Asia remains a relatively high economic growth area, according to the first Willis Towers Watson Asia Insurance Market Report. The report offered projections for the Asian insurance and reinsurance market in 2017. It highlighted the general continuation in rate reduction in the past year, the rising popularity of InsurTech, and the new risks brought by increasing incidences of terrorism, geopolitical instability and regulatory reforms.
For the health insurance market, Willis Towers Watson presented its outlook for four countries: Hong Kong, Indonesia, The Philippines and Vietnam. Here are some of the keynotes from each country’s market analysis.
In Hong Kong, the insurance sector is dominated by the life segment with insurance premiums driven by high savings rate and demand for retirement income solutions for its ageing population. The forecast for accident and health insurance is equally rosy. These segments are “likely to see near double-digit rate expansion owing to inflation in the healthcare sector”. Meanwhile, insurers should expect an increase in cost of regulation as Hong Kong begins a statutory mode of regulation. The Office of the Commission of Insurance in Hong Kong issued a Guidance Note to “strengthen policyholder protection for all long term business sold in the region”.
Indonesia shall see a steady growth in health insurance as companies invest more in employee health and benefits. There is also strong interest in health and life protection among the general public. The Universal Health Coverage system supported by the Indonesian government (BPJS) is an exciting development in the health and benefits sector. This program aims to provide all citizens with access to basic medical coverage by end 2018. For 2017, insurers should watch out for the cutthroat competition and demand for electronic insurance solutions.
The growth of the insurance sector in the Philippines will likely remain modest. The country’s 2% insurance penetration rate is due to “limited affordability and lack of insurance education among the general population”. The weak volume of new business pushed insurers to cut rates to remain competitive. In April 2016, the regulatory body issued a Circular containing regulations for the provision of health micro-insurance products and services. This aims to make health insurance accessible to the general population especially the low-income households. “A drastic uptake of micro-insurance is anticipated in the coming years,” the report stated.
In Vietnam, the strength of the health insurance market is attributed to a reduction in group discounts to increase net premiums. The country recorded a premium income of USD 190 million in 2016. There is a potential growth in Global Wellness and Benefits Advisory services as insurers are looking into controlling their high loss ratios.
Overall, Willis Towers Watson’s data shows that there is great potential for growth in Asia’s health insurance market. Insurers are challenged to take advantage of technological innovations such as mobile connectivity to reach more people and better their services. To look at the full report from Willis Towers Watson click here.