Boston Consulting Group urges health insurers to do better

There are six critical questions insurers must ask themselves to stay aligned.

The Asian health insurance landscape presents promising opportunities for the creation of a successful health insurance model, said the Boston Consulting Group.

In its report titled “Capturing the Health Insurance Opportunity in Asia”, health insurance has become a significant business line for life insurers in Asia, representing 25-35% of total premium volume and experiencing rapid growth.

Health insurance in Asia mainly consists of two product categories: critical illness plans and medical indemnity plans. Critical illness plans dominate due to affordability and simplicity, focusing on diseases like cancer and heart conditions.

Critical illness plans have become somewhat commoditized, leading to price competition and margin pressure. Medical indemnity products are growing but lag behind international standards in terms of technical capabilities and policyholder care involvement.

Insurers often measure health insurance performance using life insurance metrics, which can lead to a limited understanding of profit drivers. This is further complicated when medical indemnity products are bundled with life and savings plans.

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Some insurers have tried to differentiate themselves by promoting health and wellness programs. While these initiatives have had varying success, they demonstrate a willingness among policyholders to engage with insurers beyond financial protection.

Digital tools offer opportunities to improve access to care, deliver interventions at scale, and collect valuable data for personalized product offerings.

There are still underserved segments, such as those with chronic diseases or adverse medical histories, offering insurers opportunities for innovation and disruption.

The consulting group also emphasised Asia’s growing need for health care and insurance. Often times these services are financially out of reach, leading them to demand for better quality care beyond the government.

To succeed in the Asian health insurance market, insurers should consider strategies such as vertically integrated payer-provider models, health care services, digital engagement, and clinical capabilities. 

Six critical questions that insurers must address include delivering propositions to underserved segments, aligning product economics with health outcomes, addressing top-of-mind concerns, and offering holistic propositions with clinical services for better health outcomes.