Welcome to healthcare matters, the Watson Wyatt publication that focuses on the health-related aspects of insurance and financial services, both products and service provision.
This edition of healthcare matters has five articles. The first considers smoking trends and heterogeneity in the smoker population. The second article highlights the impact of the recent flu pandemic on sickness absence insurance in the Netherlands. Returning to the UK, we next take a look at the proposed revisions to the ABI Critical Illness Statement of Best Practice related to Total Permanent Disability. The fourth article reviews the recent trends in some of the UK’s group insurances market. Finally, we consider the recent developments around Solvency II and the treatment of healthcare business.
We hope you find this edition of healthcare matters useful to you and your organisation. We welcome your comments and suggestions for future areas of coverage.
Vaccinations for non-infectious diseases
The use of vaccination in medical practice has a long and rich history, with Edward Jenner introducing the term in 1796 to describe the systematic use of cowpox (Latin – vacca) to inoculate individuals against highly virulent small pox. Since then vaccines have been developed for a whole succession of infectious diseases based on the concept of an initial controlled exposure to inactivated infective agents or component fragments, which produce an immune response that would protect the individual against future exposure.
The UK individual long-term protection markets
The individual long-term protection markets (term assurances, whole of life assurances, critical illness and income protection) have traditionally been a valuable supply of new business for UK insurers, but will the economic downturn undermine this position? In this article, the recent trends and key strategic initiatives that may be required in the short to medium-term are considered.
The Spanish health insurance market
According to the latest OECD data, Spanish expenditure on healthcare was 8.4 per cent of GDP (around €80,000 million) in 2006, which compared with the EU-15 average of 9.6 per cent of GDP. Of the total health expenditure in Spain, around 70 per cent was funded from public sources, with the remainder being drawn from the private sector through direct tax contributions, private health insurances and from private non-profit organisations.
UK payment protection insurance – where now?
The UK’s Competition Commission (CC) published its final conclusions and remedies for the payment protection insurance (PPI) market in January 2009. The effect of its actions is anticipated to make the sale of PPI more difficult and costly for insurers, with the result that fewer consumers will be covered. So who, if anyone, benefits?
In India, health products have experienced almost a four-fold increase in premium volume over the four years ending March 2008, with signs of continued strong growth in the last reported Insurance Regulatory and Development Authority (IRDA) data of December 2008.
Costly revolutions in cancer treatment
Herceptin and Avastin are the forerunners of a potential avalanche of monoclonal antibodies (MABs) that have the potential to precipitate dramatic reductions in relative cancer survival rates, as well as improve the management of other diseases such as asthma and rheumatoid arthritis.
Guarantees modelling for income protection
For many years income protection (IP) has been known as the ‘Cinderella’ product that never made it to the ball. It has also been referred to as the poor relation of the much more popular critical illness (CI) product. It reached its peak in individual new business sales in 2002 at just over 245,000 policies; since then however, sales have been declining at about 10 per cent per annum.
Ireland: risk equalisation - what happens next?
In July 2008, Ireland’s Supreme Court struck down the country’s risk equalisation scheme, under which health insurers with a younger age profile were required to make annual payments to competitors with a larger proportion of lives in the older age segments. The aim of the risk equalisation payments was to equitably neutralise the differences in insurers’ costs that arise due to variations in the age profile of the insurers.
Intelligent mortality postcoding
The use of postcodes in mortality investigations has become increasingly common in the UK pensions sector, both for individual annuity pricing and in pricing bulk transactions. This article explores some of the pros and cons of the use of postcode in mortality analyses, and considers how postcode can most effectively be used.
As a result of population ageing in combination with high medical inflation, the cost of healthcare in the Netherlands is expected to increase sharply in the coming years. In 2005, the average cost of healthcare per capita in the Netherlands amounted to €4,200. This is expected to increase to €12,000 per capita in 2030 and €24,000 per capita in 2050. The key question is; to what extent the Dutch economy will be able to bear these costs in the future?
Cancer Reform Strategy in the UK – providing a world class cancer service?
League tables are everywhere these days, but few lead to as much collective despondency in the UK as cancer comparisons with the rest of Europe and the US.
The medical insurance market in Hong Kong
Medical insurance is currently the fastest growing line of general insurance business in Hong Kong.
The UK individual long-term protection markets
The individual long-term protection markets, that is, for life cover, critical illness and income protection, represent a significant source of new business for product providers in the UK with in excess of 1.9 million policies written every year since 2002, according to the Association of British Insurers (ABI).
Solvency II and the potential impact on healthcare products
The existing solvency regime has been in place since the First EU Directive in the 1970s.
The impact of recent legislation on long-term disability claims in the Netherlands
Less than a decade ago, the Netherlands was known (internationally) as the country with the highest number of long-term disabled people in proportion to the working population.
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