Medical Insurance: From awareness to protection

How insurers in Asia can help consumers meet their increasing needs for medical insurance products and services?

As people live longer, delivering adequate medical care funding will become one of the most pressing public policy challenges in Asia. With the cost of treatment on the rise, while government financing has a role to play, people will also need to draw on other funding source including insurance, which represent a significant market opportunity for the industry.

To better understand consumer attitudes towards medical insurance, Swiss Re recently commissioned a consumer survey covering six Asian markets (China, Hong Kong, India, Indonesia, Malaysia and Thailand) and more than 2,500 respondents aged 20 to 70 years, focusing on demand drivers and barriers, consumer perceptions and preferences for products, services and channels.

All markets surveyed in this study exhibit a very high level of awareness of medical insurance products, but penetration varies significantly. A tangible gap exists in selected markets, which also represents a window of opportunity for medical insurers. This penetration gap is significant in markets like Indonesia and India, but less so in markets like Malaysia and China, where it is somewhat negated by group medical coverage or basic government coverage. The challenge for insurers is to translate awareness into ownership, especially in markets where a huge gap exists.

Irrespective of the level of medical insurance penetration and the extent of government support, patients still rely very heavily on personal funds or family support to pay medical expenses in the markets surveyed. At the same time, in high ownership markets, the existing products either come with low reimbursement rates and/or significant limits on coverage. This is reflected in (1) a low ratio of claims among owners, partly on the out-patient side; (2) high out-of-pocket expenses among owners; and (3) a high intention to purchase among existing owners.

Thus, we see significant but different opportunities in these markets. In high ownership markets, people are still eager to buy, though they are looking for better products than those they currently own (in terms of reimbursement rates and coverage). In low ownership markets, people want easy entry products or ones that supplement government coverage.

As a result, value-added features (family plans, wide coverage, etc.) are of particular importance to consumers in high ownership markets, which are looking for enhanced and more comprehensive benefits and services. In low ownership markets, increased education combined with products that are simpler to issue and tailored to meet consumers’ immediate needs, may also be a catalyst for purchase.

Key findings:

  • High awareness of medical products across Asia
  • However penetration varies significantly – so its high in markets like Hong Kong but low in markets like Indonesia and India
  • There continues to be a high out of pocket spend across markets and thus a need to better educate the consumers on the value of medical insurance
  • Consumers are willing to pay more for higher benefits and coverage, where concern for having a catastrophic illness and inability to pay are high
  • There remains a high intention from consumers to buy a new medical product in the next 12 months
  • In low penetration markets cost is a challenge and consumers may be looking for more simple low cost solutions
  • Consumers are happy with the overall service and product from insurers but there are areas for improvement
  • Consumers generally view the healthcare they receive from the medical profession as good, although the perception is much higher in some markets than others
  • They will not always follow doctors' advice though, citing reasons such as cost, not necessary and wanted another opinion

Swiss Re is pleased to present the full report exclusively to its clients. Breakfast forums were held in Kuala Lumpur and Jakarta to engage clients and help them better understand consumer attitudes and preferences on medical insurance products to deal with their increasing medical needs in those countries.

If you are interested to know more about the report, please contact your client manager.


Close to 100 participants from insurance companies in Indonesia attended the Swiss Re Executive Breakfast Forum held in Jakarta on 4 April

Published April 2014


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