AIA Hong Kong today announced the key findings of its AIA SME Group Medical Protection Survey 2015. The survey examines the preferences of SME employers with regard to group medical benefits, the group medical benefits provided to employees as well as the protection gap and market demand of group critical illness protection. Key findings of the survey are:
- Employees are dissatisfied with their companies' benefit offerings and group medical benefits are inadequate;
- More than 70% of employers believe that employees value the provision of medical insurance cover;
- There is widespread misconception among employers that group medical benefits mean expensive premiums and additional administrative burden;
- Critical illness protection is the most desired benefit among employees, however only 1% of SMEs provide group critical illness protection;
- 65% of employers consider group critical illness plans that compensate employers to be attractive;
- More than 10% of employees admit to having abused their sick leave privileges, but the rate of malingering among employees without group medical benefits is almost double that of those who have.
Mr. Jacky Chan, Chief Executive Officer of AIA Hong Kong and Macau, said, “SMEs account for over 98% of the business establishments in Hong Kong1 . Facing an increasingly difficult business environment, retaining and recruiting talents are among the top concerns of many employers. Group medical benefits are an essential investment in human resources; however, they are still uncommon among SMEs. This survey reveals that more than 90% of employers recognise the importance of group medical benefits in boosting the sense of belonging of employees, but there is a gap between employer perspective and employee expectations. As ‘The Real Life Company’, AIA Hong Kong has leveraged on our wealth of experience in product development to launch a market-leading product tailor-made to meet the needs of SMEs. The new plan helps to enhance the competitiveness of SMEs by both addressing the concerns of employers and providing adequate medical protection for employees.”
AIA Hong Kong commissioned GfK Hong Kong, an independent market research company, to conduct the survey via street intercept interviews in August 2015. The survey respondents were 1,004 adults aged between 18 and 59 with equal proportion of employers/management and employees.
Key findings of the survey:
(1) Employees are dissatisfied with their companies' benefit offerings and group medical benefits are inadequate
- More than half (56%) of interviewed employers or management said they provide group medical benefits to their employees. Over the last financial year, employers spent an average of HK$1,450 per month on employee benefits for each staff member. They are willing to pay HK$350 in monthly premiums for medical insurance for each employee;
- Overall, only half (51%) of surveyed employees are satisfied with their employer’s existing benefit offerings. It is worth noting that the rate of satisfaction among employees without group medical benefits is three-tenths (28%), far below the nearly seven-tenths (68%) among employees covered by group medical benefits and 60% of them consider their existing medical benefits and protection as only fair or inadequate.
- Among surveyed employees who have group medical benefits, outpatient benefits (92%), hospitalization benefits (73%) and surgical benefits (32%) are the most commonly covered expenses under their group medical plans, while critical illness and other coverage features are often excluded.
(2) More than 70% of employers believe that employees value the provision of medical insurance cover
- Employers are generally positive about providing group medical benefits. More than seven-tenths (71%) of employers believe employees value the provision of group medical insurance cover. Nearly nine-tenths (87%) recognise group medical benefits as key to driving employee satisfaction. Over nine-tenths (91%) of employers agree group medical insurance can boost the sense of belonging of employees.
(3) There is widespread misconception among employers that group medical benefits means expensive premiums and additional administrative burden
- Despite this, the survey indicates lack of understanding on group medical benefits among many employers. Major misunderstandings include complex application procedures (84%), additional administrative burden on companies (81%), group medical insurance schemes available in the market do not include group critical illness benefits (80%), expensive premiums (74%) and no discounted group premiums for SMEs (67%).
(4) Critical illness protection is the most desired benefit among employees, however only 1% of SMEs provide group critical illness protection
- Critical illness (60%) ranks as the top most desired benefit among employees, followed by outpatient (53%) and dental care (48%). For employees already covered by group medical benefits, the percentage is even higher with 65% who want their employers to provide critical illness coverage. However, only 1% of SMEs interviewed have enrolled in a group critical illness protection plan;
- Almost seven-tenths (68%) of interviewed employees are not covered by group or personal critical illness protection. When asked about their ability to meet medical expenses in the event of being diagnosed with a critical illness, the average rating of all employees is just fair (5.9 out of 10 points). This reflects the tremendous need and demand among members of the working population for group critical illness protection;
- The survey reveals that employers do not fully understand employee expectations of group critical illness cover. Only one of three (33%) employers is considering offering critical illness protection in the next one to two years. The maximum monthly premium employers are willing to pay for each staff member is HK$357 on average (sum assured at HK$100,000).
(5) 65% of employers consider group critical illness plans that compensate employers to be attractive
- The average rating of “readiness” among employers to assume the sudden workload of an employee diagnosed with a critical illness during his/ her sick leave is 6.4 out of 10 points. Given the relatively low level of readiness, 65% of employers consider the provision of a lump sum of money, which allows them to hire a new employee, in addition to compensation for critically ill employees, to be an attractive feature of group critical illness plans.
Other interesting findings:
(6) Employees take 3.3 days of sick leave every year, while almost 90% have to work when sick
- More than eight-tenths (82%) of employees have taken sick leave in the past 12 months, with a vast majority (75%) taking five days or less and only 8% taking six days or more. The average amount of sick leave taken is 3.3 days;
- Nearly nine-tenths (87%) employees admit to having worked while sick in the past 12 months, of which 39% say they were required to work on many occasions of illness. The major reasons for working while sick are “too much work” (52%), “no time to consult a doctor” (36%) and “not necessary to see a doctor as one will recover with time” (30%) respectively.
(7) More than 10% of employees admit to having abused their sick leave privileges, but the rate of malingering among employees without group medical benefits is almost double that of those who have
- More than one-tenth (12%) of employees who have taken sick leave in the past year admit to have malingered. The most common reasons are family issues (8%), a follow-up job interview (2%), a birthday (2%) and late for work due to traffic (1%);
- Over four-tenths (42%) of employers worry about the possibility of sick leave abuse with the provision of group insurance protection. However, the survey shows that these concerns are unfounded as the rate of malingering among employees who do not have group medical benefits is 16%, nearly double that of those who have (9%). More interestingly, the rate of malingering (4%) due to job interviews for employees without group medical benefits is four times those covered by group medical benefits (1%).
Mr. Thomas Lee, Head of Corporate Solutions, AIA Hong Kong and Macau, said: “Amid an alarming trend of more people contracting critical illnesses at a younger age and sky-rocketing medical inflation, the survey reveals that employees want additional coverage against critical illnesses. This suggests that people are worried about being unable to afford the soaring medical costs associated with critical illness. In order to meet the pressing demand among SMEs for group critical illness protection, AIA Hong Kong is launching a brand new PROMISE Group Critical Illness Protection Plan which is unique for its affordable premiums and low threshold. The plan also features the Staff Replacement Benefit, a first-in market2 feature among group critical illness protection plans. If an employee is diagnosed with a critical illness, the company he/she works for will also be compensated. This benefit will minimise the impact on company’s business operations due to staff sickness while providing the employee with comprehensive critical illness protection in his/her time of need.”
Key features of AIA’s new PROMISE Group Critical Illness plan include:
- Insurance premium as low as HK$0.3 per day per person (assuming that the insured is a 24-year-old male with sum assured at HK$100,000);
- Simple application and easy entry with a minimum of 10 employees;
- Staff Replacement Benefit (first-in-market2 ) – full protection for both employers and employees if an Insured Member is diagnosed with a covered critical illness. 10% of the sum assured will be paid to employers to pay for expenses to fill the vacancy while the employee can stop work to undergo treatment and recuperate;
- 4 different sum assured amounts for employers to choose from (HK$100,000, HK$200,000, HK$300,000 and HK$500,000)
- Critical Illness Benefit – extensive coverage for 56 critical illnesses (53 major illnesses and three minor illnesses). If an Insured Member is unfortunately diagnosed with one of the covered major critical illnesses, a critical illness benefit payment equivalent to 100% to the sum assured will be payable to him / her for settling the medical related expenses and offering financial support. The plan also provides a Limited Advance Payment for Critical Illness3 ;
- Optional Conversion Privilege – employer can select conversion privilege in addition to PROMISE, so that an Insured Member can convert to a designated AIA critical illness insurance plan upon his / her retirement or termination of employment at age 65 or below;
- Waiver of medical underwriting up to HK$500,000 insured amount4
As a leader in Hong Kong’s medical insurance market, AIA Hong Kong provides a full suite of medical insurance plans for SMEs. These plans can be tailor-made to meet the different needs of companies in their efforts to provide employees with comprehensive protection ranging from life, accident, hospitalisation and critical illness as well as optional outpatient and Chinese medicine. AIA Voluntary Solutions allows employees to choose their desired coverage for themselves and their family at a discounted premium.
AIA PROMISE Group Critical Illness Protection Plan is designed to meet the needs of both employers and employees. Let’s take 40-year-old manager in a trading company Jason, who is married with a son and a daughter, as an example. His employer offers AIA’s PROMISE Group Critical Illness Protection to all employees and each employee is insured for HK$500,000. If Jason unfortunately suffers a stroke after six months, it would cost him a total of HK$137,7935 in medical related expenses. He would be unable to work to earn income due to treatment, but would still need to fulfil his family obligation of HK$520,8006 over the two-year treatment. The total expenses would be HK$658,593. In addition, his employer would have to recruit a temporary worker to cover Jason’s job responsibilities during his treatment recovery period.
As the employer purchased AIA’s PROMISE Group Critical Illness Protection, a Critical Illness Benefit of HK$500,000 will be paid out to Jason for settling the bulk of the medical fees and expenses during rehabilitation. This financial support would offer him the peace of mind to fight against the disease. Furthermore, the company would receive HK$50,000 (10% of the sum assured) as a Staff Replacement Benefit, allowing the employer to fill the vacancy and thus minimise company losses.
- Source: Trade and Industry Department－https://www.tid.gov.hk/tc_chi/smes_industry/smes/smes_content.html.
- AIA’s internal data gathered in November 2015. The above information is for reference only. For details, please refer to the product brochure and the terms and conditions of the Policy contract.
- Staff Replacement Benefit will not be made to Policyholder in the event that an Insured Member undergoes any diagnosis under Limited Advanced Payment. Staff Replacement Benefit is limited to one-time payment only and shall cease upon payment.
- For detail, please refer to page 5 of the relevant product brochure – Waiver of Medical Underwriting table.
- The data refers to AIA actual claim cases in 2013.
- Social Science Research Centre, the University of Hong Kong, “AIA Consumer Study of Hong Kong Insurance Market 2012”.
The above information, case illustration and figures are for reference only. For the details of the product features, content and conditions, please refer to the product brochure and the terms & conditions of the Policy contract.
About AIA Hong Kong and AIA Macau
AIA Hong Kong and AIA Macau are subsidiaries of AIA Group Limited. AIA Group Limited established its operations in Hong Kong in 1931. We have the largest team of financial planners in Hong Kong and Macau*, now over 11,000, as well as an extensive network of brokerage and bancassurance partners who serve more than 1.8 million customers. Our products range from individual life, group life, accident, medical and health, personal lines insurance to investment-linked products with numerous investment options. We are also dedicated to providing superb product solutions to meet the financial needs of high net worth customers.
* As of 31 May 2015
AIA Group Limited and its subsidiaries (collectively “AIA” or the “Group”) comprise the largest independent publicly listed pan-Asian life insurance group. It has a presence in 18 markets in Asia-Pacific – wholly-owned branches and subsidiaries in Hong Kong, Thailand, Singapore, Malaysia, China, Korea, the Philippines, Australia, Indonesia, Taiwan, Vietnam, New Zealand, Macau, Brunei, a 97 per cent subsidiary in Sri Lanka, a 26 per cent joint venture in India and representative offices in Myanmar and Cambodia.
The business that is now AIA was first established in Shanghai over 90 years ago. It is a market leader in the Asia-Pacific region (ex-Japan) based on life insurance premiums and holds leading positions across the majority of its markets. It had total assets of US$172 billion as of 31 May 2015.
AIA meets the long-term savings and protection needs of individuals by offering a range of products and services including life insurance, accident and health insurance and savings plans. The Group also provides employee benefits, credit life and pension services to corporate clients. Through an extensive network of agents, partners and employees across Asia-Pacific, AIA serves the holders of more than 29 million individual policies and over 16 million participating members of group insurance schemes.
AIA Group Limited is listed on the Main Board of The Stock Exchange of Hong Kong Limited under the stock code “1299” with American Depositary Receipts (Level 1) traded on the over-the-counter market (ticker symbol: “AAGIY”).
About AIA Corporate Solutions
AIA Corporate Solutions has over 60 years of experience in providing employee benefits solutions and group insurance products & services in Hong Kong. Continually seeking new ways to improve, we have established ourselves as a market leader in this field to provide protection for employees. We leverage on our extensive insurance experience and solid financial structure to provide custom-made plans for small to medium sized companies and multinational organisations to advance their business goals and meet their Human Resources’ objectives.
Bentley Communications Limited
Mr. Kevin Chan
+852 3960 1903