What’s driving international insurance costs in Thailand?

Having previously discussed the outline of the recently released Cost of International Health Insurance – 2017 report (read it here), Pacific Prime Thailand thought it might be useful to discuss what exactly might be driving international insurance costs in both Thailand and abroad. The report identifies four global drivers that it believes is impacting premiums around the world, while another Pacific Prime report, the International Private Medical Insurance Inflation – 2017 study provides some more local context.

If you’d like to read more of either report, check out the download links at the end of this article.

International insurance costs in Thailand

According to the Cost of International Health Insurance – 2017 report, the average cost of health insurance in Thailand is USD 8,724. As the report itself takes it figures from a number of different plans targeting particular demographics, the following numbers indicate what certain types of consumers might pay for international insurance:

• Individual plans: USD 4,366
• Couples: USD 8,449
• Family plans: USD 12,486
• Retirees: USD 9,597

Comparing international insurance costs in Thailand with those of its regional neighbours, the report finds that the country is consistently in the top 5 most expensive locations in all demographics. Overall, the Top 5 Most Expensive Locations for International Medical Insurance in Asia are:

1. Hong Kong
2. Singapore
3. China
4. Vietnam
5. Thailand

There are both international and local factors underpinning Thailand’s premium costs. Understanding what’s driving these prices can be a huge help when it comes to making the right decision for your healthcare and insurance needs.

Global factors influencing insurance premiums

Using reports from companies like Deloitte, EY and the World Bank’s International Finance Corporation, Pacific Prime has identified a number of drivers that it believes is shaping the costs of international insurance everywhere. While there are no doubt varied levels of how these might affect specific countries, as well as locally derived factors that also influence international insurance costs, these four global drivers are things impacting the price of insurance in Thailand:

Increased demand for quality private healthcare

Demand has always been a strong driver of prices around the world, however the interesting development highlighted in this year’s Cost of International Health Insurance – 2017 report is that it’s beginning to influence emerging insurance markets too. The reason for increased demand is generally due to two things; an increased lifespan and an increasingly wealthier population.

People who live longer are more likely to suffer age-related illnesses and, therefore, need better access and quality medical treatment as they get older. People who have the means to pay for top-of-the-line insurance will do so; securing your health is important to many people the longer they live. Deloitte expects that the expansion in private wealth to a growing 540 million high-income households worldwide should see a driving up of private spending on healthcare.

Increased cost of healthcare

The simple logic with this driver is that the more an insurer pays for a medical treatment, the higher premiums are likely to be. Virtually all of the Top 20 Most Expensive Locations for International Medical Insurance saw their premiums increase from 2016 to 2017. Deloitte again expects that major regions will see healthcare spending increases from 2.4% to 7.5% between 2015 and 2020.

Increased regulation

Our insurance industry is also one that is becoming more and more regulated; either through self-regulation or via government authorities. Some regulations, such as the Dubai shift to make health insurance mandatory for every person in the Emirate, can have an upward driving effect on international insurance costs. According to EY, regulators around the world are developing more complex rules to protect consumers and reduce market risks.

Continuing challenges related to fraud

The serious and continuing problem of fraud also adds to the cost consumers can expect to pay when it comes to insurance. Every fraudulent dollar spent by insurers contributes to an increase in medical costs and insurance premiums. In 2016, the US Justice Department reported charging over 300 medical professionals with fraud, totalling USD 900 million in fraudulent money being received.

These losses can be recovered by insurers, but sometimes it is done so at a significant cost. The more consumers and medical staff game the system, however, the more likely people will see an increase in their premiums in the future.

Local factors influencing insurance premiums

In Thailand specifically, there are a number of drivers that influence international insurance costs at a local level. While the Cost of International Health Insurance – 2017 report provides great cost comparison data, the International Private Medical Inflation – 2017 report outlines some key factors facing insurance consumers in Thailand:

Insurers grouping Thailand with other “low cost” Asian markets

According to the report, the rate of insurance premium inflation between years has been slowing. The truth is, though, that premiums are still rising – they’re just not rising as quickly as many other places. Pacific Prime believes that one of the reasons for this is because insurers have been consolidating markets of similar types and applying a blanket premium increase across them all. This includes having identical inflation figures to countries like the Philippines.

Cost complaints and government regulations

In line with the international driver, local Thai regulations have been driven by consumer cost complaints and government moves to make pharmaceutical pricing more transparent. The result is that Thailand, even with a healthcare system less expensive than in countries like Japan and Hong Kong, has seen added upward pressure put on the cost of the health services it provides. Premiums have therefore been adjusted to match this.

ASEAN AEC developments

Economic challenges are also an impact on the cost of health insurance in a country. Thailand, in particular, has had to face tougher competition in many of its key industries from neighbouring countries Cambodia, Laos, and Vietnam. A weakening economy can see governments struggle to deliver on regulatory developments and healthcare infrastructure projects, meaning that demand can often outpace the supply of healthcare resources. This, in turn, makes international insurance costs more expensive.

Getting the right insurance solutions for Thailand

When it comes to purchasing the right insurance for you and your situation, the best thing you can do is engage the services of an experienced insurance broker. Pacific Prime Thailand believes that you can get a better deal, a comprehensive plan, and a clearer understanding of your insurance policy simply by using a broker who puts your needs first above anyone else’s. In Thailand, you have a range of insurance sources to choose from. The best are those with an in-depth understanding of the industry and market.

Download the reports today!

If you would like to read your own, free copy of the reports discussed in this article, follow the links here:

• Cost of International Health Insurance – 2017
• International Private Medical Inflation – 2017

Downloading them is free and a great way to ensure you’re well prepared before you commit to an international insurance plan.

Do you have any more questions? If so, get in touch with our team of experts today.