The Gen Re Dread Disease Survey – Key Takeaways for the Hong Kong Market
Our 8th survey of Dread Disease insurance in Asia covers the experience in China, Hong Kong, Malaysia and Singapore from 2015 to 2019. While we had originally planned to complete our data collection for the new report by Q3 of 2020, COVID‑19 hit hard during this period. We thank all of the participating companies across the region for continuing to contribute their data, despite the challenges presented by the pandemic and are pleased to share some highlights from Hong Kong.
- Growth in Dread Disease New Business
For the Hong Kong market, nine companies participated in the survey, which we estimate covers around 95% of the market. During the survey period, Dread Disease products gained importance, indicated by tremendous growth of new business, and the market reaching critical mass with 4.3 million in‑force policies by the end of our study period.
- Decreasing Age at Issue
We continue to observe the trend of a younger generation realizing the importance of having Dread Disease protection and young families buying crucial protection for their babies; in this survey, we see the average age at issue dropping to 28 years old.
- Gender Resonance
Another trend we see is that Dread Disease protection continues to resonate more with female customers who took up 55% of all new policies issued during this study period.
- Increases in Treatment Costs
With medical advancement, treatment costs for top dread diseases – such as cancer and heart attack – have been on the rise, and so customers have opted for richer policies. The average sum assured has risen quite steeply during this study period, increasing from HKD 610,000 in 2015 to HKD 890,000 in 2019, representing a 46% (or a 10% per annum) increase, which is much higher than general inflation.
However, with such rising costs, do bear in mind the limits of coverage; for example, if the policyholder is unfortunately diagnosed with cancer and must undergo target therapy treatment, HKD 890,000 will most likely be insufficient to cover all the medical costs.
- Implications for Claims Coverage
As can be expected, a lot of claims made during this study period were based on policies bought some years ago; the average claim amount is therefore quite a bit lower than the current new policy average sum assured. For death claims, the average claim amount was HKD 310,000 with an average age of 51. For claims stemming from major and minor conditions, the average claim amount and average age at claim were HKD 380,000 and HKD 110,000 at age 48 and 45 respectively. It is therefore essential to review one’s coverage periodically so that protection remains sufficient.
- Causes of Claims for Major Conditions
Dread Disease products in Asia aim to provide comprehensive coverage; one can easily find more than 60 different major conditions covered in a product. Claims, however, are not evenly spread, with only around 5% of conditions producing a significant number of claims. In fact, most claims come from three conditions – namely, cancer, heart conditions and stroke. For males, the top three conditions amount to 86% of claims, with cancer being number one at 60% and heart conditions as a dominant second at 18%. For females, the cause of claims is even more skewed towards cancer, with 87% of claims and the top three amounting to 93% of all claims.
- Prevalence of Different Cancer Types
Given that cancer remains the top cause of claim within the insured portfolio we surveyed, it’s an area we explore in greater detail in our full survey results. Interestingly, the top cancers cited in the insured portfolio are not an exact match with the general population. For example, according to recently released 2019 population statistics, lung cancer was the number one cancer in Hong Kong. But, within the insured portfolio surveyed, colorectal cancer remained number one for males. We also see proportionately more nasopharyngeal carcinoma and thyroid cancer in our insured portfolio, standing at third place for males and females respectively.
We will be delivering full results of the latest Gen Re Dread Disease Survey to participating companies next year and look forward to sharing more highlights from the individual markets over the coming months. If you have any questions about the research or would like to find out more about how to participate in future, please don’t hesitate to reach out.