Agenda IGP Seminar. Panel Presentation for Hong Kong. Country Panel Session Hong Kong IGP Seminar. Boston, MA USA September 11-13

Transcription

1 Country Panel Session Hong Kong Boston, MA USA September Mr. Ben Li Chief Health & Employee Benefits Officer AXA Hong Kong 1 Agenda I. About AXA II. Health Industry A. Hong Kong : Statistics B. Health Care Arrangement Public Sector Private Sector C. Indications on Claim Cost & Benefits Surgical Fees for Common Operations Projection of Medical Cost Increase in HK Industry Benchmark D. Typical Employee Benefits Plan and Premium E. Trends III. Retirement Industry A. MPF overview B. MPF Market Ecology C. Employee Choice Arrangement D. Challenges of Employee Choice Arrangement 2

2 About AXA Group Profile - AXA Group is based in France and has a history dating back to the early 19 th century. - A worldwide leading organization in financial protection and wealth management. Assets under management were HK$10,738 billion 1. - No. 1 Insurance Brand in the world that serves over 100 million customers in 57 countries 1, with 1 AXA customer in every 10 people in the world 2. - AXA has 214,000 employees worldwide. 1 As of 31 December Calculated based on the world population as of 1 Mar 2102 from the U.S. Census Bureau Ratings - from three highly recognized international credit rating organizations, reflecting our strong financial strength^: * Standard & Poor s AA- * Moody s Aa3 * Fitch AA- ^ As of 31 March About AXA Hong Kong Profile - AXA HK is a member of the AXA Group and has commenced business in Hong Kong since Provides a wide range of insurance, investment and retirement solution for over 1 million customers in Hong Kong and Macau. - Over 1,000 staff in Hong Kong. - Strong Agency force with more than 3,900 agents contracted. Awards - The Excellent Brand of Life Insurance Service in the Hong Kong Leaders' Choice by Metro Finance for the 2 nd consecutive year since 2011 CAPITAL Merits of Achievements in Banking and Finance 2011 Life Insurance by CAPITAL Magazine Outstanding Corporate Strategy Award 2011 by Eastweek magazine. The 5 th Prime Awards for Corporate Social Responsibility 2011 by metrobox Magazine. 4

3 New Chapter for AXA Hong Kong AXA and HSBC to enter into a long-term partnership 1 in Property & Casualty in Asia and Latin America Acquisition of HSBC s P & C businesses in Hong Kong, Singapore and Mexico. 10- Year exclusive P&C bancassurance distribution agreement in Hong Kong, Singapore, Mexico, India, Indonesia and China. Upfront consideration of USD 4941M. Will position AXA as the No. 1 P & C and Employee Benefit player in Hong Kong. One organization Multi-Business Line Life, Health, Property & Casualty. Retirement Benefit AXA China Region AXA GI HSBC 1 Acquisition completion is subject to Regulatory Board approval 2 Forex rate as at 02/03/2012 AXA Hong Kong 5 Market Landscape (Corporate Health) Average Premium Health Corporate Premium 28% 13% 16% HK$ 4,186 HK$ 3,521 HK$ 4,578 AXA Hong Kong* has a commanding 28% of market share of Corporate market, we are the No. 1 Market Leader. Average premium higher than average in corporate market reflecting substantial portion of MNC clients. * Upon completion of Integration 6

4 Health Industry A. Hong Kong: Statistics B. Health Care Arrangement Public Sector Private Sector C. Indications On Claim Cost & Benefits D. Typical Employee Benefits Plan and Premium E. Trends 7 Demographic Statistics Population No. of Insured (Individual + Corporate) Employed Population* No. of Insured Employee (Corporate) Life Expectancy at Birth Male 3,314,700 (47%) - 1,862,000 (56%) years Female 3,797,700 (53%) - 1,462,200 (44%) years Total 7,112,400 2,456,000 3,324, ,000 Penetration Rate 35% 26% * Exclude Foreign Domestic Helper Source: HKSAR Census and Statistics Department. As at end of 2011 Milliman Report, October

5 Medical Incident Rate Statistics Hospital incident rate (per 100 member) Overall 14% Surgical 52% Non-surgical 48% Outpatient incident rate (per year) General consultation (include Physiotherapy/Chiropractor visits) Specialist consultation Bonesetter / Herbalist X-Ray / Lab test 7 times 0.5 time 1.5 times 0.5 time Source: AXA China Region 9 No. of Corporate Medical Statistics Corporate Medical Insurance Group Business Growth Rate (%) No. of Group Business Policies 27,306 28, % No. of Members Covered 1,449,476 1,549, % Gross Earned Premium (HKD) 4,750,076,294 5,074,286, % Overall Claim Ratio 80.9% 81.4% Source: Medical Insurance Association, Hong Kong Federation of Insurers 10

6 Health Industry A. Hong Kong: Statistics B. Health Care Arrangement Public Sector Private Sector C. Indications On Claim Cost & Benefits D. Typical Employee Benefits Plan and Premium E. Trends 11 Inpatient Landscape No. of Beds (000 ) Charges Public Hospital Private Hospital No of Bed Admission per year Intermediate Surgery (Breast Tumor) - 3 days confinement Ward HK$ Semi- Private HK$ Private HK$ Major Surgery (Removal of Gallblader) - 5 days confinement Ward HK$ Semi- Private HK$ 27,000 1,103, Private HK$ 4, ,000 50,000 80, ,000 60,000 90, ,000 Source: AXA China Region Milliman Report, October

7 Outpatient Landscape * Exclude 8,800 Chinese Medical Practitioners Charges Private Doctor HKD Private Panel Doctor HKD Government Doctor HKD General Consultation Specialist Consultation Source: Hospital Authority Milliman Report, October Health Industry A. Hong Kong: Statistics B. Health Care Arrangement Public Sector Private Sector C. Indications On Claim Cost & Benefits D. Typical Employee Benefits Plan and Premium E. Trends 14

8 Surgical Fees for Common Operations Type of Procedure Average No. of Days in Hospital Median (HKD) Private Semi-private Ward CARDIOVASCULAR SYSTEM Bypass Graft Ligation and Other Procedures ,000 17,140 16,600 DIGESTIVE SYSTEM Biliary Tract Excision 4 40,000 24,000 21,200 Intestines (Except Rectum) Endoscopy, Small Bowel & Stomal ,000 8,000 6,000 Rectum Endoscopy ,400 6,770 6,000 EAR, NOSE AND THROAT Middle Ear Repair ,505 16,000 13,450 ENDOCRINE SYSTEM Thyroid Gland Excision ,000 30,000 20,000 EYE & OCULAR ADNEXA Lens Removal Cataract ,000 16,000 15,279 Retina or Choroid Destruction ,000 9,575 8,550 Repair ,000 11,250 10,000 Source: HKFI Medical Claims Statistics Surgical Fees for Common Operations Type of Procedure Average No. of Median (HKD) Days in Hospital Private Semi-private Ward FEMALE GENITAL SYSTEM Corpus Uteri Excision ,700 22,000 18,950 Ovary Excision ,000 24,000 20,000 Uterine Laparoscopy/Hysteroscopy ,000 22,000 9,640 INTEGUMENTARY SYSTEM Breast Excision ,000 16,000 11,950 MUSCULOSKELETAL SYSTEM Forearm and Wrist Excision 1.9 7,000 7,000 5,500 RESPIRATORY SYSTEM Nose Endoscopy ,888 15,375 8,500 Source: HKFI Medical Claims Statistics

9 Medical Cost Inflation Projection of Medical Cost Increase Years Hospital Claim Cost Increase 6% to 10% 8% to 12% 8% to 12% Clinical Claim Cost Increase 6% to 8% 8% to 10% 10% Source: AXA China Region 17 Industry Benchmark Room & Board Industry Benefit Benchmark : Source: AXA China Region Recommended Level : Source : HKFI Seventy percentile level of billed medical fees 18

10 Industry Benchmark Hospital Expenses Industry Benefit Benchmark : Source: AXA China Region Recommended Level : Source : HKFI Seventy percentile level of billed medical fees 19 Industry Benchmark Surgical Fee Industry Benefit Benchmark : Source: AXA China Region Recommended Level : Source : HKFI Seventy percentile level of billed medical fees 20

11 Industry Benchmark Supplementary Major Medical Industry Benefit Benchmark : Source: AXA China Region Recommended Level : Source : HKFI Seventy percentile level of billed medical fees 21 Industry Benchmark Outpatient Industry Benefit Benchmark : Source: AXA China Region Recommended Level : Source : HKFI Seventy percentile level of billed medical fees 22

12 Health Industry A. Hong Kong: Statistics B. Health Care Arrangement Public Sector Private Sector C. Indications On Claim Cost & Benefits D. Typical Employee Benefits Plan and Premium E. Trends 23 Typical Employee Benefits and Premium Benefits Coverage Life Insurance Health Insurance Retirement Benefits Total & Permanent Disability Accidental Death & Dismemberment Critical Illness Disability Income Protection Hospitalization Supplementary Major Medical Clinical Maternity Dental Mandatory Provident Fund (MPF) ORSO Premium Allocation (Semi-Private Level) Premium Mixture (Median) Life (Term Life, AD&D, TPD) Medical In-patient Out-patient Others Total Annualized Premium Per Employee Annualized Earnings 10 15% 25 30% 45 55% 10% 100% HK$1,400 HK$1,200 HK$2,200 HK$800 HK$5,600 HK$132,000 EB Cost Per Employee 4.3% Overall Loss Ratio (Net) Life Medical 39% 76% Source: AXA China Region Hong Kong Annual Digest of Statistics

13 Health Industry A. Hong Kong: Statistics B. Health Care Arrangement Public Sector Private Sector C. Indications On Claim Cost & Benefits D. Typical Employee Benefits Plan and Premium E. Trends 25 Trend Employee Benefits Employer Employee Digital Enablement Proposition 26

14 Retirement Industry A. MPF overview B. Employee Choice Arrangement 27 MPF Overview MPF is a mandatory retirement savings regulated by MPF Authority (MPFA) under MPF Ordinance Each employer & employees contributes 5% of relevant income. The maximum Relevant Income is capped at HK$25,000. All mandatory contribution will be 100% vested to members but can only withdraw the benefits only after retirement or under several specific conditions All employers have to decide their own MPF provider; while members have to choose their own investment choices Employer and employee voluntary contribution is optional Normal retirement age under the ordinance is 65 28

15 MPF Market Ecology HK MPF Market Growth 26% CAGR 2004 HK$97b 2006 HK$164b 2015 HK$632b 2010 HK$365b 2008 HK$248b 14% CAGR 8% CAGR 2025 HK$1,488b 2020 HK$1,023b 2030 HK$2,013b Pension system usually takes 40 years to reach the maturity stage* The AUM size of HK MPF market is growing at CAGR 14% until 2015 then 8% until The source of AUM growth is the contribution of 1) growth in working population and 2) continuous and regular contribution of scheme member Source: Mercer and MPFA report 29 Retirement Industry A. MPF overview B. Employee Choice Arrangement 30

16 Employee Choice Arrangement (ECA) implication MPF Employee Choice Arrangement From Nov. 2012, Employees allowed to transfer, once a calendar year, from their contribution account the accrued benefits (i.e. the accumulated contributions and investment returns) derived from the employee mandatory contributions made during their current employment to a trustee and a scheme of their choice. (Illustration 1) Illustration 1 Before ECA 1.Employee only allow to transfer asset in Preserved Account to his selected Scheme/Trustee 2.EE accumulated contribution MUST stay in the Trustee selected by employer before ceases of employment After ECA 1.Employee is allowed to transfer the accrued benefit to a Trustee of their own choice Non-portable account Portable account Market portfolio as of Dec 2011* Active Account Preserved Account Total Number of a/c 2.57m 3.95m 6.52m ER con EE con FUM size (HKD) 139b 356b 121b 96b Portable FUM at employee own choice N N Y 139b Market portfolio by end of 2012* Active Account Preserved Account Total Number of a/c 2.57m 3.95m 6.52m ER con EE con FUM size (HKD) 155b 408b 139b 115b Portable FUM at employee own choice N Y Y 270b Additional HK$115B becomes portable (roughly 1/3 of 31 FUM) Challenges of ECA 1. Most MPF members have little concern on their retirement because it is not today s matter. 2. Many MPF members do not have much knowledge about MPF, for example: So many documents/forms, what to do? What fund to invest? Do not understand the Annual Benefit Statement, Fund Fact Sheet? 3. Choice is good, but MPF have 41 schemes and 445 funds, where to start? 4. More than 2m members in MPF with different education and investment knowledge background, where to start? 32

17 Thank you for your attention! AXA Hong Kong Mr. Ben Li Chief Health & Employee Benefits Officer T (852) E ben.li@axa.com.hk 33