Gen Re Asia Dread Disease Survey Sheds Light on Regional Insurance Trends
July 07, 2015| Von Janice Lu
Region: Asia Pacific
Critical Illness (CI) insurance is now one of the most popular risk protection products in Asia, and it has long been an important component of Gen Re’s life business in the region.
One reason we’ve been able to contribute to the sustained growth of CI insurance in Asia is that we monitor business trends related to dread disease product design, pricing, incidence rates and claims among providers closely.
Gen Re’s Life/Health team in Asia has been publishing a comprehensive CI study called “Dread Disease Survey” since 1990. The latest issue is based on data from 2008 to 2012 from 82 companies in China, Hong Kong, Malaysia, Singapore, South Korea, Indonesia and Australia.
The chart below shows the estimated market coverage of the companies surveyed.
While the whole report will be released during the summer, the initial results reveal some interesting findings:
- CI products continue to sell well in Asia, especially in China and Hong. Kong. More than 10 million new CI policies were sold in China in 2012, and nearly 300,000 new CI policies were sold by the surveyed companies in Hong Kong - at least 10% of them were sold to Mainland Chinese. Cancer is the leading cause of claim. It accounts for about 60% of all admitted claims in men and 80% in women.
- A reduction of about 10% of claims was reported in all surveyed markets except for Indonesia, where the decline is as high as 26%. Over the five-year study period (2008-2012) the claim experience for death with acceleration CI has been deteriorating in China, at 0.5% a year for men and 2.0% for women. Splitting the claims into death and acceleration CI, we found that mortality experience is improving while experience for CI only is deteriorating at a higher rate of 3.3% a year for men and 4% for women.
- Incidence rates for thyroid cancer increased dramatically in China, by about 20% a year from 2004 to 2012. It accounts for 11% of all cancer claims. Increase in thyroid cancer incidence was observed in all surveyed markets but at different rates. Hong Kong and Singapore show more volatile trends and much lower increase rates.
- Anti-selection is observed in China but not in other surveyed markets. In most surveyed markets, death with acceleration CI claim experience is about 20% better in the first policy year than in the third policy year and after. In China, it is about 20% worse in the first policy year.
- Claim experience varies significantly among companies in the same country. That means one set of pricing rates will not be appropriate for all companies in a market.
All the companies that submitted data to the study will receive the full report when it is released. Other Gen Re clients can obtain an executive summary.
Anyone who wants to know more about Gen Re research and what we have to offer in the Dread Disease and CI segment can get in touch.