After Blue Cross was acquired by AIA, is the first-year premium for Voluntary Health Insurance halved?

AIA completed the acquisition of Blue Cross from the Bank of East Asia by the end of August this year, officially making Blue Cross a part of AIA. Although both companies are now under the same roof, the first-year premium for semi-private room level, no-deductible Voluntary Health Insurance Schemes (VHIS) shows a staggering difference of up to 50%.

AIA management revealed during an interview that Blue Cross is positioned to target the younger market, while AIA will focus on the mid-to-high-end customer segment, with both brands developing in parallel to cater to different markets. However, consumers are more concerned about the product differences between Blue Cross and AIA. In the past, Blue Cross, being a smaller player with less brand influence and weaker sales channels compared to AIA, needed to offer products with lower premiums but higher coverage.

Now, after being integrated into AIA’s portfolio, the discount on scale and brand effect has significantly reduced, yet the premium differences remain substantial, seemingly presenting a better choice for consumers. Comparing the coverage and premiums of the semi-private room level Voluntary Health Insurance Schemes from both companies clearly illustrates this.

Table: Comparison of AIA and Blue Cross Semi-Private Room Level, No-Deductible Voluntary Health Insurance Schemes

(Assuming the insured is a 35-year-old non-smoking male)

According to the analysis by 10Life actuaries, both the Blue Cross Dynasty VHIS Plan (abbreviated as Blue Cross Dynasty) and the AIA Voluntary Health Insurance Privilege Plus Scheme (abbreviated as AIA Privilege Plus) achieve a full score in medical coverage rating, with only minor differences in certain aspects such as lifetime limits and the number of additional benefits. Therefore, the overall level of high coverage is comparable between the two.

However, there is a significant disparity in premiums between the two products. Assuming the insured is a 35-year-old non-smoking male opting for a no-deductible plan, the first-year premium for Blue Cross Dynasty (HKD 10,834) is nearly 30% lower than that of AIA Privilege Plus (HKD 15,448). When comparing the average annual premium over the next 10 years, Blue Cross Dynasty is also 26.5% cheaper than AIA Privilege Plus, with a total premium difference of HKD 44,020.

Agents often claim to introduce the best Voluntary Health Insurance Schemes to their clients. However, even though the Blue Cross Dynasty offers better value for money within the same group, due to licensing restrictions, AIA agents may only be able to sell the relatively less cost-effective AIA Privilege Plus.

Currently, purchasing Blue Cross Dynasty is akin to buying an AIA product at a discount, but this premium "discount" may not last forever. In fact, BEA Life previously had a deferred annuity product called "Smart Elite" with a very high guaranteed return rate. Shortly after AIA acquired BEA Life, this deferred annuity product was discontinued.

Moreover, the premiums for Voluntary Health Insurance Schemes are not fixed annually. When insurance companies need to maintain profitability, even with guaranteed renewability, they may increase premiums in the future. However, if readers believe that Blue Cross Dynasty offers better value for money, they can seek assistance from a 10Life insurance advisor.

Note:
1. The above premium information is updated as of 16th November 2022 and does not include the premium levy collected by the Insurance Authority.
2. This article was last updated on 16th November 2022.

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.