Fri, Aug 05, 2011 - Page 12 News List

Taiwanese looking to hedge medical expenses: survey

HEALTH WORRIES:The Swiss Re report said 55% of Taiwanese aged 20 to 40 said they plan to purchase health insurance products during the next 12 months

By Crystal Hsu  /  Staff Reporter

Taiwanese investors generally display a low risk appetite, but many are receptive to products that hedge against future medical expenses, suggesting a business opportunity for protection insurance products, a survey released yesterday showed.

The poll, commissioned by the world’s second-largest reinsurer, Swiss Reinsurance Co, showed that among 13,800 consumers aged between 20 and 40 across 11 Asia-Pacific markets, Taiwan ranked sixth in terms of risk appetite.

The survey aimed to dissect and compare consumer risk attitudes in the region after Asia’s total insurance premiums hit US$1.6 trillion last year, accounting for 38 percent of the global premium pool, a Swiss Re report showed.

“Overall, Taiwanese aged 20 to 40 are not prone to excessive risk taking,” Xing Li (邢鸝), Swiss Re’s Beijing assistant vice president and economist, told a media conference in Taipei.

People in the 20 to 40 age group, singled out for the study because they are the most likely to buy insurance products, are more willing to take risks on their health and career, but are reluctant to take risks relating to their finances.

Taiwanese respondents lag behind their peers in Japan, Hong Kong, Australia, Singapore and South Korea in terms of overall risk appetite, but are ranked ahead of their counterparts in Indonesia, China, Malaysia, Vietnam and Indonesia, the survey found.

The findings reaffirmed a positive correlation between risk appetite and the degree of economic development in individual markets, Xing said.

Taiwanese rise to third place when measuring health concerns, with 55 percent indicating they plan to buy health insurance products in the next 12 months, the report said.

That is because they are worried about potentially costly medical expenses in their later years, the report said.

By product preference, 20 percent of respondents intend to buy protection policies to hedge against major illnesses, while 18 percent favor policies with medical expense coverage, the report said. Another 11 percent plan to buy life insurance policies and 10 percent are interested in policies carrying compensation should they become disabled, the report said.

Twenty-two percent plan to buy investment-linked insurance products, the report showed, reflecting the penchant among Taiwanese for quasi-savings policies because they provide higher yields than time deposits, but carry shorter maturities than life insurance products.

Respondents interested in life and medical insurance products prefer sales agents to other channels, the survey showed.

“That means there remains room for sales agents in the industry,” Xing said.

Despite a middle ranking in per capita income, Taiwanese top their peers worldwide when judged by an insurance premium penetration rate of 15.4 percent last year, the report said.

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