Friday, 23 November 2012

Chinese shun foreign medical insurers

Pacific Prime is receiving mixed signals on the domestic demand for high end health insurance plans in China. Most key international medical insurance providers such as Bupa International, Cigna, Aetna and AXA have now created onshore partnerships to offer comprehensive medical insurance plans to locals, but these plans are not performing as well as expected.
Pacific Prime works closely with these insurers and while some are retrenching, others are remaining positive and moving ahead with new solutions targeting this sector.
Pacific Prime clients partnered with ICBC AXA in China were offered a new plan in the form of the 'China Executive Plan' last December 2011. The plan targeted local nationals and offered benefits at lower costs than typical expat medical insurance policies. This month however, the plan was pulled due to an unsuccessful take up rate and/or the possibility that it did not perform financially as well as expected.
Pacific Prime has also monitored Bupa International's moves and how they are coping with the China market. Previously, Bupa offered a stand-alone child policy and while the take up rate was expected to be high, it will no longer be widely made available. Analysts believe this is due to poor financial performance, possibly indicating that local nationals are aware of high end medical insurance plans but view them more as a 'cash swap' rather than buying them for protective reasons.
In Pacific Prime's opinion, the intermediaries serving the local market and their potential clients both need to be better educated about the benefits of a high quality health insurance solution before take up rates will improve.
It is clear that there is a steadily growing demand from local high net worth individuals which will undoubtedly culminate in a sophisticated domestic market, it is just a question of timing. Hoping to get the timing right, Cigna will launch a new plan by December 2012 and Pacific Prime clients will have even greater choice when selecting a China health insurance plan.

Pacific Prime is hopeful that the increasing range and sophistication of plans available to expats and local Chinese nationals will continue to grow and develop this market.
 Read more: PR Newswire

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