The health insurance industry in Southeast Asia is slated to grow to US$24 billion by 2020 at a CAGR of 15%, four times its previously valued size of $6 billion in 2010. The next six years will see increasingly affluent consumers in the region drive demand for health policies to pave access to more advanced healthcare, say Roland Berger Strategy Consultants in a recent study.
“As disposable incomes and the number of wealthier consumers spike in the region, personal health is fast becoming the number one priority for them,” said Mr Philippe Chassat, Partner and Head of Financial Services Southeast Asia, Roland Berger Strategy Consultants, and a co-author of the study.
This wealthy group, the “Mass Affluent”, cover more than 17 million households, where 69% of them reside in the six largest economies in Southeast Asia. “With proliferation of wealth, people are prepared to pay more and in return, they want to avoid the long waiting time, access to the safest and latest medical technologies, and be given the assurance to get the best logistical support from top healthcare facilities,” he said.
Insurers in the region also stand to benefit from the growth of group corporate policies, where the segment – consisting of multinationals, large domestic corporates and the upper-end of SMEs – is slated to increase share of premiums from an estimated 20-25% in 2010 to 35-45% by 2020.
Despite increasing demand, insurers will need to keep premiums affordable to grow the industry and recommended for insurers to tightly manage their portfolio profitability. To do so, insurers will need to closely cooperate with healthcare providers in Singapore and in the region, improve claims management capabilities and streamline operating processes, he said. It is also necessary to balance individual policies – the most profitable segment – with group policies, the fastest growing segment.
“Managing costs is not only a matter of reducing individual claim costs but also implementing preventative measures. While insurers can negotiate rebates and caps for specific procedures or impose requirements for second opinions to reduce overbilling, they can also develop a comprehensive approach that fosters early and preventative checkups, promotes healthier lifestyles and offers better after-hospitalisation care to reduce remission,” said Mr Chassat.
Source: eDaily | 29 Aug 2013