China featured in 2017 International Private Medical Insurance inflation report

Pacific Prime 2017 IPMI inflation report image

Pacific Prime China is excited to announce that our global partner Pacific Prime has released the 2017 annual edition of the International Private Medical Insurance (IPMI) inflation report, which reveals the overall 2016 global premium inflation rate and presents analysis on premium prices charged by top IPMI plans offered by leading insurance providers in 10 key locations around the world. These countries are categorized into the following regions: Southeast Asia, Middle East, and Rest of World.

Presented in an easy to read format, this report is highly recommended for anyone interested in looking at how much they’re paying for IPMI, and should also be of high interest for insurers looking for information on premium prices in the various regions.

This article presents an overview of the findings from the latest IPMI inflation report. To access the report, click here for the website version, or click here to download your FREE PDF copy.

Key findings on global IPMI inflation

Pacific Prime’s report reveals that the average global IPMI inflation rate in 2016 was 9.2% – the exact same as the inflation rate in 2015. As shown in the graph below, the inflation rates observed in 2015 and 2016 have significantly increased from the 2014 inflation figure of 7.1%. The inflation rate in 2015 was around 5 percentage points higher than the average Consumer Price (CP) inflation rate in the countries included in this report – this remained consistent in 2016.

IPMI inflation in China

China has seen an increase in demand for quality healthcare services from the middle classes and an improved perception of health insurance. The average IPMI inflation figure in China hiked up to 12.06% in 2016 – 2.86% higher than the average global IPMI inflation rate, and a significant increase from China’s 2015 inflation rate of 9.5%. The trends impacting IPMI inflation in China include the maturing insurance market and growing government health regulations.

Key IPMI inflation drivers

As with the previous reports, the following 4 long term inflation drivers continue to make up a strong part of the explanation behind IPMI inflation:

  • New medical technology: The high costs of new medical technology research are usually passed onto patients by increasing healthcare fees, subsequently leading to inflating premium prices.
  • An imbalance of healthcare resources: Due to a range of factors including the ageing population, the imbalance of supply and demand for healthcare resources continues to increase – insurers cover the risks posed from growing demand by inflating premiums.
  • Increased compensation for healthcare professionals: The rising salaries of medical professionals are covered by rising healthcare costs, thus leading to the rise in premium prices.
  • Healthcare overutilization: There’s a growing trend towards the introduction of state-provided mandatory insurance in various regions, such as in the UAE. This has led to an increased strain on healthcare and an increase in the number of claims submitted, and insurers are responding to this by hiking up premiums.

The 2017 IPMI report has also identified 3 newly emerged trends driving premium inflation:

  • Global economic uncertainty: Global, regional, and domestic pressures have had an impact on the low economic growth observed in the countries included in this report, all of which influence IPMI through flow on effects. For example, China has experienced a growing resistance to foreign expat workers as GDP slows.
  • Changing population dynamics: The report has identified an expat “exodus” in some of the most popular expat locations, such as in Singapore and the UAE. Despite slowly dwindling expat numbers in certain regions, there’s an observable growth in demand for IPMI from increasingly wealthy local populations and high networth individuals (HNW).
  • Increasing availability of technology: Although technology has not yet had a significant impact on IPMI, Pacific Prime predicts this IPMI inflation driver will increase in force in the foreseeable future. For example, as the use of big data continues to become increasingly sophisticated, the management of insurance premium inflation may see an improvement in the years to come.

For a more in-depth analysis on the 2017 IPMI inflation report findings, you can view it here and download it for FREE here. If you’d like to have a chat with us, feel free to contact us today and one of our insurance advisors will be in touch shortly.

Pacific Prime China is now on WeChat!

Pacific Prime China WeChat QR Code

Pacific Prime China is excited to announce the launch of our very own portal on popular Chinese messaging platform WeChat – a welcome new addition to our current repertoire of social media accounts already on Facebook, and LinkedIn. Joining an active user base of 846 million, the official Pacific Prime China WeChat account now offers a whole host of exciting new features exclusive to our followers. To avail these perks, simply follow us on WeChat (WeChat ID: PacificPrime) today!

Pacific Prime China meets Chinese market trends

In joining the ubiquitous WeChat platform, Pacific Prime China taps into a whole new audience of avid users – more than 90% of WeChat users go on the messaging app every day, and over 50% of users use WeChat more than 1 hour daily! By keeping up-to-date with the latest market trends in China, Pacific Prime China joins in with 560,000 other official company accounts on the most popular online community channel in China.

With a current active user base that is hiking its way up to the 1 billion user mark, WeChat has far surpassed Twitter’s 317 million users and is steadily catching up with Facebook’s 1.79 billion active users. Interestingly, corporate workers form the largest user group on WeChat, making up 40.4% of total users.

More than just a messaging platform

Pacific Prime China sees enormous potential in finding new ways of personalizing our services to existing and new clients on WeChat, especially when looking at the different ways that users are currently engaging with the platform. For example, not only are people communicating via chat, but they are also engaging on its social media platform “Moments” with friends and companies – a significant 61.4% of users go onto WeChat Moments when they open the app.

Another popular feature is WeChat Payment, which links WeChat with the user’s credit card. There are now 200 million users connected to WeChat Payments, and this highly availed feature has even seen over 8 billion “red envelopes” sent over WeChat during Chinese New Year in 2016!

Key features offered in new Pacific Prime China WeChat portal

Here are a key few of the many exciting new features that you can expect from the new Pacific Prime China WeChat portal:

  • Claims processing: Existing clients of Pacific Prime China can now access their policy details, easily process claims, and also change their policy information.
  • Assisting new clients: Our WeChat portal allows us to assist our new clients with regards to securing their new policies
  • Access to a dedicated service team: We now have a dedicated team servicing our WeChat account, helping you with any questions you may have.
  • Keeping you informed: Followers will be able to access exclusive blog articles so that they can stay up-to-date on the latest, most important market information relevant to the insurance industry, covering topics related to expat health insurance, general insurance, health trends, and many more.

Don’t forget to follow us!

To access the exciting new features now available on Pacific Prime China’s latest portal, be sure to follow us via our WeChat ID: PacificPrime, or by scanning the QR code below:

Pacific Prime China WeChat

 

Interested in learning more about our WeChat portal or the plans that we offer? Contact us today and our team of insurance advisors will be more than happy to have a chat.

Tips for reducing health risks from air pollution in China

Blog on reducing air pollution health risks

As you are probably aware, the harmful effects of air pollution in major Chinese cities has been a cause of ongoing concern for the population’s health and wellbeing. One of the main reasons for such high pollution levels is the observably poor compliance to environmental standards at industrial plants, and with China producing the highest total industrial output globally, harmful levels of PM2.5 pollutant matter (particles small enough to penetrate the lungs) are continuously emitted into the atmosphere, day in and day out.

World news headlines and social media sites continue to see the ubiquitous presence of China’s health pollution problem, and rightly so, as it tops the world in most types of air pollution due to the high presence of sulphur dioxide, nitrogen oxides, and carbon emissions. By 2017, Beijing aims to reduce its annual levels of PM2.5 from its 2013 level of 89.5 micrograms per cubic meter to 60 micrograms per cubic meter – an ambitious aim that still seems nearly impossible considering the city’s current reduction rate, with a recorded level of 80.6 micrograms reported at the end of 2015.

Especially when considering the increased mortality and premature deaths linked to air pollutant exposure, there’s a pressing need for the Chinese government to implement pollution reduction measures, especially in its major cities. From a personal perspective, there are also a number of things you can do to reduce the health risks associated with air pollution, a key few of which are addressed in this article.

What are the health risks associated with air pollution?

A staggering 1.6 million deaths in China per year have been attributed to toxic air pollution, as air pollutants have been reportedly linked to a number of health risks. Certain groups of people are more susceptible to air pollution health risks than others, such as pregnant women, the elderly, young children, people with heart disease, and people with lung conditions.

According to Spare The Air, some of the health risks associated with exposure to heavy air pollution include:

  • Cardiovascular disease, e.g. stroke
  • Respiratory conditions, e.g. asthma
  • Loss of lung capacity
  • Reduced resistance to infections
  • There’s also an increased risk of lung cancer from prolonged exposure to air pollution

While there are groups of people that are particularly vulnerable to these health risks, even the healthiest of individuals may develop some of the symptoms common from pollution exposure, such as wheezing and dry throat. This is why it is important for anyone living in major cities within China to mitigate the health risks caused by air pollution.

Top tips for mitigating health risks from air pollution

The health risks mentioned above may seem scary, but there are a few things you can do to minimize them.

Stay indoors

One method of significantly reducing exposure to air pollutants is to stay indoors, especially during high air pollution days. To check air pollution levels in your area, be sure to follow government warnings and local news. It may also help to look at real-time China pollution maps (like this one).

Although air pollution particles do infiltrate indoors, its concentrations are typically much lower indoors than outdoors. To lower the infiltration of air pollution, an article in the Journal of Thoracic Disease suggests closing windows, as this action alone can effectively reduce air exchange rates by approximately 50%.

Consider buying an indoor air purifier

You may also want to buy an air cleaning device (e.g. a high efficiency particulate air (HEPA) filter) for your home, as this can help reduce the concentrations of air pollution and the levels of PM2.5 indoors. The rate at which pollutants are removed will depend on a range of factors such as the size of your home and the ventilation rate of your air purifier.

Try to stay away from heavily trafficked roads

If you’re going out for a jog or cycling around the city, it’s highly advised to stay away from heavily trafficked roads to avoid traffic-related air pollutants. These include particles from combustion engines, tire and vehicle wear, and road dust. If you have been walking near any major roadways, it’s a good idea to wash your clothes and take a shower after you get home to rid yourself of harmful fine particles.

Wear a protective mask

Sometimes, it’s hard to avoid being out during polluted days, especially when you have to commute to work. It might not look very fashionable, but wearing a protective mask or even a personal respirator can significantly help lower your exposure to air pollutants on urban streets, and can be especially beneficial for people who are more susceptible to health risks caused by air pollution.

Final advice

As revealed in this article, air pollution in China can really have a negative impact on your health, so it’s important to secure a private health insurance plan so that you are protected in the event that you require quality medical treatment from private or international hospitals. If you’ve got any questions on health plans, contact our team of experienced advisors today.

Private health insurance demand set to increase in China

Boom town Shenzhen to show equal boom in private health insurance in China

In a recent article, we took a look at critical illness insurance in China, what it is, and how it’s set to increase in popularity in the country over the next 4-5 years. This prediction came from a report that took a look at the changing expectations of consumers combined with government schemes and efforts to push people to purchase private health insurance options. When it comes to critical illness insurance it was reported that there was RMB 169 billion in premiums sold in 2015, and by 2020 this is expected to grow to RMB 700 billion. But this report didn’t just cover critical illness insurance. In fact, there was another insurance segment discussed that is expected to have even bigger growth in the same period: private reimbursement insurance

 

What exactly is reimbursement insurance?

Before we look into the expected growth of private health insurance in China, it is first a good idea to define what exactly reimbursement insurance is. While this term is used in the report from Boston Consulting Group, it is not generally known outside of the insurance industry. In fact, even some of our staff members had a bit of a tough time defining it!

When it comes to private medical insurance, reimbursement insurance is a term used to describe health insurance plans that reimburse you for medical costs. These are the most common type of health insurance plan available and are usually what most people think of when they talk about “health insurance”.

In China there are three main levels of reimbursement/medical insurance plan available:

  1. Supplementary medical insurance – These are plans that are available to all residents in China, and are in fact mandatory for most residents to secure, as they are one of the five major social insurances that you contribute to each month. As such, limits are usually quite low and care is restricted to public hospitals only.   
  2. Low to mid-range medical insurance – These plans are not linked to your social insurance, but rather are developed to offer coverage in China only. As such, they are usually only sold by local (China-based) insurers and will offer adequate coverage for most common medical concerns. That said, they will usually also have low limits and stricter terms and conditions, which could limit where you receive care e.g., only a set number of hospitals and clinics.
  3. High-end medical insurance – These plans were historically designed for expats and high net worth individuals looking to receive care from the best private hospitals in the country. As such, they offer high limits and will often cover almost all medical conditions. Beyond that, many are international in nature, meaning care will be covered outside of China.

Of the three levels of plans above, the second and third are considered to be private health insurance while the first is considered to be public health insurance. The main difference being that at the private level, plans are not subsidized by the government and there is no requirement (in China at least) that you secure private health insurance.

 

Growth of private health insurance in China

Historically speaking, the private health insurance market in China has been dominated by critical illness policies. According to the report by the Boston Consulting Group, the market value of private health insurance (comprised of both critical illness and reimbursement plans) was RMB 241 billion in 2015. Of this, critical illness policies comprised the majority, just over 70%, of health plans sold. These percentages are predicted to change drastically in the next few years, with reimbursement plans expected to have faster growth.

How fast? Well, based on data from the report, it is predicted that reimbursement plan premiums will increase from RMB 72 billion in 2015 to RMB 400 billion in 2020. If these numbers play out, this equates to a 456% increase in premiums. Compare this to a predicted 314% increase in critical illness insurance premiums.

 

Why is this going to happen?

Industry experts including Pacific Prime China believe that this growth is possible, as there are three current conditions in place that will enable growth including:

  • The number of private hospitals is growing – According to a report published by Research and Markets, the number of private hospitals increased from around 3,200 in 2005 to just over 12,500 in 2015. This means there has been a CAGR 2005-14 of 16% for private hospitals versus 2% for public hospitals. The key here is that private facilities likely won’t accept the public insurance plans, which means if people want to receive care from these facilities, they will need private insurance. Beyond that, as we reported earlier this year, the government has introduced measures to increase private hospital investment.
  • The government is introducing policies to encourage people to buy private insurance – Earlier this year the government introduced a pilot scheme that gives people a tax rebate if they secure private health insurance. Schemes like this are sure to help drive demand for private insurance.
  • There is increasing demand for better quality care – Finally, anyone who lives in China is likely well aware that the public hospitals, especially those in large cities, are overcrowded and usually don’t offer a high quality of care. As such, many people are demanding better quality care and are turning to the private system to get it. Care at some of these facilities can be expensive, so insurance is necessary, and only private insurance plans offer coverage limits high enough to afford people care at these facilities.  

 

What does this mean for people securing health insurance?

This growth is sure to be good for the industry, but what does it mean for those who actually secure and use private health insurance plans? One of the biggest things we believe will happen is a dramatic increase in the number of plans available in the country. These plans will more than likely spur competition, which means you can expect to see plans offering varying levels of coverage and premiums, along with important extras, including wellness coverage, etc.

Another benefit of the increase in the number of private medical policies purchased is that China could see an increase in the quality of care offered at these facilities. Historically speaking, while some private facilities offer a quality of care comparable to that seen in the west, many usually tend to fall short. With a larger customer base, insurers can help push for better and more efficient care, which benefits each party involved.

With a larger number of plans and hospitals to select from, health insurance in China will likely become an even tougher market to navigate. To help ensure you get the highest quality plan, it is going to be more important than ever to work with a broker like Pacific Prime China. Contact us today to learn how we can help.