Healthcare spending in the Asia Pacific (APAC) region is set to accelerate significantly, surpassing 20% of the global total by 2030, according to recent projections. This surge is driven by increasing investments in health across Asian countries, inevitably leading to higher costs. In response, insurers like FWD Group are adapting their strategies to meet the evolving demands of this dynamic market.
FWD Group’s initiative, FWD HealthyMe, marks a pivotal move aimed at reshaping the accident and health insurance landscape in Asia. Dr. Sarah Salvilla, Group Chief Health Officer at FWD Group, emphasized the initiative’s commitment to addressing pressing challenges such as healthcare workforce shortages, aging populations, and escalating medical inflation. With a strong presence in ten Asian markets and serving over 13 million customers, FWD Group is leveraging its experience in life insurance to innovate within the health insurance sector.
A survey conducted by Willis Towers Watson (WTW) indicates that healthcare benefit costs in APAC are expected to maintain stability around 9.9% in 2024, akin to figures observed in 2023. However, nearly 59% of insurers in the region foresee further cost increases over the next three years. Despite a global moderation in inflation, healthcare costs in APAC remain notably elevated across various markets including the Philippines, Malaysia, India, Indonesia, South Korea, Singapore, and Vietnam.
Eva Liu, Head of Strategic Development, Health and Benefits in Asia Pacific at WTW, highlighted key drivers behind the persistent high medical costs in the region. These include the overuse of healthcare services, attributed to excessive prescriptions and procedures by medical professionals, as well as poor health habits among insured individuals.
Cardiovascular diseases and cancer are identified as the fastest-growing medical conditions in APAC, both in terms of incidence and associated costs. Meanwhile, mental and behavioural health disorders, despite being globally recognized as fast-growing conditions, often face coverage exclusions in APAC markets due to prevalent sociocultural stigmas.
Audrey Tan, Head of Health & Benefits in Singapore at WTW, noted that these exclusions can impact employee well-being and hinder Diversity, Equity & Inclusion (DEI) efforts within organizations. Tan urged insurers and employers in the region to enhance their healthcare benefit programs by incorporating wellbeing services and adopting DEI features.
Looking ahead, Tan emphasized the importance for employers to strategize on making healthcare benefits more cost-effective amid projections of continued cost increases. This involves conducting thorough reviews of coverage appropriateness, formulating robust wellbeing strategies, and ensuring equitable access to wellbeing benefits across their workforce.
As APAC grapples with escalating healthcare costs and evolving health challenges, insurers and employers face the imperative of adapting swiftly to safeguard both financial sustainability and employee health.
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