Pacific Prime is one of Asia’s top brokers of international health insurance products, especially for expatriates. Founded by Neil Raymond in 2000 and based in Hong Kong, they have a particularly good view into the current changes in health (and other) insurance in China and Asia. And as I am someone who has been working in healthcare and health insurance for +20 years, I send Neil questions from time to time, which he is kind enough to answer. Below are his answers to some of my recent questions.
Full-disclosure: I am a Pacific Prime customer, which has been a very good experience and something I definitely recommend. However, the company is not a client of mine and I have no financial interests here.
Jeff: What do you see coming in healthcare in China in the next 2-3 years? Any major changes in supply (hospitals, insurance products, etc)? Or are things more active on the demand side, especially as Chinese consumers grow in wealth and expectatihons?
Neil: I expect increases in both supply and demand but I think demand will continue to grow more strongly. Most Chinese still do not understand the concept of health insurance (even if they can afford it). But in China, I expect awareness and demand by consumers to increase faster than supply can be built.
This demand-supply imbalance will be further amplified by other demand changes in the global health care industry, such as better drugs, better diagnostics, better everything. And the Chinese consumers are going to want these improvements too.
Jeff: Do you see any recent changes in quality and standards of healthcare services in China?
Neil: No, not especially, but as the industry ‘grows up’ I do expect to see more transparency on the service and supply side, which should lead to more quality.
Jeff: What is happening with private health insurance in China right now? Any significant changes in the next 2-3 years?
Neil: I think a lot of people are moving into this space. There will be growing pains as companies build facilities and then try to fill them. Some will win and some will not.
The recent slowdown in the economy has given more power to the insurers (relatively) over the providers (clinics and hospitals). That is a change from 10 years ago.
Jeff: To what extent is healthcare and health insurance becoming international? Is this still a small minority of customers like me? Is the business still overwhelmingly domestic?
Neil: It is mostly domestic but at the high end it is becoming more and more global. For example, doctors are flying in to China to do operations and vice versa.
Jeff: There is a lot of discussion about the“digital transformation” of healthcare and insurance companies. Do you see this? What do you see actually happening in terms of digital capabilties?
Neil: Digital capabilities are improving but are still not fully executed. There is a lot of potential to do better but this actually requires co-ordination among many different parties (insurers, hospitals, government etc). Right now in many countries, digital capabilties are still pretty basic and China is no exception. Some insurers are building good technology but it is only one part of the whole healthcare provision ‘system’ and to get the best out of this everyone needs to be more integrated. Insurers and hospitals are still highly fragmented and they generally do not like to cooperate with each other too much.
Jeff: Is digitization impacting your own business?
Neil: Yes, but we have always been very digital since we started. This has enabled us to be very efficient and very organised. It also enables us to provide very high levels of customer service, which is a particular strength of ours.
Jeff: Pacific Prime has expanded its operation recently (offices in Beijing and Dubai). How has the company been changing recently?
Neil: The approach is to continue development of the same business model. We hope to open in the UK and Thailand this year. We have plans for quite a few more countries over the next few years. Essentially, the business model is mixing traditional brokerage with new technologies that improve service and advice to clients.
There are significant challenges for the future in terms of compliance as most regulators around the world continue to push this. And we agree that this is a good thing. There are also challenges in terms of growing at the appropriate pace to ensure service and implementation are of the highest standards.
Jeff: You originally started the company with a focus on general insurance (motor, home, and medical) for expatriates in Hong Kong. How did this happen? What was your background prior?
Neil: I started the company in 2000 in Hong Kong. Note we are actually the largest distributor of motor insurance in Hong Kong today. My background was in Chartered Engineering with Shell (i.e., oil and gas). Then I went to INSEAD business school in France which got me involved in insurance. From there, I moved to the UK and eventually to Hong Kong.
Jeff: What are the 2-3 biggest things that are coming for health insurance in Asia? Per the title of this piece, what’s next?
Neil: I think the biggest challenge for Asia in the future is the growth in demand for high quality healthcare. Demand will be driven by the growing and aging population, increasing wealth and the advances in medical technology, such as in drugs and diagnostic testing. The ‘supply’ of the infrastructure by the private and public sector as well as by insurance companies and other service providers will create many challenges but one of biggest will be the increasing cost of healthcare to individuals, companies and governments.
I write (and speak) about how rising Chinese consumers are disrupting global markets. (#ConsumerChina). This also includes work on:
“China 2025″ – what a region transformed by Chinese consumers, companies and capital is going to look like. (#China2025)
Photo by Jeff