HEALTH­CARE FUND­ING IN RE­TIRE­MENT A GROW­ING CON­CERN IN ASIA

Source: Swiss RE, 7 Jan­uary 2013

Insurance - - INDUSTRY UPDATES -

Ac­cord­ing to Swiss Re's sur­vey Spot­light on Con­sumer Health; Health­care fund­ing in re­tire­ment and ris­ing re­tire­ment costs are a big worry. Asian con­sumers are con­cerned that they will not be able to fund their health­care dur­ing re­tire­ment. How­ever, in­sur­ers feel they can change through sim­pli­fy­ing their prod­ucts and ser­vices. The sur­vey was con­ducted on a group of more than 2,400 peo­ple in five key Asian mar­kets, con­sist­ing of "pre-re­tirees" (aged 40-59) and "re­tirees" (aged 60 and above). Over 60% of the par­tic­i­pants stated that they were wor­ried about their abil­ity to pay for health ser­vices and planned to rely on their sav­ings. The re­spon­dents, who hailed from China, Hong Kong, South Korea, Sin­ga­pore and Ja­pan, also said that they were con­sid­er­ing plac­ing their bets on their re­spec­tive gov­ern­ments' health­care schemes for fu­ture ex­penses. On the other hand, they doubted the abil­ity of those same gov­ern­ments to pro­vide for their needs. There is var­ied pre­pared­ness across the re­gion. For in­stance, over half of pre-re­tirees from China, Hong Kong and Sin­ga­pore be­lieve they are pre­pared for af­ter-re­tire­ment health­care ex­penses, while less than 35% of re­spon­dents from South Korea and Ja­pan said the same. Hong Kong re­tirees are the least pre­pared for fu­ture health ex­penses and own the low­est per­cent­age of health in­surance out of all the mar­kets cov­ered. Ad­di­tion­ally, they say they do not know much about health in­surance, and so they do not see the need for it, and plan in­stead to rely on their fam­i­lies to fund their re­tire­ment health­care. Low lev­els of un­der­stand­ing about health in­surance cou­pled with high costs and ex­ist­ing government fund­ing were also seen as dis­cour­ag­ing fac­tors for par­tic­i­pants in pur­chas­ing in­surance.

Ac­cord­ing to Jiji Press, Ja­pan's Fi­nan­cial Ser­vices Agency (FSA) is plan­ning to tighten reg­u­la­tion of in­surance agents that rep­re­sent mul­ti­ple in­sur­ers, act­ing on the crit­i­cism that they rec­om­mend poli­cies with the high­est com­mis­sions. Dis­cus­sions on stronger reg­u­la­tions on such agents are on­go­ing. The FSA aims to reach a con­clu­sion by the end of this year for a re­vi­sion of the in­surance busi­ness law. The dereg­u­la­tion in 1996 gave birth to agents han­dling prod­ucts of mul­ti­ple in­surance com­pa­nies. They claim to take a fair and im­par­tial stance and to help po­ten­tial clients choose in­surance poli­cies that suit their needs from plans of many in­sur­ers. Since th­ese in­surance agents are in a po­si­tion to ob­tain com­mis­sions from in­surance com­pa­nies, a mem­ber of the government coun­cil says, “they are sus­pected of se­lect­ing and sell­ing prod­ucts that give them high fees.”

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