HONG KONG, May 21 (Bernama-BUSINESS WIRE) — High out-of-pocket payments by patients at private hospitals and overwhelming demand for public health care underscores the need for further development of Hong Kong’s health insurance sector, according to a new AM Best market segment report. With the recently launched Voluntary Health Insurance Scheme (VHIS), which encourages individuals to utilize insurance protection, and the subsequent regulatory approval for more than two dozen insurers to launch VHIS insurance products, the uptake of health insurance in Hong Kong should grow significantly.
In the new Best’s Market Segment Report, titled, “Growth Opportunities Abound in Hong Kong’s Health Insurance Market,” AM Best notes that while insurers are cognizant of and keen to leverage the growth potential, they must also be mindful of challenges affecting profitability and sustainability of the health insurance business. Total non-life gross premiums from direct medical insurance expanded robustly, with year-over-year growth rates rising to 11% from 4% in a five-year span (2013-2017). As direct medical products account for approximately three-quarters of the accident and health (A&H) line, A&H business now represents the largest share of domestic non-life gross premiums written, at 33% as of 2017. Despite the strong growth momentum, the A&H line of business has shown declining profitability. A&H underwriting performance has remained close to breakeven and the underwriting margin has declined sharply. Additionally, the expense ratio on direct medical insurance has continued to edge upward, to 21.3% in 2017 from 18.9% in 2013.
