The health protection gap in Asia: a modelled exposure of USD 1.8 trillion
Article Synopsis :
Swiss Re research shows that the health protection gap in Asia reached US$1.8 trillion in 2017.
The gap is the amount of insurance required to avoid dipping into household income or savings in order to meet future medical expenses not already covered by social security.
It compares 12 Asian markets representing 40 million households that would be forced to defer medical treatment to avoid financial stress.
Affordability is seen as the greatest challenge, higher than the emotional turmoil or waiting time required for treatment.
Despite the growth of Asian economies, medical costs are increasing faster than inflation across all surveyed markets. China and India have the biggest gaps, of US$805 billion and US$369 billion respectively. Out of pocket expenses are common – 65% in India and 30% in China – compared with the 10% to 14% of developed economies, says the report.
Almost three quarters of non treatment cases are based in these two populations, impacting 32 million households.
The most vulnerable are not necessarily the old. Those under 40 face higher financial stress, perhaps due to low coverage in this group.
Overconfidence about the state for health is a contributing factor, as is increasing affluent – and sedentary – lifestyles.
Urbanisation ageing, and income growth are set to worsen this position alongside overconfidence. For while 60% consider themselves healthy – including 61% of daily smokers – only one third exercise more often than once a month.
Those who believe they are healthy are likely to allow insurance to lapse (53%)
Insurtech may positively influence individual behaviour as wearables and health and fitness apps reach critical mass in Asia (19%).
More than three quarters (83%) would share their personal data with an insurer with around half in exchange for a better premium.
“Although Asia has been growing rapidly and people are becoming richer, access to quality and affordable healthcare continues to be a challenge in our society today. This is unacceptable in this day and age,” said Robert Burr, managing director and head of life & health client markets Asia, at Swiss Re.
“This study identifies the various factors driving the health protection gap across Asia. It’s time that all the stakeholders – governments, healthcare providers, insurers/reinsurers and non-profit organisations – work together to find solutions.”
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Digital Insurer's Comments
- The average health protection gap in Asia is almost 10% of average household income
- China and India make up 65% of the gap and more than 75% of non-treatment cases
- More than half of the gap covers those under 40 years of age
- Almost half of households have a family member with a health condition
The gap between providing medical cover and having to suffer financial hardship has grown to almost US$2 trillion in Asia, according to research by Swiss Re. Affordability remains the key concern, but consumers may be encouraged to improve lifestyle related chronic illness through the use of insurtech and wearable health devices.
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