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SINGAPORE : Health insurance in Asia has much potential to grow, especially in emerging markets in the region.
Analysts said that is because these countries are likely to see a growth in demand for insurance, as the population gains affluence and healthcare spending patterns change.
And industry professionals said it's also likely that governments could consider encouraging private sector health coverage, as an alternative to developing universal coverage.
The Asia Pacific region spends about US$270 billion on healthcare every year.
According to Frost and Sullivan, governments may eventually consider private health-care insurance as a way to support demand for these services.
Purna Dhara, senior consultant of Healthcare at Frost and Sullivan said: "They (governments) are focusing on how to make healthcare more affordable. That could be by providing universal health insurance - Indonesia has tried it; Thailand is trying; China has thought about it; India is still at a nascent stage.
"But they also do realise that managing universal coverage for such a large population is a mammoth task, which is why they are looking at having another party come into the place to provide for the reimbursement via the insurance structure."
And this would translate into growing demand for insurance products.
Currently, penetration levels are low in emerging markets, mainly due to barriers such as government regulations and a lack of awareness.
For example, only 4 per cent of Indonesia has health insurance.
"On a broad level, MNCs are probably not as aware of the markets as they would like to be. There's also the regulatory barrier. In some countries you need a local partner to enter the country," said Purna.
And countries like Singapore and Malaysia are attractive markets to the insurance industry as barriers to entry are low, and consumer awareness as well as demand are strong.
"Singapore is a mature market, and several organisations have a foothold here. This is really where the beacon of healthcare in Asia is. If you look at India or China on the other hand, most of these countries are blinded out to MNC and international players," said Purna.
Apart from traditional insurance, analysts suggest that other options could be explored, including Islamic insurance.
Under Islamic insurance, policy holders would typically pay a higher premium, but insurance companies will return surplus funds to customers. - CNA /ls
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