Closing the gap

Reinsurer Swiss Re aims to see Asia become healthier

Text by Toby Waters / Photos by Benjamin Parks

While we know we could probably eat better, drink less and exercise more, many of us go on happily believing that we’re actually quite healthy. Or, perhaps, we look at the cost of health food or gym memberships and think that they’re too expensive — and, anyway, can’t that wait until New Year? We all know these attitudes can be bad for us in the long run, but what could compel us to live healthier? John Mok of reinsurance firm Swiss Re believes that now, more than ever, not only is it possible to change our attitudes towards health — it’s necessary.

After beginning his career as a pricing actuary at a life insurance firm in Australia, Hong Kong-born Mok has gone on to become the head of Life and Health Client Markets Japan for Swiss Re, where he and his team focus on the life and health reinsurance business, partnering with clients — namely insurers — to bridge what is called the health protection gap.

“Asia’s health protection gap is defined as the amount of financial stress arising from unforeseen out-of-pocket medical expenses and the decision to forgo unaffordable treatment,” Mok explains. “The gap includes medical expenses not covered by insurers, social security or government.”

As a result of their inability to pay for health coverage upfront, many people have to dip into their savings, cut back on ordinary household spending or, in the worst cases, do without treatment altogether. This leads to not only poorer long-term health but also more expensive treatment when problems become so bad that they are otherwise unmanageable.

Despite its wealth, Japan is greatly affected by the health protection gap. Figures from Swiss Re’s Asia Health Protection Gap Report, which surveyed more than 16,000 consumers across 12 Asian markets, concluded that Japan’s health protection gap amounts to $218 billion, placing it third after China and India. The study also found that the level of financial stress for households in Japan can amount to 7.3% of the average annual household income.

“While large populations and the increasing prevalence of chronic conditions are the main reasons for the gaps in emerging markets, such as China and India, the gap in Japan can be attributed to both its ageing population and the relatively higher costs of healthcare,” Mok suggests. “And across all Asian markets, medical inflation rates are climbing much faster than the consumer purchasing index.”

In addition to healthcare issues, which inevitably are on the rise because of Japan’s ageing society, Mok identifies two other major problems in Japan that contribute to its health protection gap. First, more than half of the people surveyed (58%) reported that they consider themselves to be healthy, in spite of the fact that many were smokers or did less than 20 minutes of physical exercise a week. Secondly, partly due to more Westernised diets and improved disease screening, more people today are being diagnosed with chronic conditions, such as diabetes, hypertension and high cholesterol. Some 53% of households across Asia are currently dealing with chronic conditions.

These worrisome trends pose problems for insurers. But Mok is confident that — while his industry has a reputation for being “conservative and traditional” — Swiss Re is working with its clients to find solutions and is also exploring innovations.

Founded in Switzerland in 1863, Swiss Re is a reinsurance company that provides insurers with wholesale risk management and reinsurance solutions. It has a long history in Japan, having launched its first reinsurance business here in 1913 and opened a representative office in Tokyo in 1972. Today, Swiss Re Japan has the third-largest portfolio in the global Swiss Re Group.

To help ease the financial burden that many people are facing, Swiss Re has suggested an industry-wide provision of simpler insurance products for low- to middle-income earners. This would give them access to “a baseline of resilience”.

“We are also developing more comprehensive, targeted solutions for medium- to high-income segments,” states Mok.

But an ounce of prevention is worth a pound of cure. One means of stemming health problems before they begin is through wearable devices and fitness apps, already used by one in five survey respondents. These can track calories, count steps, and otherwise motivate users to pursue healthier lives.

“With technological advancements in recent years, we are finding more engaging ways to connect with our end-customers, playing a more active role in positively influencing their health and wellbeing,” says Mok. “A tech-enabled, integrated health and wellness programme — including an app, monitoring devices, coaching and a whole ecosystem of health-support services — would create the bridge between health and insurance outcomes.”

The majority of app-users (83%) also said that they’d be happy to share their information with their insurers, something that can benefit them hugely, according to Mok.

“Premium discounts provided by some Japanese insurers can be up to 30% for individuals who attain specified health goals,” he reveals. “Swiss Re has been working with a number of insurers to develop innovative health insurance solutions for Asian markets in this region.”

He also highlights Swiss Re’s launch, in April, of a diabetes management programme, which can monitor health and submit blood test results online through an app.

“At Swiss Re, we believe objective assessment of health conditions empowers and enables people to improve their health awareness and step up prevention measures,” Mok says. “Cross-industry, multi-lateral collaboration amongst insurers, healthcare and medical service providers and technology partners will continue to be a leading trend as the industry develops solutions to broaden and deepen coverage for more customers.”

When we think of advances in medical technology, we can no longer just think of improved operating or diagnosis machines. Devices like your phone or your smartwatch can — in conjunction with an invested third party such as Swiss Re — help to improve your health, reduce your costs, and close the health protection gap.  •