Spotlight on Golden Age Health Swiss Re Asia Consumer Health Research 8 March 2013 a
Table of Contents Background & Research Objectives Overview: Pre-retirees & Retirement Protection Health Protection Where to approach potential customers? Key Takeouts Appendix 2
BACKGROUND & RESEARCH OBJECTIVES 3
Background & Research Objectives Market Issues & Research Objectives Increasing longevity, rising dependency, ageing population, high out of pocket healthcare expenditure, pressure on government healthcare systems are the key issues the society is facing currently. Limited information was available about attitudes to, and planning for, healthcare funding in retirement, particularly with regard to pre-retiree and retiree population Swiss Re appointed TNS to conduct a survey to understand consumers perceptions and behaviours about healthcare funding in retirement Information will be used to inform the development of consumer propositions, product development, channel and communication initiatives Focus Markets: China, Hong Kong, Singapore, South Korea (referred as Korea in the presentation) and Japan. Methodology & Sample Size for the survey* Total no. of respondents: 2,427 Fieldwork Period: 10 July 2012 to 2 Aug 2012 Pre-retirees n=305 n-=201 n=200 n=252 n=262 n=300 n=204 n=200 n=250 n=253 Average Interview Length: Online 25-30 minutes; Face-to-face 40-110 minutes 4 *Italics = Online; Regular = Face to Face
Sample Definition Consumer Profile Top 50% of the population in terms of wealth / income Target respondents China Hong Kong Singapore Korea Japan Age 40-59 (Pre-retiree segment); Age 60 or above (Retiree segment but may be working) Decision maker of financial services for self or household Top 50% of the population in terms of wealth or income Monthly personal income RMB 5,000 or above OR Monthly household income RMB 8,000 or above OR Personal liquid assets RMB 100,000 or above Monthly personal income HKD 16,000 or above OR Monthly household income HKD 25,000 or above OR Personal liquid assets HKD 300,000 or above Monthly personal income SGD 3,000 or above OR Monthly household income SGD 6,000 or above OR Personal liquid assets SGD 45,000 or above Monthly personal income KRW 2m or above OR Monthly household income KRW 2.7m or above OR Personal liquid assets KRW 400m or above Monthly personal income: ~ JPY 208,000 or above OR Monthly household income: Aged 40-59: JPY 500,000 or above: Aged 60 or above: JPY 250,000 or above OR Personal liquid assets JPY 5m or above 5
OVERVIEW: PRE-RETIREES & RETIREES 6
Demographic Profile Pre- Number of household members (%) 100% 80% 60% 40% 20% 0% 13% 78% 27% 62% 8% 9% 15% 19% 54% 28% 69% 11% 11% 1% 1% 4% 1% 37% 50% 7+ 5-6 3-4 1-2 Income Levels 2% Children under 18 C HK S KR JP 53% 47% 35% 65% 56% 44% 48% 52% 39% 61% 0% 20% 40% 60% 80% 100% Yes No Married (%) 92% 73% 83% 77% 72% Annual Personal Income Annual Household Income Personal liquid asset China RMB 90,761 USD 14,356 Hong Kong HKD 313,248 USD 40,402 Singapore SGD 67,854 USD 55,520 Korea KRW 45.6M USD 40,771 Japan JPY 7.3M USD 94,027 RMB 158,315 USD 25,041 HKD 508,979 USD 65,646 SGD 119,664 USD 97,913 KRW 62.4M USD 55,792 JPY 10.2M USD 131,380 RMB 343,565 USD 54,357 HKD 441,853 USD 56,989 SGD 73,987 USD 60,538 KRW 142.1M USD 127,053 JPY 11.3M USD 145,548 CN=China; HK= Hong Kong; SG=Singapore; KR=Korea; JP=Japan 7
Demographic Profile Number of household members ( %) 100% 80% 60% 40% 20% 0% 41% 34% 41% 50% 13% 48% 33% 52% 37% 18% 15% 1% 1% 6% 10% 1% 60% 40% 7+ 5-6 3-4 1-2 Income Levels still working (%) C HK S KR JP 4% 96% 28% 72% 55% 45% 88% 12% 59% 41% 0% 20% 40% 60% 80% 100% Working Not Working Married (%) 92% 84% 70% 82% 74% Annual Personal Income Annual Household Income Personal liquid asset China RMB 43,894 USD 6,943 RMB 123,414 USD19,521 RMB 201,643 USD 31,894 Hong Kong HKD 167,525 USD 21,606 Singapore SGD 23,605 USD 19,314 Korea KRW 22.8M USD 20,386 Japan JPY 4.4M USD 56,673 HKD 428,004 USD 55,202 SGD 102,654 USD 83,995 KRW 45.6M USD 40,771 JPY 6.9M USD 88,875 HKD 486,822 USD 62,789 SGD 52,616 USD 43,052 KRW 183.8M USD 164,338 JPY 14.9M USD 191,918 CN=China; HK= Hong Kong; SG=Singapore; KR=Korea; JP=Japan 8
Allocation of liquid assets by financial products 100% Allocation of liquid assets 12% China Singapore Hong Kong Korea Japan 4% 7% 3% 8% 6% 13% 14% 10% 80% 18% 6% 22% 19% 14% 30% 22% 10% 11% 5% 23% 7% 60% 22% 25% 30% 33% 25% 4% 5% 12% 29% 40% 20% 39% 69% 37% 77% 37% 62% 47% 77% 47% 55% 0% Average personal liquid assets Pre-retiree (USD) 54,357 Retiree (USD) 31,894 Pre-retiree Retiree Pre-retiree Retiree (USD) 60,538 (USD) 43,052 (USD) 56,989 (USD) 62,789 Pre-retiree Retiree Pre-retiree Retiree (USD) 127,053 (USD) 164,338 Savings/ deposits Investment Insurance Properties (for investment) (USD) 145,548 (USD) 191,918 9
Insurance awareness Pre- (%) 100% 80% 60% 89% 91% 94% 95% 90% 79% 85% 62% 86% 92% 94% 91% 73% 58% 40% 32% 20% 0% (%) 120% 100% 80% 60% 94% 89% 93% 91% 92% 89% 79% 46% 57% 96% 98% 76% 88% 92% 69% 40% 20% 0% Any Life insurance Any health insurance Retirement insurance 10
Insurance penetration Insurance penetration among Pre- and 100% 80% 60% 40% 90% 91% 96% 88% 79% 78% 85% 85% 65% 58% 20% 0% Pre-retirees 11
Types of Insurance owned Pre- (%) (%) China 23% 15% 46% 67% 65% 55% China 7% 5% 28% 18% 17% 43% Hong Kong 12% 11% 31% 51% 76% 72% Hong Kong 4% 2% 14% 28% 23% 58% Singapore Korea 47% 39% 20% 49% 34% 29% 10% 10% 60% 75% 74% 86% Singapore Korea 1% 2% 13% 17% 11% 15% 14% 36% 59% 57% 63% Japan 24% 40% 18% 32% 66% 66% Japan 1% 21% 29% 30% 60% 65% 0% 20% 40% 60% 80% 100% 0% 20% 40% 60% 80% Any life Personal accident Education Health insurance Annuity/Endowment Other general insurance 12
Types of Health Insurance owned Type of health insurance owned Health insurance penetration 65% 28% 72% 28% 75% 57% 74% 63% 66% 65% 200% 24% 160% 120% 80% 40% 0% 1% 29% 4% 10% 5% 5% 31% 36% 3% 47% 9% 21% 11% 22% 6% 13% 23% 13% 1% 6% 6% 44% 2% 50% 2% 11% 3% 51% 36% 1% 2% 31% 43% 5% 15% 1% 48% 20% 1% 15% 13% 4% 2% 2% 11% 17% 46% 48% 48% 44% 35% 39% 35% 21% 24% 14% Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree Medical reimbursement plan Critical illness Outpatient Hospital cash Disability income Long term care 13
Annual personal income spent on insurance premiums Pre- (%)* Insurance Spend USD 2,727 USD 4,819 USD 12,748 USD 2,857 USD 4,616 25% 20% 15% 10% 23% 19% 5% 12% 7% 5% 0% Top 3 products with highest premium paid (%) Savings with life Investment with life Investment with life Annuity/Endowment Savings with life Investment with life Annuity/Endowment # Life Education Fund # Life Annuity/Endowment Savings with life Education Fund Investment with life Education Fund Insurance Spend USD 1,458 USD 3,436 USD 2,313 USD 2,245 USD 3,339 25% 20% 15% 10% 5% 0% Top 3 products with highest premium paid 21% 16% 12% 11% Savings with life Savings with life Savings with life Annuity/Endowment Annuity/Endowment Investment with life # Investment with life # Investment with life # Savings with life # Savings with life # Life Life Life Life Life 6% *Sample sizes below n=30 are considered as small and will be marked with # ; results should be read with caution for all slides 14
Satisfaction with insurance owned (excl. group coverage) Satisfaction level of Insurance owners Totally Satisfied 100% 80% 37% 33% 28% 38% 30% 30% 12% 15% 25% 17% 60% 40% 61% 64% 72% 61% 67% 68% 85% 85% 73% 78% 20% 1% 1% 1% 2% 3% 2% 3% 2% 5% 0% Totally Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree Dissatisfied Score 1-2 Score 3-5 Score 6-7 15
RETIREMENT PROTECTION 16
Retirement Protection Issues / questions How prepared pre-retirees and retirees feel they are for retirement needs? When did they start planning financially for their retirement? And, when do they plan to retire? What is their expected quality of life in retirement? How do pre-retirees and retirees feel about government provision? What is their level of preparation in terms of savings, insurance and investment? Any plans to buy more insurance? What could trigger their interest in purchase? 17
The Journey to Retirement: Pre- Start Pre- Retirement Planning Avg. 41 (age) Avg. 38 (age) Avg. 37 (age) Avg. 42 (age) Avg. 41 (age) + + + + + Time to Plan/Save Avg. 17 (years) Avg. 25 (years) Avg. 27 (years) Avg. 20 (years) Avg. 24 (years) = = = = = Reach Retirement Age Avg. 58 (age) Avg. 62 (age) Avg. 64 (age) Avg. 63 (age) Avg. 64 (age) + + + + + Time to Spend Avg. 31 (years) Avg. 19 (years) Avg. 18 (years) Avg. 22 (years) Avg. 17 (years) = = = = = End Approaching the End of Life (estimated) Avg. 89 (age) Avg. 82 (age) Avg. 82 (age) Avg. 85 (age) Avg. 81 (age) 18 Source: Swiss Re Consumer Health Research Survey 2012
The Journey to Retirement: Start Retirement Planning Avg. 54 (age) Avg. 51 (age) Avg. 55 (age) Avg. 58 (age) Avg. 50 (age) + + + + + Time to Plan/Save Avg. 5 (years) Avg. 11 (years) Avg. 11 (years) Avg. 16 (years) Avg. 16 (years) = = = = = Reach Retirement Age Avg. 58 (age) Avg. 62 (age) Avg. 66 (age) Avg. 74 (age) Avg. 66 (age) + + + + + Time to Spend Avg. 36 (years) Avg. 23 (years) Avg. 17 (years) Avg. 17 (years) Avg. 19 (years) = = = = = End Approaching the End of Life (estimated) Avg. 94 (age) Avg. 85 (age) Avg. 84 (age) Avg. 91 (age) Avg. 84 (age) 19 Source: Swiss Re Consumer Health Research Survey 2012
Expenses during retirement Expected (Pre-) / Actual () expenses during retirement 100% 80% 60% 40% 20% 11% 8% 11% 9% 12% 11% 10% 10% 10% 9% 10% 6% 5% 1% 7% 6% 12% 13% 17% 18% 19% 19% 14% 10% 17% 13% 9% 14% 10% 16% 3% 8% 5% 5% 12% 12% 10% 11% 18% 15% 12% 9% 12% 14% 4% 6% 3% 7% 8% 7% 7% 8% 8% 8% 9% 53% 45% 45% 49% 48% 43% 36% 29% 30% 29% 11% 8% 5% 1% 19% 0% Pre- Retiree Retiree Pre- Retiree Retiree Pre- Retiree Retiree Pre- Retiree Retiree Pre- Retiree Retiree Housing & Household Expenses Insurance Investment Health & Medical Expenses Travel, Entertainment & Recreation Expenses for Children Others (clothings, donations, etc) 20
Level of Preparedness for Retirement Level of preparedness (%) 59 62 66 48 64 71 46 55 Totally/ Somewhat prepared 31 32 Totally/ Somewhat unprepared 17 12 9 22 14 9 43 20 37 20 Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree Pre-retiree Retiree 21
Quality of Life after Retirement Pre-retirees (%) (%) China 9 54 9 50 China Hong Kong 20 24 14 28 Hong Kong Singapore 19 26 16 17 Singapore Korea 62 10 71 1 Korea Japan 62 3 46 8 Japan Worse Better Worse Better 22
Preparation for Retirement: Pre-retirees Views on Government provision (%) 62 71 68 77 10 7 14 10 28 22 18 13 62 22 16 Insufficient but WILL NOT take action Insufficient & WILL take actions Not aware of Liquid assets for retirement (%) 100% 80% 60% 74% 59% 62% 61% 57% 40% 20% 0% 26% 41% 38% 39% 43% For Retirement For other purposes 23
Financial Attitudes: Pre- Financial attitudes Receive financial support from my family in retirement Strongly agree/ agree % Continue working past the normal retirement age No choice but to continue working Worry that healthcare will become more expensive Health insurance is essential for my own protection Have sufficient savings to maintain a reasonable living standard Have sufficient insurance/ investment to maintain a reasonable living standard 0 20 40 60 80 100 24
Preparation for Retirement: Views on Government provision (%) 44 51 34 50 55 20 16 22 27 27 36 33 44 23 18 Liquid assets for retirement (%) 100% Insufficient but WILL NOT take action Insufficient & WILL take actions Not aware of 80% 60% 50% 53% 45% 52% 60% 40% 20% 40% 50% 47% 55% 48% 0% For Retirement For other purposes 25
Financial Attitudes: Financial attitudes Receive financial support from my family in retirement Strongly agree/ agree % Continue working past the normal retirement age No choice but to continue working Worry that healthcare will become more expensive Health insurance is essential for my own protection Have sufficient savings to maintain a reasonable living standard Have sufficient insurance/ investment to maintain a reasonable living standard 0 20 40 60 80 100 26
Role of Insurance Annual premium paid*( as a percentage of annual personal income) 25% 20% 15% 10% 5% 0% 19% 21% 12% 16% 22% 12% 11% 7% Pre-retirees Amount of liquid assets in investment 35% 28% 5% 6% 21% 14% 7% 0% 30% 14% 33% 22% 25% 22% 6% 7% Pre-retirees 25% 29% 27
Future insurance (any) purchase intent Pre- (%) (%) China 57 China 15 Hong Kong 36 Hong Kong 18 Singapore 29 Singapore 9 Korea 27 Korea 8 Japan 14 Japan 10 28
Types of insurance products considering to purchase for self or family in next 12 months Pre- (%) (%) China Hong Kong 65% 63% 53% 34% 30% 17% 53% 58% 31% 11% 13% 19% Singapore 45% 71% 22% 33% 21% 21% Korea 33% 64% 13% 23% 7% 4% Japan 33% 78% 19% 28% 3% 8% 0% 16% 32% 48% 64% 80% 40% 76% China 31% 29% 7% Hong Kong Singapore Korea Japan 81% 89% 58% 39% 8% 31% 33% 72% 6% 6% 32% 79% 5% 5% 40% 84% 12% 16% 4% 4% 0% 20% 40% 60% 80% 100% Any life Personal accident Education Health insurance Annuity/Endowment Other general insurance Any life Personal accident Education Health insurance Annuity/Endowment Other general insurance 29
HEALTH PROTECTION 30
Health Protection Issues / questions How prepared pre-retirees and retirees feel they are for future healthcare needs? What sources of funds do pre-retirees and retirees plan to use to pay for future health and medical expenses? Is government healthcare provision sufficient? How much have they set aside in liquid assets as savings for medical expenses? In the case of a critical illness, how much do they think their insurance can cover? Will they rely on family s financial support? Any plans to buy more health insurance for self or family members? What are the barriers to purchase? 31
Level of preparedness for future health expenses Level of preparedness (%) % Totally/ Somewhat prepared 50 50 60 44 74 68 31 46 34 48 Totally/ Somewhat unprepared 17 17 7 28 11 8 35 23 27 22 Retiree Retiree Retiree Retiree Preretiree Preretiree Preretiree Preretiree Preretiree Retiree 32
How do people plan to fund their future health expenses Pre- (%) 80% 64% 48% 32% 16% 0% 63% 74% 54% 73% 68% 65% 61% 50% 51% 51% 44% 48% 51% 40% 19% 34% 32% 15% 30% 20% 24% 10% 21% 15% 3% 15% 16% 6% 11% *NA (%) 100% 80% 60% 40% 20% 0% 92% 89% 77% 81% 30% 69% 58% 51% 21% 21% 48% 19% 21% 37% 39% 32% 25% 24% 30% 23% 12% 16% 22% 4% 5% 10% 4% 3% 13% *NA Government healthcare scheme Savings Insurance coverage Family Investment returns Government assistance * Hong Kong government current does not provide any healthcare insurance, but only public healthcare services and subsidies. 33
What do people think about government healthcare provision Pre- (%) % 19 16 14 12 15 65 62 63 64 48 26 10 10 13 12 6 11 10 12 11 (%) 19 25 31 10 17 44 46 34 48 41 22 21 16 10 30 13 13 12 Sufficient Insufficient and will take action Insufficient but will not take action Not aware of 35 7 34
How reliant are people on family support to fund for medical expenses Pre- (%) 30% 24% 18% 12% 6% 0% 16% (%) 55% 44% 20% 12% 15% 1% For current medical expenses For future medical expenses 3% 26% 19% 8% 6% 33% 22% 11% 0% 22% 21% 50% 48% 33% For current medical expenses For future medical expenses 32% 14% 19% 3% 3% 35
How do they allocate personal liquid assets to cover medical expenses Pre- (%) Actual amount (LC/ USD) 100% 80% 60% 40% 20% 0% (%) RMB 87,005 USD 13,780 HKD127,988 USD 16,510 SGD 19,945 USD 16,345 KRW 35mn USD 31,360 JPY 2.5mn USD32,033 75% 71% 72% 73% 77% 16% 18% 18% 17% 15% 9% 10% 11% 10% 8% Current medical Future medical Others Actual amount (LC/ USD) 100% 80% 60% 40% 20% 0% RMB 66,169 USD 10,480 HKD120,574 USD 15,550 SGD 18,283 USD 14,980 KRW 16mn USD 54,660 70% 75% 67% 67% JPY 3.3mn USD 42,280 18% 17% 13% 21% 15% 12% 12% 16% 12% 8% Current medical Future medical Others 78% 36
How do they describe their health condition Pre-retirees Very healthy Not healthy at all C 55% 44% 1% S 48% 51% 2% JP 41% 52% 6% H 33% 65% 1% K 33% 65% 2% 0% 20% 40% 60% 80% 100% Score 6-7 Score 3-5 Score 1-2 Very healthy Not healthy at all C 33% 65% 2% S 40% 58% 3% JP 42% 55% 3% H 47% 50% 2% K 23% 76% 1% 0% 20% 40% 60% 80% 100% Score 6-7 Score 3-5 Score 1-2 37
Expectations of health condition in retirement Pre-retiree HK 16% 59% 23% 1% HK 21% 55% 23% CN 19% 54% 23% 4% CN 41% 51% 7% KR 18% 55% 21% 5% KR 7% 40% 40% 11% JP 19% 53% 24% 3% JP 17% 56% 24% 3% Worried that my health will deteriorate when I get older?? SG 25% 42% 29% 4% Strongly agree Agree Neither nor Disagree Strongly disagree Retiree SG 23% 57% 17% 2% KR 21% 57% 18% 4% SG 35% 47% 19% Strongly agree Agree Neither nor Disagree Strongly disagree SG 25% 51% 22% 3% KR 3% 47% 40% 10% After retirement, I plan to make effort to stay fit and healthy?? HK 39% 38% 14% 7% 2% HK 49% 43% 7% JP 22% 53% 20% 5% JP 32% 53% 13% 1% CN 15% 47% 23% 9% 4% CN 37% 43% 16% 4% Strongly agree Agree Neither nor Disagree Strongly disagree Strongly agree Agree Neither nor Disagree Strongly disagree 38 CN=China; HK= Hong Kong; SG=Singapore; KR=Korea; JP=Japan
Perceived treatment cost and % of insurance coverage for Cancer Estimated probability of encountering cancer Estimated treatment cost Pre-retirees (%) 21% 28% 26% 32% 38% RMB 292,198 (USD 46,155) HKD 629,722 (USD 81,220) SGD 127,436 (USD 103,626) KRW ~68mn (USD 60,290) JPY ~4.4mn (USD 56,447) Perceived insurance coverage 53% 52% 67% 57% 58% Think insurance has no coverage cap (in %) 36-39% 30-31% 42-49% 27-41% 27-30% (%) Estimated probability of encountering cancer 16% 26% 26% 26% 35% Estimated treatment cost RMB 397,569 (USD 62,800) HKD 793,549 (USD 102,349) SGD 178,510 (USD 145,157) KRW ~93mn (USD 82,511) JPY ~3.2mn (USD 40,600) Perceived insurance coverage 62% 69% 78% 66% 57% Think insurance has no coverage cap (in %) 12-13% 4-6% 43-49% 4-6% 21-22% 39 39
Perceived treatment cost and % of insurance coverage for Heart Disease Estimated probability of getting a heart disease Estimated treatment cost Pre-retirees (%) 23% 27% 28% 25% 29% RMB 163,877 (USD 25,888) HKD 368,504 (USD 47,529) SGD 76,456 (USD 62,171) KRW ~33mn (USD 29,258) JPY ~4.2mn (USD 53,881) Perceived insurance coverage 50% 51% 67% 48% 57% (%) Estimated probability of getting a heart disease 15% 31% 30% 26% 28% Estimated treatment cost RMB 216,271 (USD 34,162) HKD 452,469 (USD 58,358) SGD 85,523 (USD 69,544) KRW ~61mn (USD 54,084) JPY ~2.3mn (USD 29,506) Perceived insurance coverage 45% 61% 67% 55% 55% 40
Perceived treatment cost and % of insurance coverage for Stroke Pre-retirees (%) Estimated probability of getting a stroke 20% 25% 24% 26% 29% Estimated treatment cost RMB 126,469 (USD 19,977) HKD 393,790 (USD 50,790) SGD 76,045 (USD 61,837) KRW ~43mn (USD 38,125) JPY ~3.1mn (USD 39,769) Perceived insurance coverage 47% 50% 64% 51% 56% (%) Estimated probability of getting a stroke 14% 30% 26% 31% 30% Estimated treatment cost RMB 143,445 (USD 22,659) HKD 523,085 SGD 114,262 KRW ~87mn JPY ~2.6mn (USD 33,355) China Hong (USD Kong 67,466) Singapore (USD 92,913) (USD Korea 77,136) Japan Perceived insurance coverage 41% 63% 69% 60% 54% 41
Average maximum claim amount expectations Pre-retirees (in USD'000) 250 200 167 200 186 150 127 160 137 100 83 86 61 47 57 50 22 38 132 62 31 55 75 26 67 69 11 14 43 11 20 36 33 29 30 0 Medical reimbursement Cancer / critical illness Hospital / surgical cash Personal accident Disability income Long term care (in USD'000) 120 96 72 48 24 65 32 34 18 41 69 45 37 35 23 25 14 56 107 39 75 69 83 24 49 23 67 43 66 45 37 31 16 0 Medical reimbursement Cancer / critical illness Hospital / surgical cash Personal accident Disability income Long term care 29 11 42
Types of Health Insurance considered in the next 12 months Own Any Health Insurance Plans 75% 65% 60% 45% 30% 65% 72% 75% 74% 57% 63% 66% 15% 28% 28% 0% Pre-retirees Intend To Buy Any Health Insurance Plans 40% 30% 20% 10% 0% 36% 11% 16% 21% 21% 7% 6% 8% 17% 11% Pre-retirees Medical Reimbursement 39% 42% 33% 69% 34% 22% 43% 58% - - Critical Illness 34% 49% 31% 39% 22% 11% 25% 11% 36% 52% Hospital/Surgical Cash 28% 13% 29% 53% 22% 17% 16% 11% 14% 32% 43
Key barriers to health insurance purchase Already insured by the government health insurance scheme Premiums are getting too expensive as I get older It is too expensive Do not see the need Barriers of Insurance purchase Do not know much about health insurance Already insured by my employer Do not have enough money left each month to afford health insurance premiums It is not worth it/it does not offer good value for money Health insurance would not cover me for the rest of my life % Pre- Pre- Pre- Pre- Pre- Pre- Pre- Pre- Pre- 19 19 11 21 14 10 5 31 28 24 20 12 8 10 8 13 7 47 4 N/A 18 (no govt. insurance 21 scheme in HK) 20 18 14 13 13 14 18 30 32 27 31 28 38 46 52 11 16 13 2 6 14 9 8 10 0 16 12 15 26 24 24 26 39 1 13 11 8 5 9 8 9 20 17 20 15 12 4 8 8 32 36 4 3 6 16 20 16 13 9 8 7 8 7 6 13 19 24 19 29 44 44
Triggers of health insurance purchase Triggers of Insurance purchase Peace of mind for self and/or for the family % Pre- 18 24 48 56 19 13 36 81 20 8 8 59 0 14 27 43 7 24 36 52 Anticipate higher health risk in the future Pre- 3 15 35 50 12 22 48 59 7 8 27 31 27 40 41 73 29 36 2938 Upgrade the existing medical insurance plan with more/better Pre- 11 12 44 44 3 7 26 41 7 41 15 31 2 7 20 33 4 11 14 33 For covering medical expenses to ease financial burden (for your own or family) Pre- 6 45 41 68 21 25 45 72 20 49 46 77 20 20 39 60 21 29 14 38 The premium is Pre- reasonable/affordable/not expensive 3 15 9 45 6 19 50 53 12 8 46 5 7 7 25 0 5 7 24 Most influential Reason All mentions 45
Preference of Value-added Features Features sorted by number of the top 3 preference acquired Additional cancer benefits Regular medical check-up benefits Family discount / packaging Second medical opinion Worldwide medical assistance program 24/7 Medical Advice Helpline Access to a Health & Wellness Advisers Access to an online Health & Wellness Preretirees Preretirees Preretirees Preretirees Preretirees 2 nd 1 st 1 st 1 st 1 st 1 st 1 st 1 st 3 rd 3 rd 3 rd 1 st 3 rd 2 nd 2 nd 3 rd 2 nd 1 st 2 nd 2 nd 2 nd 3 rd 1 st 3 rd 3 rd 2 nd 1 st 3 rd 3 rd 3 rd 3 rd 3 rd 2 nd 3 rd 3 rd 3 rd Dietician Services Source: D5 Potential Buyers of Health Insurance 2 nd *Home assistance service is not among the top 3 and not listed 46
Do they want to answer health related questions It is reasonable to be asked medical or health related questions 90% 72% 54% 36% 18% 90% 87% 92% 87% 61% 75% 63% 59% 87% 89% 0% Pre- Comfort of disclosing medical or health related info via different channels Channels sorted by number of the top preference acquired Retiree s Retiree s Retiree s Retiree s Preretirees Preretirees Preretirees Preretirees Preretirees Insurance agents 1 st 1 st 1 st 1 st 1 st 1 st 1 st 1 st 3 rd 1 st IFAs 2 nd 2 nd 2 nd 2 nd 2 nd 2 nd 2 nd 2 nd 4 th 2 nd Internet (Insurance Company Websites) 3 rd 4 th 2 nd 4 th 3 rd 4 th 3 rd 4 th 1 st 3 rd Bank staff 5 th 3 rd 4 th 3 rd 5 th 3 rd 4 th 3 rd 5 th 5 th Internet (Other Websites) 4 th 5 th 3 rd 5 th 4 th 4 th 4 th 5 th 2 nd 4 th Retiree s 47
How much more are they willing to pay for not answering medical questions The price of answering medical questions Standard monthly premium 50% RMB 80-100 HKD 400-600 SGD 20-50 KRW 40,000 60,000 JPY 3,000 5,000 40% 30% 49% 20% 10% 24% 29% 25% 25% 23% 20% 20% 19% 20% 0% Pre- 48 Source: Swiss Re Consumer Health Research Survey 2012
Preference on payout* Pre-retirees (%) 100% 6% 3% 8% 4% 4% 5% 3% 4% 7% 3% 5% 7% 7% 4% 8% 1% 2% 2% 3% 4% 80% 17% 19% 24% 28% 21% 28% 31% 37% 39% 37% 13% 60% 30% 15% 17% 11% 8% 13% 33% 15% 40% 14% 20% 43% 29% 57% 46% 47% 55% 50% 35% 44% 39% 0% CN - Health (%) 100% 80% 60% 40% 20% 0% CN - Others HK - Health HK - Others SG - Health SG - Others 46% 32% 52% 44% 46% 54% KR - Health KR - Others JP - Health JP - Others 2% 1% 2% 4% 15% 2% 24% 28% 27% 2% 5% 5% 2% 2% 5% 3% 31% 27% 4% 1% 3% 24% 24% 42% 30% 49% 12% 26% 35% 15% 12% 11% 14% 16% 15% CN - Health CN - Others HK - Health HK - Others SG - Health SG - Others 34% 29% 59% 56% KR - Health KR - Others JP - Health Lump sum Regular - yearly Regular - monthly Regular - weekly Payment in services JP - Others * Incl. medical reimbursement, CI, Outpatient, Hospital/ Surgical cash, Disability income, Long-term care insurance 49 CN=China; HK= Hong Kong; SG=Singapore; KR=Korea; JP=Japan
WHERE TO APPROACH POTENTIAL CUSTOMERS? 50 5 0
Channel preference for information and purchase Issues / questions Where do pre-retirees and retirees source information about insurance? Which channel do they prefer to use for insurance purchase? Reasons for the preference? 51
Top 5 Sources of Information for Insurance Channels sorted by number of the top 3 preference acquired Insurance agents Family/friends/ Colleagues Insurance companies websites Preretirees Preretirees Preretirees Preretirees Preretirees 4 th 2 nd 1 st 2 nd 1 st 2 nd 1 st 1 st 3 rd 3 rd 2 nd 1 st 3 rd 1 st 5 th 1 st 4 th 2 nd 5 th 4 th 1 st 4 th 2 nd 2 nd 1 st 1 st IFA/ broker 5 th 3 rd 2 nd 3 rd 4 th 3 rd 5 th 4 th Other insurancerelated websites 3 rd 4 th 2 nd 2 nd Bank staff 4 th 5 th 3 rd 5 th 3 rd Newspaper 5 th 4 th 3 rd 5 th 5 th TV programs 5 th 4 th 52
Channel Preference for Future Health / Medical Insurance Purchases Preference of distribution channel (%) Insurance agent 62% 39% 53% 31% 92% 44% 67% 34% 4% 24% IFA/ brokers 24% 18% 16% 31% 24% 13% 9% 19% 32% Bank 3% 6% 28% 12% 2% 2% 7% Insurance company' s website 3% 16% 3% 12% 20% 32% 10% 25% Other insurance websites 6% 12% 2% 7% 5% 19% 18% Call center/hot line 3% 6% 2% 5% 5% 11% Pre-retirees 53
What People Like About A Particular Purchase Channel? (Health/Medical Insurance) Pre-retiree Retiree Friends/ family recommend me to apply via this channel I often purchase via this channel Others Convenient 60 50 40 30 20 10 0 Fast Easy Provide me more info before I apply Friends/ family recommend me to apply via this channel I often purchase via this channel Others Convenient 90 80 70 60 50 40 30 20 10 0 Fast Easy Provide me more info before I apply A safe and secure channel Can discuss before the purchase A safe and secure channel Can discuss before the purchase A trusted channel A widely used purchase channel Can apply anywhere I want Can apply anytime I want A trusted channel A widely used purchase channel Can apply anywhere I want Can apply anytime I want China Hong Kong Singapore Korea Japan 54 54
KEY TAKEOUTS 55
Summary: Retirement Protection Pre-retirees Perceptions about quality of life in retirement are linked to feelings of preparedness: Preparedness does not equate to longer periods of time planning/savings More linked to perception of savings/investment being sufficient, and to some extent being able to rely in family support It is also linked to an intention to buy more insurance, esp. health insurance Strong fear of rising healthcare costs in retirement: more than 60% worry about this Clear belief that health insurance is essential for protection: more than 70% believe this Awareness that government provision of retirement income is not sufficient, about two thirds plan to take action 56
Summary: Retirement Protection have even higher fears about the rising costs of healthcare (more than 60% worry about this) and believe that health insurance is essential for their own protection (around 80% in Japan believe this) More than half of also think that government retirement income provision is insufficient, but fewer plan to take action hold on average 70% of their personal assets in savings/ deposits; in a low interest rate environment, this is a very risky strategy Japan and Korea appear very pessimistic about quality of life after retirement, with China the most optimistic 57
Summary: Health Protection Pre-retirees Lower levels of preparedness to meet their health and medical expenses in retirement, except in Singapore; those in Korea and Japan feel seriously unprepared for post-retirement health expenses Most plan to rely on savings, and government schemes to fund their healthcare costs; more than two thirds think government schemes are insufficient and plan to take action More than 60% believe health insurance is essential for their protection, but only around 40% feel they have adequate insurance Levels of reliance on family support to pay future health and medical expenses vary from 20% in China to 3% in Singapore Intention to purchase health insurance is moderate, ranging from 36% in China to 11% in Japan Interest in additional cancer benefits over and above traditional diagnosis benefits, and regular medical checks; barriers include perceptions of high cost and rising premiums 58
Summary: Health Protection Those in Singapore feel relatively well prepared for their health costs in retirement compared with Hong Kong, where 22% feel unprepared for their health and medical expenses in retirement Most plan to rely on their savings to fund health and medical expenses; they see government schemes as insufficient but less than half plan to take action Varied reliance on family; 50% of in Hong Kong are dependent on their families for financial support with their health and medical expenses vs only 3% in Japan Majority believe they may have ~25% chance of getting cancer, heart problem or stroke, but in reality chances of developing these conditions are much higher Significant variation in health Insurance penetration; from 63% in Korea to 28% in China and Hong Kong, and purchase intent is lower in, from 16% in Hong Kong to 6% in Korea Put off buying health insurance by perceived high cost and low awareness of about the basic need of health insurance; growing interest in health & wellness services 59
Summary: Buying Behaviour Pre-retirees More than 80% are comfortable answering health questions from their agent, broker or bank; and increasingly, online But prepared to pay a premium of up to 25% on the normal premium to avoid these: this premium is as high as 49% in Hong Kong Agents remain a key source of information about insurance, except in China and Japan where Pre-retirees prefer to use the internet Somewhat less comfortable answering health questions; Japan very comfortable answering health questions online Also willing to pay a premium of around 24% to avoid them, with China highest at 29% Agents remain the main channel for information and purchase, except in Japan where internet is growing 60
Time to ReThink ReThink: Health strategy Understand consumer needs and wants: Tap into fears about higher healthcare costs in retirement, leverage purchase intent, among both Preretirees (China, Hong Kong) and (China, Hong Kong, Japan) ReThink: Product strategy Clear, differentiated and affordable offerings at all stages of life: Develop affordable health insurance products for retirement; family plans to cover generational needs; offer 'fast track' options for time-pressured Pre-retirees (esp. Hong Kong); allow flexibility in benefit payment options ReThink: Distribution strategy Make products available through preferred and appropriate channels: Meet growing needs for both traditional & online information gathering and purchase; leverage comfort levels in answering health questions ReThink: Communication strategy Inform consumers about healthcare spend needs, affordability and availability: Generate higher purchase levels by showing the need as a hedge against future ill-health, to protect savings, and its value for money vs using up saving pot for health expenses 61
Swiss Re Solutions and Value Proposition Address concerns about affordability and value for money Offer appropriate plan terms; short, medium and long term guarantees where appropriate Severity-based cover Single illness plans (eg Senior cancer) Enhance product and channel flexibility Joint life options/ family plans Regular pay as well as lump sum benefits Online purchase and servicing Simplified issue Provide added value benefits Health & Wellness services Second Medical Opinion Worldwide Medical Assistance Competitive appetite for long, medium and short term health guarantees Proven product development, underwriting and claims expertise Exclusive partnerships and competitively priced offerings with high perceived value 62
a THANK YOU 63
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