Why Expats in the Far East are facing large premium increases in the cost of International Health Insuranceinsurance

Health insurers take a new look at world

The Daily Telegraph writes:

Gone are the days when international medical insurers divided the world into two blocs.

Radical changes in global trade triggered by the growth of emerging economies have caused international medical insurance companies to “slice up” the world in different patterns.

Until the 2000's, most insurers simply regarded the world as two blocs. One was the world, less the USA. The other was the entire world (which included the USA). Sometimes Europe would be taken as a separate entity.

China has changed that. Set to rival the USA as the leading economy, it is also set to rival it in terms of medical costs – at least for hospitals used by the expatriate community.

Medical bills faced by the international community in China far outstrip the other BRIC countries – Brazil, Russia and India.

The swing to the Far East has been pronounced and rapid, according to Kevin Melton, sales and marketing director of AXA PPP International. “I can see it in the sort of service that expatriates are expecting now in China and the Far East,” he said.

“In the UAE it was absolutely the norm that customers expected direct settlement of their bills – the policyholder would not have to produce his cheque book or credit card. The insurer would pay direct. In East Asia, the customer paid the bill and was reimbursed.

“That changed with the exodus from Dubai in 2008/9. Some of the reports of cars abandoned at the airport have been exaggerated, but you can see the fall-off in numbers – there’s much less traffic on the road. The expats have moved East and taken their expectations with them.”

So insurers are adapting. They are making direct-payment arrangements with hospitals and clinics. At the same time they have priced up premiums for people in Beijing and some other Far East locations.

Moves to selective premium setting are inevitable, according to one broker consultant.

He said: “As we see health care costs increasing in emerging markets where more and more expats are moving, so we are going to a more selective approach to pricing. It’s not just China, Singapore prices are also a worry.”

Bupa International has gone furthest down the road of splitting the globe so that premiums more exactly reflect risk and medical fees. In July 2009 the company made its first policy revision in 21 years. It split the world seven ways. Until then, no international insurer of individuals, and probably of groups, had divided the globe into more than three parts.

The World Health Options plan, which followed a £250,000 market research exercise by Bupa, also introduced pick-and-mix, allowing policyholders to choose what they wanted covered.

To see how precision pricing of premiums can pay off, take the cost of a routine appendix removal within Asia. In Beijing, it is US$12,000-15,000, in Thailand US$4,500. In Malaysia, an appendectomy costs US$6,000.

Insurers other than Bupa might well have pioneered the move to precision pricing earlier than 2009. But they lacked the data and the number-crunching facilities available to the market leader.

Bupa International then had 850,000 customers in 190 countries – figures that have subsequently increased.  “If you look at premium increases year on year in those seven different pricing zones, you’ll see the difference in pricing dependent on cost.”

The size of an insurance company’s database largely determines the extent to which it can set premiums in line with risk. Also, the greater an insurer’s customer base, the easier it is to set up good settlement terms. Hospitals need regular customer flow, just like hotels. They reward insurers accordingly. So the trend to selective premiums will mean that smaller insurers will have to depend on their traditional strengths of personal service and niche benefits.

“Bupa International is still the global name. Cigna say they are the largest in terms of number of people covered, but people still look to Bupa as market leader.”

Cigna, a US company, has traditionally concentrated on group cover, largely corporate business. But it recently entered the expat market for individually bought insurance. “Their plan is modular and very similar to the Bupa Worldwide Health Option,” 

To have such a big insurer as Cigna focusing on the market for individual buyers can only be good for customers

Ends.

Medibroker provide independently sourced, International Health Insurance for expatriates working, living or regularly travelling abroad. For free impartial quotations, information and advice visit www.medibroker.com

Shanghai expat social insurance payments

Shanghai could be delaying the introduction of a controversial new social insurance scheme to appease foreign workers and businesses, local reports suggest.

On October 15 2011, legislation came into effect which requires all foreign workers, and the firms which employ them, to pay a proportion of their salary to the Chinese government.

The tax, which can be up to 11 per cent for employees and 37 per cent for employers, is split between five separate insurance funds, covering pensions, health care, unemployment, maternity and work-related injuries.

The South China Morning Post has reported however that while officials in Beijing have drawn up guidelines as to exactly how the money should be paid into pension funds, Shanghai labour authorities have not yet done the same. Compulsory arrangements for the other insurance programmes also appear to have not yet been finalised.

According to the newspaper, company executives close to the regulators believe that Shanghai has deliberately “slowed down the compilation of the guidelines” in response to anger about the change.

The tax has proved unpopular among foreign staff because they believe they will not benefit from the money they have paid in; many expats, for example, do not use China's state-run health care facilities, and they are expected to leave the country if they become unemployed. It has also concerned businesses, as the cost of employing foreigners in China will significantly increase.

A spokesperson for the Shanghai office of Paul Hastings LLP, confirmed that Shanghai had not yet mandated that expats enroll in all five social insurance programmes, though she added that many districts permitted them to contribute voluntarily to some.

“It appears that Shanghai is not yet ready to accept foreigners into all five schemes, [and] the government has not released an official announcement or reason as to why there is a delay or as to when foreigners can expect to have to enroll,” she said. “Most companies did not budget for the additional expense in 2011, and they have already enrolled their expats into the home country pension and international medical plans.

“As soon as the national government mandates that all localities comply with the national regulations, then Shanghai will follow suit and mandate that all companies enroll all of their foreigners. We expect this to take place by the end of the first quarter of 2012.”

A Shanghai-based expat and CEO of a company based in China, said that the scheme seemed to be “an initiative that may have been announced by Beijing's central government without due consideration or consultation with the various regional governments, and as a result there has been a mixed reaction with some regions adopting it immediately, some regions planning to adopt it in due course and back date it to the announcement date last year, and others seeking to delay its implementation.

“If Shanghai is pushing back, it is primarily due to the fact that it is the international commercial capital of China and as such has the highest number of foreign employers and employees. It therefore has the most to lose from any exodus of expats, whose employers are no longer able to justify the costs of employing foreigners in key roles. “

When you are working or living abroad, or have plans of relocating into another country, it is very important that you protect you and your family’s health and their wellness.


Expatriates make sure you are covered for International Medical Insurance, April Medibroker assists & advises clients living or working abroad to both choose & place the right international Health and Medical insurance products, to suit their needs & budget.

April Medibroker is here to help you - from the initial advice on what expatriate health insurance policy to buy, through to any assistance that you may need in the future. Our staff are only a phone call or email away. Whether you need changes to cover or payment, need help with a claim or have questions about your international medical insurance policy we will gladly help.

China 'to introduce fingerprinting for foreign workers'

China is getting tough on foreign workers with plans to introduce fingerprinting across the country

All foreigners who stay in China for more than six months will be required to give their fingerprints to local police when applying for residence certificates, according to draft laws submitted to its National Peoples’ Congress this week.

This would affect all foreign workers, students and visitors who plan to stay in the country for more than half a year.

China already has stringent rules for resident permits which are given every year to foreigners working there – these include compulsory health screenings before starting a job.

Until last year China required foreigners to undergo mandatory AIDS tests before they applied for resident permits. However, this was scrapped following criticism that it discriminated people with HIV.

A spokesperson from CRCC Asia, which finds internships for British young professionals in China, said: “I feel as though this new change isn't really going to have that much of an impact on my privacy in Beijing because if the government wanted to find me they would definitely be able to do this. You already have to register your location at your nearest police station within 24 hours of arrival and need to update this permit on a regular basis."

He added: “Furthermore, the government plans in the future to enable free local wi-fi in Beijing that will need you to register your mobile phone to in order to use which would allow the government to track your internet usage. I feel as though this is definitely more of an invasion than the fingerprint analysis.”

Many expats are widely accustomed to biometric testing as fingerprint analysis has been used in the U.S following the 9/11 terrorist attacks and is also used by UK passport controls. Malaysia recently introduced fingerprinting for all visitors to the country.

According to China’s official Xinhua News Agency, bureaucrats are also looking to force foreign nationals to obtain work permits to help control illegal foreign workers. It said that as a nation with a huge supply of labour it needed to “strictly control” the entry of ordinary foreign workers while it manages the introduction of “high-end talent".

 While these are further examples of Chinese authorities making life harder for foreign workers – earlier this year it introduced a social insurance tax for foreigners – the numbers are still increasing substantially each year.

When you are working or living abroad, or have plans of relocating into another country, it is very important that you protect you and your family’s health and their wellness.

Expatriates make sure you are covered for International Medical Insurance, April Medibroker assists & advises clients living or working abroad to both choose & place the right international Health and Medical insurance products, to suit their needs & budget.

April Medibroker is here to help you - from the initial advice on what expatriate health insurance policy to buy, through to any assistance that you may need in the future. Our staff are only a phone call or email away. Whether you need changes to cover or payment, need help with a claim or have questions about your international medical insurance policy we will gladly help

Shanghai launches expat recruitment drive

China has developed a five-year plan to turn Shanghai into an international financial hub, relying on a foreign recruitment drive to increase its financial sector workforce by 40 per cent.

Shanghai has long-held ambitions to create a finance district capable of rivalling the likes of New York, London and neighbouring Hong Kong but has struggled with finding enough skilled financial professionals, especially high-level managers and sector specialists.

The news comes at the same time as economists forecast a loss of 27,000 jobs in London's Square Mile by the end of 2011.

According to the "five-year plan for human resources development in Shanghai's financial sector" released this week, China's second biggest city aims to take on 90,000 financial employees, 70 per cent of whom would have a BA degree degree and 15 per cent an MA degree.

This would mean that by 2015 Shanghai would have a total number of 320,000 employees working in finance, if things go to plan. As things stands, less than two per cent of Shanghai's total workforce work in finance, compared to 10 per cent in New York. An improved medical care system, social insurance, and children's education services have been built into the plan in a bid to lure expats who would have previously favoured Singapore or Hong Kong.

A British Expat, who has been running his own education company, in China since 2003 said: "If it has been decreed by the government it will probably get done.

"As China drives towards an economy fuelled by domestic consumption, then they will have the opportunity to put in place huge incentives to make things work for firms that are keeping the money onshore.

"Logistically, Hong Kong was the gateway to China but now China is open, it’s almost superfluous and only has the advantage of the legal system left over from the UK."

Shanghai's income tax rates appear to present the main stumbling block: they are as high as 45 per cent in certain cases. Compared to Hong's maximum of 15 per cent and Singapore's 20 per cent, it means exceedingly generous expat packages will be required to coax financiers across the waters.

Coupled with this is new legislation that will require expat workers and their employers to pay into China's social welfare pot, although it is yet to be made clear exactly how much of their salaries they'll be required to hand over.

When you are working or living abroad, or have plans of relocating into another country, it is very important that you protect you and your family’s health and their wellness.

Expatriates make sure you are covered for International Medical Insurance, April Medibroker assists & advises clients living or working abroad to both choose & place the right international Health and Medical insurance products, to suit their needs & budget.



April Medibroker is here to help you - from the initial advice on what expatriate health insurance policy to buy, through to any assistance that you may need in the future. Our staff are only a phone call or email away. Whether you need changes to cover or payment, need help with a claim or have questions about your international medical insurance policy we will gladly help.

Lack of clarity for expats in China around social insurance payments

New laws forcing expat workers and their employers to contribute into China’s social welfare scheme are causing confusion among those expected to pay.

On October 15, legislation came into effect making it compulsory for foreign workers and the companies that employ them to pay a portion of their salary to the Chinese government.

But the hundreds of thousands of individuals affected by the tax-grab still don’t know when payments are due to be made and how the new scheme will be implemented. Typically, when a new Chinese law becomes effective implementation rules are issued shortly afterwards explaining how the new law will work.

However, these rules are not likely to be issued until the end of November and employers are in the dark as to what they will be liable for. The level of contributions is expected to average 11 per cent for employees and 37 per cent for employers. The money will go towards benefits such as pension provision, medical insurance and unemployment benefit.

There are further complications, as the payments aren’t calculated on a unified national basis but vary from region to region. For example, Beijing-based employers will pay 33 per cent while Shanghai-based ones will pay 37 per cent.

There are also local differences on which authorities are removing a salary cap on how much employers will have to contribute for high-earning staff.

Confusion also arises from conflicting reports as to when the payments will be backdated to and how long employers have to make these first contributions. It has been suggested by a quasi-government agency in Beijing (FESCO) that payments will be backdated to July and should be collected by the end of the year.

When you are working or living abroad, or have plans of relocating into another country, it is very important that you protect you and your family’s health and their wellness.

Expatriates make sure you are covered for International Medical Insurance, April Medibroker assists & advises clients living or working abroad to both choose & place the right international Health and Medical insurance products, to suit their needs & budget.

April Medibroker is here to help you - from the initial advice on what expatriate health insurance policy to buy, through to any assistance that you may need in the future. Our staff are only a phone call or email away. Whether you need changes to cover or payment, need help with a claim or have questions about your international medical insurance policy we will gladly help.

Number of expatriates on the increase

More people head to China seeking out job opportunities as Western economies suffer hardship.  An increasing number of foreigners are being attracted by China's prosperous economy and have come to work in the country.

Figures released by the Ministry of Human Resources and Social Security showed that 231,700 foreigners were employed in China at the end of 2010, compared with 223,000 in 2009.

Foreigners are finding jobs in China on the back of its strong economy, which is performing vastly better than that of the United States or Europe, suggests a spokesperson for a leading Consulting firm in China.

"This year, China's average gross domestic product increase is about 8 to 10 percent. This has created more opportunities, especially within the financial services, pharmaceutics as well as the retail industry,".

"The country provides an abundance of bigger career platforms and opportunities. We have witnessed both international investment companies and local Chinese companies focusing on expansion plans within the past decade. Besides the strong need for international talent to grow their businesses in China, they also require top-tier candidates for their businesses in international markets."

The talent consultant added there was a rising trend for local Chinese companies capable and willing to offer international compensation packages and benefits that are targeted for expatriates working in China.

The spokesperson went on to point out that managing skilled people from other cultures posed a special challenge to companies because it is essential to be fair and culturally sensitive to both nationals and expatriates, especially given that talent management is the top priority for most chief executive officers today.

When you are working or living abroad, or have plans of relocating into another country, it is very important that you protect you and your family’s health and their wellness.

Expatriates make sure you are covered for International Medical Insurance, April Medibroker assists & advises clients living or working abroad to both choose & place the right international Health and Medical insurance products, to suit their needs & budget.

April Medibroker is here to help you - from the initial advice on what expatriate health insurance policy to buy, through to any assistance that you may need in the future. Our staff are only a phone call or email away. Whether you need changes to cover or payment, need help with a claim or have questions about your international medical insurance policy we will gladly help.