Health Insurance IIIC Istanbul - Willem Claasen - Swiss Re (2014)

1. IIIC | Istanbul, September 2014
HEALTH
INSURANCE
IIIC IstanbulWillem Claasen -Swiss Re
September 2014

2. Global Health market
context and trends
2IIIC | Istanbul, September 2014
Key message:
Increasing demandfor health products; primary market growth for 2013
to 2020 expectedto be5% and10% p.a.for mature andhigh growth
markets respectively
(source: Swiss Re Economic Research and Consulting)

3. Globally, the demand for insurance based health
solutions is increasing
Macro
Trends
in
Health
Fragmentation of
society/family
Increase in individual
provision (mainly in Asia)
Growing job mobility
Expats/migrant workers
create new coverage
needs (mainly in Asia)
Aging Society
Health andcareneeds
increase substantially in
old age
Healthcare cost explosion
Driven byincreasing trend in
cost andutilisation of health
services
Pressure to reform
financing of healthcare
Role of the state
reducing; growth of
private solutions
New middle income classes
Growing interest in private
insurance (mainly in high
growth markets)
3IIIC | Istanbul, September 2014

4. 100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Belgium
UK
Portugal
Ital
y
Luxembourg
Turke
y
Netherlands
Switzerland
Spain
Austria
Poland
Czech
SlovakiaIndi
a
Vietnam
Philippines
Singapore
Indonesia
China
Malaysia
SouthKorea
Australia
Japan
Thailand
US
Canada
Brazil
Mexico
Chile
Colombia
How health expenditure breaks down
Europe
State Financed / Social Insurance Out of Pocket
Asia
Private Voluntary Insurance
Americas
Other
Total healthcareexpenditure breakdownin 2012
Sources: The World Health Organization 2012, Axco, Swiss Re Global Health Team and Economic Research & Consulting.
IIIC | Istanbul, September 2014

5. Europ
e
5IIIC | Istanbul, September 2014

6.  Predominantly, asocial health insurance system
 Material cost-sharing on the part of beneficiaries
Approaches to healthcare financing in major European
markets
CH NL
 Mandatory, basic level of medical insurance
 Means-tested , state-funded premiumsubsidy
DE
 Social health insurance for most of the population
 Mandatory private insurance for those outside of SHI
GB
E
S
FR IT
 Comprehensive national health service for all
 Healthcare (largely) free at the point of delivery
TR
6IIIC | Istanbul, September 2014

7. Role for private medical insurance in
healthcare financing in major European markets
DUPLICATIVE
[to universal, state-
funded healthcare]
more choice over
timing, setting and
provider of care
better standard of
'hotel accommodation'
cover for some
treatments not
provided by the NHS
GB ES
PRIMARY /
SUBSTITUTI
VE
[in place ofsocial
health insurance ]
privately-managed
insurance isthe means
to deliver basic health
insurance provision
insurance premiums
met in part by the state
DE
CH
NL
FR IT
NL DE
CH
SUPPLEMENTARY
[to social health
insurance ]
offset out-of-pocket
personal contributions
for SHI benefits
 insurance for health
benefits outside of
scope of SHI
COMPLEMENTARY/ TR
7IIIC | Istanbul, September 2014

8. Turkey vs EU
Sources of healthcare financing [%]
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Belgium
UK
Portugal
Ital
y
Luxembourg
Turkey
France
Germany
Netherlands
Switzerland
Spain
Austria
Poland
Czech
Slovakia
State Financed Mandatory Insurance Out ofPocket Private Voluntary Others
Total healthcareexpenditure breakdownin 2012
Sources: The World Health Organization 2012, Axco, Swiss Re Global Health Team and Economic Research & Consulting.
IIIC | Istanbul, September 2014 8

9. Turkey vs EU
Sources of healthcare financing [USD]
400
350
300
250
200
150
100
50
-
Belgium
UK
Portugal
Ital
y
Luxembourg
Turkey
France
Germany
Netherlands
Switzerland
Spain
Austria
Poland
Czech
Slovakia
Billion
s
State Financed Mandatory Insurance Out ofPocket Private Voluntary Others
Sources: The World Health Organization 2012, Axco, Swiss Re Global Health Team and Economic Research & Consulting.
IIIC | Istanbul, September 2014 9

10. Some common themes in the financing and delivery of
healthcare in Europe, of relevance to private medical
insurance in Turkey
 GP / family doctor role as agatekeeper
– controls access to and costs of secondary / specialist care
– GPs may be used to direct clinical priorities and the flow of
resources through the system
– integral to the systemin:
– a (managed care) optionin:
 Increasing potential scopefor supplementary private medical
insurance benefits
– as governments seek to control cost escalation within SHI
regimes by placing additional restrictions on reimbursements
 Gradualpaceof changein the scopeof UHI/SSS provision does
constrain growth opportunities in private medical insurance
10IIIC | Istanbul, September 2014

11. IIIC | Istanbul, September 2014
Health in Turkey
Private Health Insurance
Even if private health insurance penetration is low in Turkey
(<3%), it has experienced significant development over the last
decade, due to improvements in private health services,
increased public awareness and insufficient service delivery by
the state healthcare system.
Premium volumes (TRY m)
Health system
A successful reform of Health System occurred since 2003.
Health services are now financed through a Social Security
scheme covering the majority of the population. Services are
provided both by public and private sector facilities.
Products
Over two million people now have private medical cover, much of
which is through employer-sponsored schemes as it is the most
popular employee benefit.
From an insurer perspective, these comprehensive group health
insurance scheme are barely profit making, whereas individual in-
patient policies are morepromising.
Critical illness policies are available either as stand-alone policies or
as riders to other contracts.
No demand for Long-Term Care in Turkey for cultural reasons. Older
people are cared for within the family rather than in state
institutions or commercially-run establishments.
0
500
1'000
1'500
2'000
2'500
3'000
2008 2009 2010 2011 2012 2013
MedEx
Source: WHO, AXCO, TSB, Swiss Re
Note: FX @ 01/04/14 1 EUR = 2.97 TRY
CAGR
+13%
11

12. Percentage of population that have private
medical insurance cover
20
40
60
80
100
120
0
%of Population that have PMI
Germany
Spain
Netherlands
France
UK
Switzerland
Belgium
Austria
Portugal
Turkey
Data source:
IIIC | Istanbul, September 2014

13. 13IIIC | Istanbul, September 2014

14. Legal
notice
14IIIC | Istanbul, September 2014
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