Ensuring a healthy life as an expatriate(3)

Changing market

Two demographic changes have become a critical impetus to the development of high-end medical insurance in China.

The market changed dramatically with a lot more young expats coming to the country so the percentage of highly paid expats fell.

"We are definitely seeing a lot of people who arrive here in their early 20s. With a lot of Mandarin being taught in universities, they think that Asia, particularly China, is the place to be right now," said Hayes of Pacific Prime Insurance Brokers Ltd.

Ferte also sees a growing number of local hires where medical insurance is not part of the package. "What they can afford is not as much as senior expats but the volume is impressive."

As a result, many insurers have introduced tier-plans to cater to varied needs. For instance, Cigna has launched a new insurance package titled Jade in addition to its existing silver, gold and platinum plans, targeted at entry-level buyers.

If you are a 22-year-old Frenchman teaching a language in China, Hayes said, you wouldn't want to get a Cigna or Allianz full package because you could ill afford it.

On the contrary, as most of these young and junior foreigners are on local packages, it increases the demand for local insurance, most likely major medical hospitalization plans. That has prompted insurers to design products with that in mind.

The other shift is the growing awareness of quality medical services by the booming Chinese middle class.

Buchan believes more Chinese will in the long-term start operating businesses overseas. When sending staff and their families abroad, Chinese firms are expected to cover their employees so they can access the best medical facilities available.

However, more are eyeing the local market. Hayes' office has developed a Chinese sales team with eight employees targeted specifically at the local market.

"We have about 15 percent of Chinese (as our clients) and we expect that number to soar over the next three years," he said.

The insurance business will unlock its full potential only when more Chinese start swimming with the tide, said Hayes.

Cigna's Zhou said about half of his company's 7,000 clients are Chinese nationals. Four years ago all policyholders were overseas people.

"We have seen an increasing number of international medical centers, foreign and VIP sections in public facilities and extensive use of advanced medical equipment and imported drugs. More customers can and are willing to afford top-up cover," he said.

"Once Chinese people are more aware of the benefits of high-end medical insurance, it will be an exciting and competitive market," Zhou forecast.

After all, the term high-end medical insurance is "misleading", he added.

"It is not luxury medical insurance. On the contrary, it is real medical insurance."