HEALTHCARE FUNDING IN RETIREMENT A GROWING CONCERN IN ASIA
Source: Swiss RE, 7 January 2013
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.”