Medical insurance in the Greater Bay Area
Over the first half of 2019, Swiss Re Institute conducted a consumer survey of over 2,500 respondents on the needs and preferences for private medical insurance in the Greater Bay Area (GBA). Survey results indicated significant potential for Hong Kong-based insurers to sell products to Guangdong province residents. Key success factors will be credibility, claims reliability, and coverage of medical conditions.
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Towards greater integration in services
The GBA is already well integrated in terms of trade and infrastructure. The next stage of integration will come in financial services. Insurance will play a crucial role in this step, partly because of the high vulnerability of GBA to natural catastrophes, but also as a result of a significant health protection gap (an estimated USD 50 billion in Guangdong province). Rising income levels and risk-awareness of health issues are key drivers of medical insurance demand. Cross-boundary health insurance can help close the health protection gap, support the government's GBA development plan and Healthy China 2030 ambitions, while serving the needs of the residents in the GBA.
GBA survey respondents are concerned about rising medical treatment costs and quality of care. The most desired insurance product is medical protection; with interest in critical illness (CI) insurance rising with age and income. Consumers seek credibility in their insurers; claims reliability; and a wide coverage of medical conditions when considering medical insurance products.
Currently, only 14% of respondents had previously purchased insurance from Hong Kong-based insurers. There remain concerns of different contract interpretations across three GBA jurisdictions, as well as currency transfer regulations in purchasing from Hong Kong-based insurers. However, our research indicates that interest increases significantly when coverage includes medical expenses within Hong Kong. Importantly, GBA residents favour pure protection CI insurance products over product bundles with a savings component. The aged 25-34 segment living in Tier 3 cities were most interested in purchasing insurance from Hong Kong-based insurers.
Hong Kong insurers operating in the Greater Bay Area
Based on our results, Swiss Re Institute would recommend Hong Kong insurers continue to expand their physical presence in the GBA, while also investing in their digital presence. Increasing common access to financial products between Hong Kong and the GBA represents a significant step towards the creation of a single insurance market across the region.