The development of a hybrid international private medical insurance (IPMI) and local product in Hong Kong has blurred the market for IPMI policies there, according to Aniz Sirajudin regional IPMI leader for Mercer Marsh Benefits based in Singapore.
Combined with a much smaller expatriate market post-pandemic, the hybrid has helped to push Hong Kong down from its former position as the number one IPMI market for Asia, with Singapore now in the top spot, Sirajudin said.
Sirajudin explained that while many established companies in Singapore and existing clients in Hong Kong were keeping their IPMI policies in place, new companies coming up in Hong Kong were largely looking at providing a mixture of local and international benefits.
The result is the Hong Kong hybrid, a combination of IPMI and local plans, which can be a better product for local executives, but is found lacking for expatriates used to a higher level of service.
“We have local plans and we have international plans, but in the Hong Kong market there’s a hybrid in between. So there’s no real clarity between local and IPMI,” Sirajudin (pictured) told Health & Protection.
With a preference for that solution, there is difficulty selling IPMI in Hong Kong.
“Who do you sell IPMI to? That is always a challenge. Is it to large corporates or to C-suites – literally the globally mobile employees.“
IPMI growth markets
Sirajudin is based in Singapore, but is in a regional role with an Asia-wide perspective, with his work revolving around 11 markets including jursidictions such as Hong Kong, Indonesia, the Philippines, Vietnam, Malaysia, Korea, Japan and China.
He continued that overall, Singapore was now the most important IPMI market in Asia, with Hong Kong second, and the growth of China in third position.
Other big growth markets are the Philippines, Thailand, Vietnam and Korea for outbound expats.
But the Hong Kong hybrid means that executives sometimes have to reach into their own pockets to pay for some of their healthcare, as they are not getting the full service of the IPMI products that they are used to, Sirajudin said.
That in turn makes Singapore and other parts of Asia a more attractive destination for some executives.
Whereas Hong Kong had been the main IPMI market before the pandemic, Singapore became dominant during and after, partially because of the hybrid but also because Hong Kong was slower to come out of the pandemic.
Reason for popularity
The reason for the popularity in Hong Kong of this IPMI-local hybrid product is connected mainly to cost.
“When it comes to IPMI they are looking at it from a cost perspective,” Sirajudin pointed out.
Post-pandemic, businesses in Asia and in Hong Kong especially, have become more concerned about inflation and cost, which is prompting some companies to seek reduction of their IPMI costs.
As a result insurers, who normally would focus only on the IPMI market, are now offering a product that better addresses those concerns.
“In Hong Kong, insurers like Cigna and Bupa do offer local packages. This I believe is to compete with the local insurers like, AIA, Prudential, Axa and others,” Sirajudin said.
“These IPMI carriers also do offer full IPMI plans, but their limits can be tweaked to bring it down to make it more of a local-plus solution.
“Cigna or Bupa offer local coverages which is not the same for the Singapore market,” he continued.
Unlike Hong Kong, in Singapore Cigna, Bupa, Allianz and April do not compete in the local space, Sirajudin noted.
Singapore market
Hong Kong contrasts to Singapore, where pure IPMI is in far greater demand.
“Here if we went to a firm and said why don’t you buy it for everybody, they would probably do that. Basically, they get it from a diversity point of view and talent retention, offering it to everyone,” Sirajudin said.
“The spending power is there, the need is there, the medical inflationary pressure is there, for them to consider offering a stronger value proposition of benefits.”
That is also the case in other markets in Asia, where IPMI remains a separate clearly defined product, designed mainly for incoming businesspeople, he said.
And while Cigna has developed a type of hybrid in Singapore, it is not to compete with the IPMI market there.
“For Cigna, they have a local-plus or a hybrid plan called the Cigna Care Connect, which is in between a local and a full IPMI plan,” Sirajudin concluded.
“The difference here is that Cigna provides their services but the coverage is restricted to local networks.
“Employees do get less compared to a full IPMI plan – but with local servicing capabilities only.“