Bupa International Growth in China Leads to Drop in Premiums for Pacific Prime SME Clients

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Pacific Prime clients on SME plans will be able to benefit from 30% premium reductions as Bupa International continues expansion into Asia, with a focus on the China market.

Pacific Prime

Pacific Prime

Bupa are hoping to gain market share over their competitors by reducing the premiums of their SME plans based in China by 30%.

Pacific Prime’s SME clients can look forward to lower premium rates as Bupa International have announced further discounts on standard premiums for their Company plans in China.

Bupa Intl are focussing on increasing their already growing market share in Asia and believe that reducing the premiums of their SME plans in China by 30% across the board will help to show their commitment to the region.

Both Pacific Prime and Bupa International anticipate a very positive response from this new offer as clients will now be able to receive some of the highest level of coverage available, with a market competitive premium.

Bupa’s individual plans have already performed well in Asia but this move to reduce SME premiums is an attempt to gather more Chinese companies as clients. The insurer is highly confident that this premium reduction will help continue to build their SME portfolio that has been so successful for them in other parts of the world.

Currently, Bupa offers three basic plan options on their company insurance plans; Essential, Classic and Gold plans. Whilst these plans are exceptionally comprehensive in their coverage, Pacific Prime believes that they could be even more successful if they had the ability to tailor benefits.

Chinese businesses looking for insurance plans for SME groups tend to favour customisable plans which have the ability to e.g. limit a plan to a specific region of China or to a group of hospitals. Pacific Prime analysts are of the opinion that plans which are more catered specifically to China and Chinese clients have been more successful in the region.

A number of Chinese companies are requesting that the geographical coverage of Bupa’s policies be reduced to just China (as opposed to international coverage).This will reduce the cost of premiums for SME companies, however Pacific Prime do not believe this strategy to be beneficial overall.

Firstly, as China has some of the most expensive healthcare and hospitals in the world, the premiums for coverage in China alone are already high, and so the total cost is not that significantly reduced. Secondly, the large percentage of expats in the workforce in China often want to receive healthcare in their home countries due to the comfort of familiar language and culture, which would not be possible under these China only SME policies.

As an alternative, Bupa could tailor plans to restrict or prohibit cover at facilities that have higher than average costs of treatment (High Cost Providers - HCP). If policyholders want to receive treatment at these HCPs then they can do so under a co-payment policy whereby they pay 20% of the treatment costs.

For Bupa to maximise their growth in China, they must remain competitive with other insurers in the SME market. To do this, Bupa have already taken a significant step in reducing premium costs, and must also offer more flexible options for their clients’ plans in China for future success.

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Sergio Ulloa
Kwiksure
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