There is likely to be consolidation of insurers in the Hong Kong international private medical insurance (IPMI) market, according to Pacific Prime.
And to stay competitive, traditional insurers need to evolve by focusing on additional areas, such as environmental, social and governance (ESG) and digitisation, the advice firm added.
Stevie Erard, general manager at Pacific Prime Hong Kong said: “Further consolidation of the market is very likely in Hong Kong,” he said in the Pacific Prime report The State of Health Insurance 2023.
“Against the rise of insurtech, growing focus on the Greater Bay Area (GBA), and lingering impact of the pandemic, the local market needs to evolve to focus on additional areas like ESG and digital,” Pacific Prime said.
“More Hong Kong-based insurers are incorporating ESG into their business operations to stay competitive by revolutionising the underwriting and investment standards, for example, and designing new products to address key coverage gaps and pandemic-related losses.”
Hong Kong has now emerged from the Covid pandemic amid changing consumer behaviour, a growing focus on the Greater Bay Area region, and the long-lasting impact of the pandemic according to the analysis.
“Transitioning into the new normal, Hong Kongers are changing their spending behaviour to weather the twin financial impact of the pandemic and inflation,” Pacific Prime said.
“Consumers are also keenly aware of their diminishing purchasing power and are spending less on certain non-essentials. However, health remains a priority.”
As a result, consumers are just as likely to shop online than to shop in person post-pandemic, with a significant jump in policies sold online for the past few years.
And insurers in Hong Kong are responding to the post-pandemic change in spending behaviour and health consciousness by adopting a customer-centric mindset Pacific Prime said.
Erard said: “As Hong Kongers continue to be more health conscious, early detection of illnesses is on the rise.
“This further exacerbates the pressure on insurers as premium rates follow suit.
“Insurers are rethinking their benefits design to better manage claims and provide premium sustainability for their clients.”