Zurich Insurance (Hong Kong) Medical Expenses Survey reveals over 1.7 million Hong Kong people exposed to healthcare protection gap

Core survey findings:

• Near 30% of respondents do not own any form of individual medical insurance, projecting to 1.7 million Hong Kong people are at risk of a healthcare protection gap, with some choosing to splurge on luxury goods instead
• Respondents value coverage and compensation over premium, but 40% of prior claimants were not fully compensated, with near 90% needed to pay 10% or more of the expenses out of pocket
• Among respondents who are confident in their knowledge of the “concept of deductible”, over 40% misunderstand the negative correlationship between deductible and premium, revealing Hong Kong people are still oblivious to many medical insurance concepts
• Over 70% of prior claimants had to wait 10 days or longer for claim result notification
• 30% of respondents are concerned whether VHIS will provide worldwide protection, highlighting Hong Kong people’s attention to overseas coverage 

Hong Kong, October 29, 2019 – The government’s Voluntary Health Insurance Scheme (hereafter “VHIS”) has received widespread attention since its launch in April. Zurich Insurance (Hong Kong) (hereafter “Zurich”) commissioned ESDLife to conduct a “Medical Expenses Survey” in July, and announces the findings today. The objectives of the online survey of 842 people aged 20 or above are to gain insights into their healthcare spending and views on medical insurance, to examine their attitudes and prior experiences, and to learn their understanding and perception of VHIS.

Zurich also announces the launch of its "VHIS Series". Certified by the Food and Health Bureau, it comprises of the “HealthSure” Standard Plan and the “HealthFlexi Plus” Flexi Plan, both committed to safeguarding the medical protection needs and services of Hong Kong people, while helping them manage medical inflation and alleviating pressure from the public health system. Furthermore, the “HealthFlexi Plus” Flexi Plan provides eight plan options, including different territorial scopes of cover (Asia/Worldwide excluding the United States) and four deductible options (HKD 0/ HKD 60,000/ HKD 90,000/ HKD 150,000), to enhance the insureds’ autonomy and meet customers’ true needs.

Money is to blame for Hong Kong people’s lack of inclusive medical protection

The survey found that 27% of respondents have not purchased any form of individual medical insurance. By using population estimates data released by the government (about 6.33 million¹ adults in Hong Kong are aged 20 or above), over 1.7 million Hong Kong people are coexisting with a healthcare protection gap, where 40% men and 33% women share they do not have disposable income to spare on medical insurance. In some cases, some respondents prefer to spend on other investments or entertainment, for instance 13% men on car or house while 13% women on travel and shopping.

Fiona Kwok, Chief Marketing Officer of Zurich Insurance (Hong Kong), said, “The survey findings reflect that the public still understimates the importance of medical insurance. As local medical costs continue to soar, relying solely on group insurance and savings may be insufficient to pay for even basic medical needs, not to mention the tremendous costs if a critical illness strikes. This must not be a back burner topic in midst of rising rates of young people with illnesses in the city with the longest life expectancy. The survey further revealed those that are interested in purchasing VHIS, "full coverage of medical expenses", "variety of deductible options", "quick claim result notification", and "worldwide protection" are considered the most important. Zurich answers these market needs with its new VHIS Series by providing a wide range of plan options, so that our customers can easily manage their wellbeing."

Reality falls short of expectation in medical expenses compensation

The survey found that 35% of respondents that were also prior claimants were not fully compensated, and 90% of them had to pay more than 10% of the medical expenses out of pocket, with main reason being the claim “exceeded the maximum limit of individual benefit” (57%). And in 71% of respondents who are interested in purchasing VHIS, “full coverage of medical expenses” captures their attention the most.

Eric Hui, Chief Executive Officer of Zurich Insurance (Hong Kong), said, “Most respondents yearn for a worry-free protection, but do not always make the most suitable choice at purchase. This will eventually lead their budget astray when confronted with hefty medical bills. Zurich’s “HealthFlexi Plus” Flexi Plan’s annual benefit limit of HKD 6 million, without maximum limit on most individual benefits, plus 100% coverage of medical, hospitalization, and operation costs, are integral in our commitment to relieving our customers’ medical expenses burden.”

Wasted money due to confusion over deductible

The market has a myriad of medical insurance plans with deductible options, but the survey revealed the public’s understanding is low, with 45% of respondents not clear on what the concept of deductible is. And for those that shared they understood, 41% were confused over the “higher the deductible, lower the premium” correlation. This reflects that the public still lacks comprehension of medical insurance and the concept of deductibles, and is oblivious to how deductibles help lower premiums, which is especially useful for those who are already covered by group medical insurance.

For a healthy 30-year-old female who is already sufficiently protected by her group medical insurance, if she selects the HKD 150,000 deductible and Asia coverage options under Zurich’s “HealthFlexi Plus” Flexi Plan, her monthly premium is only HKD 203. And for a 22-year-old job market rookie male, if he selects the HKD 60,000 deductible and Asia coverage options, his monthly premium is only HKD 260. If he deems he can manage a higher deductible and chooses the HKD 150,000 option instead, the monthly premium will be reduced to HKD 131, equivalent to less than HKD 5 a day!

Eric, explained, “Although deductible requires the insured to bear partial responsibility of the medical expenditure, the upside is the premium is generally lower. Consumers can use their individual plan with deductible and their group medical plan to complement each other, by switching over to their individual plan only when the medical costs exceed their group plan’s benefit limit. By selecting the deductible option that best matches the limit of their group plan, our customers will maximize their savings on premium. Additionally, the “HealthFlexi Plus” Flexi Plan allows our customers to reduce their deductible at a specified age (60/65/75) without re-underwriting – to budget more effectively for their finances in retirement.”

A 10-day or more waiting period for 71% of respondents

In the survey, 49% of respondents with individual plans were prior claimants, and of those, 71% revealed it took 10 or more days to receive their claim result notification, with an average duration of 17.6 days.

Eric, said, “Zurich values customer experience, and is committed to providing customers a swift and seamless insurance journey. Our Zurich VHIS Series has elevated the claims service process and promises a ‘1-day claim pre-assessment and 5-day claim result notification’ schedule, shortening the waiting period and allowing for better budgeting at critical moments for our customers.”

Global talent mobility calls for flexible worldwide coverage

Finally, according to the survey data, 30% of respondents will find a VHIS plan more desirable if it offers comprehensive international coverage. As the globalization of talent mobility continues to grow, a medical insurance plan’s geographical coverage becomes particularly important for an insured’s peace of mind when seeking treatments abroad.

Eric, added, “Medical insurance is a significant lifetime investment, so flexibility, including job mobility and relocation, should be an integral part of the purchase decision. From Asia to Worldwide (excluding the United States) coverage, ‘HealthFlexi Plus’ Flexi Plan provides different territorial scopes of cover – ensuring protection for customers no matter where they are.”

Eric, continued, “The government and the industry’s extensive promotion of VHIS has caught the attention of consumers and resulted in a more robust market. Zurich is fully confident in its VHIS Series and medical insurance products, and the competitiveness of its coverage and services, and eyes double-digit growth in new customers and migration of exisiting customers to the new VHIS Series. To cater for the varying needs of different customers, Zurich is preparing to roll out more VHIS-certified plans, medical insurance products, and innovative services. We are here to ensure our customers have a say in their protection and in their journey with us – by providing real solutions that address their medical needs.”

Enjoy up to 15% premium discount on the Zurich VHIS Series within the promotion period

From today until January 31, 2020 (based on the insurance policy issue date), customers that purchase an insurance plan under the Zurich VHIS Series online or via the sales hotline are entitled to up to 15% first-year premium discount! Enjoy additional rewards upon enrolling in the “HealthFlexi Plus” Flexi Plan over a specific amount, including free outpatient medical insurance for three months and two theme park tickets and hotel accommodation! (Terms and conditions apply)

For information about the Zurich VHIS Series insurance plans and promotion details, please visit our product webpage.

For enquiries, please call 2903-9391 or email enquiry@hk.zurich.com

¹ Census and Statistics Department’s Demographic Statistics Section 2018 “Population by Age Group and Sex”:

https://www.censtatd.gov.hk/hkstat/sub/sp150.jsp?tableID=002&ID=0&productType=8