Growing numbers of expats are also moving into China to look after the expats already there, such as teachers and administrators of English and other foreign-language schools.
Providing health insurance for expatriate employees working for multi-national corporations located in Shanghai and elsewhere in mainland China, however, has long been more challenging – and expensive – than in most other major countries, for reasons that include the still-communist country’s lack of a private healthcare network comparable to what expat Brits and Americans are accustomed to back home.
Indeed, top quality private care at the best Chinese hospitals can be as expensive as it is in the US, the world’s most expensive healthcare market, insurance experts say.
“A room in a top Chinese hospital can vary anywhere from $600 to $1,000 a night, and that’s before the doctor has even poked his head round the door,” said James Cooper, sales manager at expatriate insurer William Russell, which, for now, is looking after expat clients from its UK base, as it mulls its options in the mainland.
Within the past year, though, a number of private health insurance giants like Aetna and Bupa, along with numerous smaller firms, have begun establishing a mainland presence to target the Chinese market, which is understood to include an estimated 600,000 expatriates.
Normally they do this via an alliance with an established Chinese insurer, which gives them an immediate regulatory presence as well as local knowledge and contacts.
Bupa International , for example, earlier this year signed a deal with Chinese insurer Alltrust, whereby Alltrust is offering a range of health insurance products for expatriates working in China as well as Chinese citizens, with Bupa handling the administration.
Last October, French insurance giant Axa announced an alliance with China Minmetals Corp, known as Axa-Minmetals Assurance Co, which is based in Shanghai.
Last month, Now Health International, an 11-month-old Hong Kong-based insurance provider which has its underwriting handled by regional operations of Axa, said it had formed a partnership with Minan Property and Casualty Insurance Co, a Shenzhen-based Chinese insurer, to provide “high-end international medical insurance” to Chinese HNWIs and expatriates.
Major insurers look to China
“What we’ve seen over the past year or so is a greater number of major international insurers starting to look seriously at China,” said Michael Lam, online marketing manager for Hong Kong-based Pacific Prime Insurance Brokers, which operates in China as China Health.
“Hospitals like Shanghai’s Parkway Health, which is the type of facility that most expatriates would prefer, offer very good services, but charge extremely high fees, so it would be very hard to [pay] out of pocket.”
The trend is not seen as being slowed by China’s decision to begin taxing expatriates in order to pay for the country’s growing social services infrastructure, which includes basic healthcare. As reported by International Adviser last month, companies will be expected to pay into the system up to 11% of an individual expat’s salary, capping at a maximum monthly salary of RMB11,688 ($1,837) a month.
Steven Conway, regional general manager for Axa-Minmetals, which also looks after clients of InterGlobal, the UK-based expat insurance specialist, says the Chinese private health insurance market “has to be the most exciting in the world at the moment”, but notes that insurers face some daunting challenges.
Among them, “Chinese medical institutions have limited experience of dealing with international insurance products and are unwilling to provide credit facilities as they already have all the patients they need from the local community, who pay cash,” he noted.
“Chinese consumers are unused to private medical insurance, and require significant education.
“[Finally], Chinese facilities are not orientated to provide treatment for foreigners, making the patient experience unnerving at best.”
This is a pity, he notes, since the best medical treatment in China is often found in the Chinese facilities rather than the “Western-style outfits” that often charge very high fees.
