HEALTH INSURANCE REPORT 2017

Transcription

1 HEALTH INSURANCE REPORT 2017

2 Content Abbreviation Public Health Insurance 36 Summary Private Health Insurance Business Environment 7 Life Insurance Macroeconomic situations 7 Non-life Insurance Legal Framework Private Health Insurance Investigation Trade Agreements Products Overview of Health Insurance Market Sales Channel The History of Development Premium Payment Methods Industry Characteristics Compensation Methods Global Health Insurance Market Opportunites and Threats Public Health Insurance Opportunities Private Health Insurance Threats 62 Life Insurance Business Analysis 66 Non-life Insurance Business Introduction Vietnam s Health Insurance Market Financial analysis The Size of Industry Appendix 82 2

3 Abbreviation FS Financial Statement IAV The Insurance Association of Vietnam ISA Department of Insurance Supervision Administration MoIT Ministry of Industry and Trade MoF Ministry of Finance MoH Ministry of Health VSS Vietnam Social Security VIRAC Vietnam Industry Research and Consultant Joint Stock Company 3

4 Summary Total market value of health insurance industry has grown rapidly over the years at a CAGR of 17.4% for the period e. health insurance has continued to increase over the years. Currently, most high-tech, high-cost services are being covered by health insurance, Public health insurance accounted for about 80% of the market value of health insurance, however, the distribution ratio was declining. Health insurance overspending has increased over the years, 4

5 Summary According to the Department of Insurance Supervision Administration (ISA), by the end of 2016, the whole market has a total of In fact, the percentage of people owning an insurance policy is still very low. Revenue from health insurance premium in Vietnam has continued to grow over the years at a CAGR ( ) of Health Insurance is Life Insurance always accounts for more than The number of life insurance contracts in Vietnam has continued to grow over the years at a CAGR ( ) of. Currently, Vietnamese people are tending to choose practical products, 5

6 Summary Currently, there are 5 main sales channels used by major health insurance companies, including: However, health insurance market still faces many challenges Cash and bank transfer are the most common This page is methods intentionally used by businesses to removed compensate for demo purpose In order to create favorable conditions for customers, insurance companies have developed many payment methods of insurance premium. 6

7 Content 1. Business Environment 1.1 Macroeconomic situations 1.2 Legal Framework 1.3 Trade Agreements 7

8 1. Business Environment 1.1 Macroeconomic situations The GDP growth rate in 2016 is estimated to increased by 6.21% compared to GDP growth, e Revenue from medicine and medical services has risen sharply in The reasons are Source: VIRAC, GSO USD GDP per capita, GDP per capita has continued to increase over the years at a CAGR of Source: VIRAC, GSO 8

9 1. Business Environment 1.1 Macroeconomic situations Consumer price index of the whole country and the price index of Medicine and Health services in 2016 % VND/USD exchange rate, Source: VIRAC, SBV Source: VIRAC, GSO The price index of Medicine and Health services has been kept stable and lower than or equal to the consumer price index of the whole country. VND/USD exchange rate tends to increase gradually by the end of

10 1. Business Environment 1.1 Macroeconomic situations Population Structure, Trends in fertility and increasing life expectancy Source: VIRAC, GSO The population aging as well as the government efforts to expand access to health care for people make 10

11 Content 1. Business Environment 1.1 Macroeconomic situations 1.2 Legal Framework 1.3 Trade Agreements 11

12 1. Business Environment 1.2 Legal Framework Decision No. 36/2005 / QD-BYT dated October 31, 2005 Regarding the issuance of high-tech, high-tech services Service Detail Service Detail * For details of services refer to Decision No. 36/2005 / QD-BYT 12

13 1. Business Environment 1.2 Legal Framework The Law on Insurance amended and supplemented in 2014 has many changes compared to the Law on Health Insurance No.25/2008/2012 Expanding subjects participating in insurance: Social insurance is responsible for paying health insurance for people who is being on maternity leave. Regulation on issuing the health insurance card for children under 6 years old 13

14 1. Business Environment 1.2 Legal Framework The Health Insurance Law amended and supplemented in 2014 regulates the level of health insurance benefits in case of incorrect level. Health Insurance Law No 25/2008/QH12 Law No 46/2014/QH13 14

15 1. Business Environment 1.2 Legal Framework On 15th May 2017, the Ministry of Finance has issued Circular No. 50/2017/TT-BTC guiding the emplement of Decree No.73/2016/ND-CP. It has regulated the emplement of Law on Insurance Business and Law amending and supplementing a number articles of the Law on Insurance Business in detail. Some highlights amended and supplemented: 15

16 1. Business Environment 1.2 Legal Framework 16

17 Content 1. Business Environment 1.1 Macroeconomic situations 1.2 Legal Framework 1.3 Trade Agreements 17

18 1. Business Environment 1.3 Trade Agreements After participating in the TPP 18

19 1. Business Environment 1.3 Trade Agreements Although insurance industry is seemed to have many opportunities,, insurance businesses will be faced with many difficulties when Vietnam participates in the TPP. 19

20 Content 2. Overview of health insurance market 2.1 History of Development 2.2 Industry Characteristics 2.3 Global health insurance market 2.4 Vietnam s health insurance market 20

21 2. Overview of health insurance market 2.1 History of Development Until 1990 In In now 21

22 Content 2. Overview of health insurance market 2.1 History of Development 2.2 Industry Characteristics 2.3 Global health insurance market 2.4 Vietnam s health insurance market 22

23 2. Overview of health insurance market 2.2 Industry Characteristics Public health insurance Model of health insurance management and operation (in public) Source: VIRAC 23

24 2. Overview of health insurance market 2.2 Industry Characteristics Public health insurance Unit Function, Obligation Source: VIRAC, Decree 01/2016 / ND-CP 24

25 2. Overview of health insurance market 2.2 Industry Characteristics Private health insurance Private health insurance Activities by insurance product groups in detail Group Product details Insurance business are divided into 5 groups Source: VIRAC 25

26 Content 2. Overview of health insurance market 2.1 History of Development 2.2 Industry Characteristics 2.3 Global health insurance market 2.4 Vietnam s health insurance market 26

27 2. Overview of health insurance market 2.3 Global health insurance market Public health insurance The proportions of people participating in health insurance (public health insurance) in the developed countries are The proportions of people participating in health insurance (in public and private) in some of OECD countries in 2015 Source: VIRAC, OECD Statistic The ratio of payment outside of health insurance (in public) in some countries, 2016 The ratio of payment outside of health insurance indicates the coverage of health insurance benefits. Source: VIRAC, OECD Statistic 27

28 2. Overview of health insurance market 2.3 Global health insurance market Public health insurance Medical expenditure in some big countries, 2016 Billion USD America is a country has medical expenditure China s medical expenditure is Source: VIRAC, The International Trade Administration State budget expenditure on health in some big countries, 2016 Billion USD Population and medical expenditure per capita in some big countries, 2016 Million people USD Source: VIRAC, The International Trade Administration Source: VIRAC, The International Trade Administration 28

29 2. Overview of health insurance market 2.3 Global health insurance market Private health insurance market Life insurance Although the business context is unfavorable with stricter legal regulations and declining economic growth Global life insurance market, f Thanks to strong growth from emerging markets, especially in Asia Source: VIRAC, Swiss Re Life insurance in some developed countries, f Source: VIRAC, Swiss Re 29

30 2. Overview of health insurance market 2.3 Global health insurance market Private health insurance market Life insurance In terms of product structure, in 2016, in the face of slow economic growth and latent risks Besides, in order to increase profitability, life insurance businesses are tending to move on An other trend is In 2016, the portfolio of life insurance businesses is still focused on 30

31 2. Overview of health insurance market 2.3 Global health insurance market Private health insurance market Non-life insurance Global non-life insurance market, f In developed countries, the growth rate of insurance premium Source: VIRAC, Swiss Re The non-life insurance market in 2016 is seen a slight decline and reached The non-life insurance market in some developed coutries, f Source: VIRAC, Swiss Re 31

32 2. Overview of health insurance market 2.3 Global health insurance market Private health insurance market Non-life insurance In the Asian market, Therefore, the growth rates in developed countries are expected to slow, while revenues of insurance premium in emerging markets are expected to 32

33 Content 2. Overview of health insurance market 2.1 History of Development 2.2 Industry Characteristics 2.3 Global health insurance market 2.4 Vietnam s health insurance market 33

34 2. Overview of health insurance market 2.4 Vietnam s health insurance market The size of industry Billion dongs The market value of health insurance industry, e The total market value of health insurance industry is made up of two groups: Source: VIRAC, MoH, ISA e 2016e Public medical expenditure Revenue of health insurance - non-life insurance Revenue of life insurance Total market value The total market value of health insurance industry has increased rapidly over the years at a CAGR in the period e of 34

35 2. Overview of health insurance market 2.4 Vietnam s health insurance market The size of industry Public health insurance account for Market structure by group, e However, the contribution ratio of public health insurance in health insurance market is because Source: VIRAC, MoH, ISA 35

36 2. Overview of health insurance market Public health insurance The level of payment for medical examination and treatment not covered by health insurance contracts and medical examination abroad is stipulated in clauses 2 and 3, Article 9 of Joint Circular No. 09/2009 / TTLT- BYT-BTC is as follows: Medications, including western medicine and traditional medicine, are covered by the health insurance fund based on the list of drugs issued by the Ministry of Health that meet the treatment needs of health care facilities.. However, the implement of examnination and treatment is still faced with difficulties when 36

37 2. Overview of health insurance market Public health insurance market Structure of the insurance budget, 2010 and 2012 Public health expenditure (from state budget, health insurance and aid) the contribution ratio in total health budget for Source: VIRAC, MoH, ISA Allocation of health budgets by regions, 2014 The allocation and use of health insurance fund is regulated in Source: VIRAC, MoH, ISA 37

38 2. Overview of health insurance market Public health insurance The proportion of people participating health insurance continues to increase over the years Thousand people People participating in health insurance, e 3 targets of the project The implement of route toward national health insurance for the period and Source: VIRAC, MoH, ISA With positive changes from the Law on Health Insurance amended in 2014 as: : 38

39 2. Overview of health insurance market Public health insurance The Law amending and supplementing a number of articles of the Law on Health Insurance in 2008 stipulates that the subjects paritcipating in health insurance shall be as follows: Group Subjects and the contribution ratio The level of health insurance benefits Source: VIRAC, The amended Law on Insurance: Law No 46/2014/QH13 39

40 2. Overview of health insurance market Public health insurance The proportion of participants by group, 2011 The structure of participants by group, Source: VIRAC, VSS The proportion of people participating in insurance of group which is occupied by the social insurance agency accounts for Source: VIRAC, MoH 40

41 2. Overview of health insurance market Public health insurance Health insurance overspending has increased over the years, the reasons are: Articles 23. (the Law on Health Insurance amended and supplemented in 2014): cases not covered by health insurance are: The Law on health insurance No. 25/2008/QH12, Article 21, Decision No. 1399/QD-BHXH, Article 8 and the Law on health insurance No.46/2014/QH13, Article 1 Clause 14 regulate that the cases covered by health insurance are: 41

42 2. Overview of health insurance market Public health insurance Health Insurance will cover high-tech and high cost medical services which are not bigger than The level of health insurance benefit Group Currently, most high-tech and high-cost services are being covered by health insurance. Source: VIRAC, Decree No. 62/2009/ND-CP 42

43 2. Overview of health insurance market Public health insurance According to Law No. 46/2014 / QH13 and Circular 40/2015 / TT-BYT, regulations on raising the central, provincial and district levels as: The level of payment for medical examination and treatment not covered by health insurance contracts and medical examination abroad is stipulated in clauses 2 and 3, Article 9 Circular No. 09/2009/TTLT-BYT-BTC as follows: However, the implement of examination and treatment is still faced with difficulties when But the payment of drugs under health insurance is still faced many problems 43

44 2. Overview of health insurance market Public health insurance Businesses operating in the field of private insurance, 2016 ), by the end of 2016, in the whole market, there are 44

45 2. Overview of health insurance market Private health insurance Revenue from health insurance premium in Vietnam continued to increase over the years at a CAGR ( ) of Billion dongs Revenue from health insurance e Source: VIRAC, ISA Contribution structure in health insurance, e Source: VIRAC, ISA 45

46 2. Overview of health insurance market Private health insurance Life insurance Billion dongs Revenue from life insurance premium, e The structrure of revenues from premium of typical businesses, 2016e Source: VIRAC, ISA Source: VIRAC, ISA Revenue from life insurance premium in Vietnam continues to increase over the years at a CAGR ( ) of Most of life insurance businessess are 46

47 2. Overview of health insurance market Private health insurance Life Insurance The number of life insurance contracts in Vietnam continues to increase over the years at a CAGR ( ) of The number of life insurance contracts, e Billion dongs Currently, Vietnamese people still tend to choose practical products, Nguồn: VIRAC, ISA The structure of revenue from premium by products, 2016e Source: VIRAC, ISA 47

48 2. Overview of health insurance market Private health insurance Non-life insurance Revenue from health insurance premium - non-life insurance in Vietnam continues to increase over the years at a CAGR ( ) of Revenue from health insurance premium - non-life insurance, e Billion dongs Source: VIRAC, ISA The market share of revenue from original premium by businesses, 2016e Source VIRAC, ISA 48

49 2. Overview of health insurance market Private health insurance Non-life Insurance Billion dongs The structure of revenue by products, e Amount of health insurance compensation non-life insurance, Billion dongs Source: VIRAC, ISA Source: VIRAC, ISA Revenue from health insurance premium non-life insurance in Vietnam accounts for 49

50 Content 3. Private Health Insurance Investigation 3.1 Products 3.2 Sales Channel 3.3 Premium payment methods 3.4 Compensation methods 50

51 3. Private Health Insurance Investigation 3.1 Products The health insurance is the only competitive product between Inpatient Treatment Outpatient Treatment Surgery Permanent disability Accident Dead Fatal disease Maternity Dentistry Main product Additional Product Not provided Source: VIRAC 51

52 3. Private Health Insurance Investigation 3.1 Products Most of the health insurance products of the businesses are Age Contract Term (years) Request Time to browse Interest rate Source: VIRAC 52

53 Content 3. Private Health Insurance Investigation 3.1 Products 3.2 Sales Channel 3.3 Premium payment methods 3.4 Compensation methods 53

54 3. Private Health Insurance Investigation 3.2 Sales Channel Currently, there are 5 main sales channels used by major insurance companies, including: branches and trading offices, direct sales consultant, bancassurance, online channels and và other channels through other partners. Branches/ Offices Financial Consultant Bancasurance (cooperate with banks) Online Others Source: VIRAC 54

55 3. Private Health Insurance Investigation 3.2 Sales Channel The size of Vietnam s life insurance market is still very small, so it depends so much on the model of offices and financial consultants channel is about, The proportion of premium from Bancassurance Insurance products in Vietnam have not purchased so much through Other sales channels is a new direction 55

56 Content 3. Private Health Insurance Investigation 3.1 Products 3.2 Sales Channel 3.3 Premium Payment Methods 3.4 Compensation Methods 56

57 3. Private Health Insurance Investigation 3.3 Premium Payment Methods is the most common method offered by businesses to facilitate the payment of premiums of customers. Cash Bank Transfer Post Office Onl Others Provided Not provided Source: VIRAC 57

58 Content 3. Private Health Insurance Investigation 3.1 Products 3.2 Sales Channel 3.3 Premium Payment Methods 3.4 Compensation Methods 58

59 3. Private Health Insurance Investigation 3.4 Compensation Methods businesses are the common methods used by businesses to pay insurance compensation to customers. Besides, in some insurance Cash Bank Transfer Pay directly to the service provider Source: VIRAC 59

60 Content 4. Opportunities and Threats 4.1 Opportunities 4.2 Threats 60

61 4. Opportunities and Threats 4.1 Opportunities 61

62 Content 4. Opportunities and Threats 4.1 Opportunities 4.2 Threats 62

63 4. Opportunities and Threats 4.2 Threats In spite of high and stable growth, the health insurance market still has a small scale compared to its potential The unreasonale allocation of funds Vietam Social Security (VSS) is ineffective 63

64 4. Opportunities and Threats 4.2 Threats The payment outside the health insurance is a high level in the region. Pharmaceutical expenditures make up a large proportion of the state budget The payment outside the health insurance, Source: VIRAC, World Bank 64

65 4. Opportunities 4.2 Threats More and more businesses are offering health insurance products so that it leads to fiercer competition. The resolvement of compensation is still faced with problems. 65

66 Content 5. Business Analysis 5.1 Business Introduction 5.2 Financial Analysis 66

67 5. Business Analysis 5.1 Business Introduction Bao Viet Group Bao Viet Insurance Net revenue from insurance business activities of Bao Viet Insurance, Billion dongs Source: VIRAC, Bao Viet Group 67

68 5. Business Analysis 5.1 Business Introduction Prudential Vietnam Life Insurance Co, Ltd. Prudential Net revenue from insurance business activities Prudential, Billion dongs Source: VIRAC, FS of Prudential 68

69 5. Business Analysis 5.1 Business Introduction PVI Insurance Corporation PVI Insurance Revenue from insurance,reinsurance and brokerage activities of PVI, e Billion dongs Source: VIRAC, IAV 69

70 5. Business Analysis 5.1 Business Introduction Manulife Company Limited (VietNam) Billion dongs Net revenue from insurance business activities of Manulife, Source: VIRAC, FS of Manulife 70

71 5. Business Analysis 5.1 Business Introduction Dai-ichi Life Insurance of Vietnam Company, Limited Billion dongs Revenue from insurance business activites of Dai-ichi life, Source: VIRAC, FS of Dai-ichi life 71

72 5. Business Analysis 5.1 Business Introduction AIA (Vietnam) Life Insurance Company Limited Billion dongs Net revenue from insurance business activities of AIA, Source: VIRAC, FS of AIA 72

73 5. Business Analysis 5.1 Business Introduction PETROLIMEX INSURANCE CORPORATION (PJICO) PJOCO INSURANCE Billion dongs Net revenue from insurance business activities of PJCO, Source: VIRAC, FS of PJICO 73

74 5. Business Analysis 5.1 Business Introduction Chubb Life Insurance Vietnam Company Limited Net revenue from insurance business activities of Chubb, Billion dongs Source: VIRAC, FS of Chubb 74

75 5. Business Analysis 5.1 Business Introduction Hanwha Life Insurance Company Limited (VietNam) Billion dongs Revenue from insurance business activites of Hanwha, Source: VIRAC, FS of Hanwha 75

76 5. Business Analysis 5.1 Business Introduction Prévoir 76

77 Content 5. Business Analysis 5.1 Business Introduction 5.2 Finacial Analysis 77

78 5. Business Analysis 5.2 Financial Analysis Billion dongs Profit after tax, Source: VIRAC High profit is still concentrated in the long-term enterprises in the insurance market in Vietnam as: 78

79 5. Business Analysis 5.2 Financial Analysis Rate of return, Source: VIRAC 79

80 5. Business Analysis 5.2 Financial Analysis Billion dongs Cost from insurance business activities, Source: VIRAC 80

81 5. Business Analysis 5.2 Financial Analysis Billion dongs Total Assets, The financial capacity of insurance businesses is increasing steadily Source: VIRAC Debt Structure,

82 Content 6. Appendix 82

83 6. Appendix Bao Viet Group BALANCE SHEET Million dongs INCOME STATEMENT Million dongs

84 6. Appendix Prudential BALANCE SHEET Million dongs INCOME STATEMENT Million dongs

85 6. Appendix PVI Insurance BALANCE SHEET Million dongs BÁO CÁO KẾT QUẢ HOẠT ĐỘNG KINH DOANH Million dongs

86 6. Appendix Manulife BALANCE SHEET Million dongs INCOME STATEMENT Million dongs

87 6. Appendix Dai-ichi life BALANCE SHEET Million dongs INCOME STATEMENT Million dongs

88 6. Appendix AIA BALANCE SHEET Million dongs INCOME STATEMENT Million dongs

89 6. Appendix PJICO BALANCE SHEET Million dongs INCOME STATEMENT Million dongs

90 6. Appendix Chubb BALANCE SHEET Million dongs INCOME STATEMENT Million dongs

91 6. Appendix Hanwha BALANCE SHEET Million dongs INCOME STATEMENT Million dongs

92 6. Appendix Prévoir BALANCE SHEET Million dongs INCOME STATEMENT Million dongs