. Bupa have historically shown an edge over other insurers by nearly always showing stability in their annual adjustment and have always been one of the market leaders in international insurance. Despite being one of the pioneers for this market and even after a long history of success, the insurer is still relatively new to the Chinese market, having launched their product roughly two years ago, so adjustments such as these can be expected to ensure future premiums remain stable.

Child alone cover is a continuing point of discussion in the Chinese market with some insurers offering extended cover to children alone where they may not have normally offered this outside China, and some insurers offering limited cover for children alone compared to the rest of the world. Now Health, for example, will cover children alone for plans that are processed in China, though they will not offer this for plans processed in other parts of the world. In contrast to this, Interglobal offer cover for children alone on all levels of their plans outside China, though their policies in China (licensed via AXA-ICBC) will only offer children alone cover on their lower level plans. Trying to educate the market to understand the true value of a product that is so new has been a difficult task for all insurers and brokers alike.

Despite this unforeseen increase, Bupa are still highly dedicated to the Chinese market and are showing this by making adjustments to their premium to ensure accuracy and fairness for all clients so that their premiums can remain steady going forward. Pacific Prime's analysts suspect that the Increase for this age bracket will not be as extreme at the adjustment.
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