ING Insurance Bhd is eyeing a bigger piece of the medical or healthcare insurance market through its employee benefits coverage, its president Datuk Christopher Davies said.
Business in the employee benefits coverage was one of the fastest growth segments for ING last year, touching RM124mil in premium income, compared with RM112mil in 2001 and RM91mil in 2000.
Primarily, we provide companies with health coverage and term life coverage for their employees. We have 23% market share in the medical or healthcare sector currently, Davies told StarBiz in an interview.
The company provides coverage to more than 2,000 corporate clients with 700,000 employees.
However, he cautioned, it was a difficult business that had to be managed very carefully due to the potential high loss ratio on claims.
As it was a very specialised business, poor management would mean losing a lot of money, he said.
We have been in this sector in Malaysia for 14 years (previously through Aetna) and last year was the first year we have ever made a profit, he said.
The Netherlands-based ING Group acquired Aetna in December 2000. On May 6, 2002, ING Insurance Bhd became the official name for its local operations.
Bank Negara had expressed concern on the profitability of the health business, generally. And, it takes a great degree of expertise and substantial investments in infrastructure for this business. Hence, it is not a business that a company could enter easily.
It also takes a lot of systems capabilities as it is a high processing business in terms of volume. When our clients submit their claims, they want their claims processed fast, Davies said, adding that ING had invested RM4mil in a new computer system this year and employed more than 200 in this employee benefits department.
ING's capability to price the employees benefits business properly helped to turn around the financial performance of that segment, and that came from experience, Davies said.
In addition, ING was improving the efficiency of its systems annually to handle the business, he said.
The large multinational corporations recognise the expertise we bring to that business and the financial strength of ING to be able to provide that service and meet their claims obligations, so I think it is becoming easier for us to sell the plans that have been correctly priced, he explained.
ING's group health coverage plan includes emergency out-patient treatment, surgery performed on an out-patient basis while optional benefits list offer long-term care, major medical, out-patient clinical and maternity.
On growth potential in employee benefits coverage, Davies expects companies to continue providing employees benefits for their staff as good medical coverage would make them attractive employers.
As for 2003, ING is confident of achieving its overall growth target of 25% in first-year premiums, Davies said, adding that the company achieved RM162mil in first-year premiums last year, representing a 15% growth from the previous year.
Last year, ING hit the RM1bil mark in gross premium income while its total assets grew to RM5bil.
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