Redefining employee benefits in Asia Pacific

AIA Group’s Ambra Debernardi explains how the pandemic and recent macroeconomic changes have raised employee education and expectations on health insurance, pushing HRs to reconsider their employee benefits programmes


Asia Pacific’s public healthcare systems came under pressure during the pandemic, which prompted consumers to assess their protection gaps and seek alternative solutions.

This has sparked an increased focus on employee benefits, which now garner equal if not more attention than compensation when hiring new talent.

Employees are looking at the medical coverage that is provided by their employers more closely, with more knowledge, which has revealed a worrying gap between what employees expect and what employers are able or willing to provide.

The differentiation and customisation of employee benefits has become a powerful tool to retain and attract employees.

More comprehensive benefits packages make employees feel more appreciated by the companies they work for, which in turn makes them feel motivated, and more engaged and productive.

A robust health insurance programme is now expected to include:

  1. Relevant, comprehensive and targeted benefits with choice, flexible touch and mental health benefits. Waived exclusions now include fertility treatment, HIV/AIDS, treatments related to menopause and other behavioural health, including but not limited to autism, ADHD and individual voluntary solutions such as portable health insurance.
  2. An enhanced customer experience with digital and cashless journeys, more online-based services, as well as virtual care to make insurance more affordable and accessible.
  3. Targeted wellness and prevention schemes.

Creating a successful benefit package requires collaboration across multiple functions and proactive employee benefits management helps address healthcare budget concerns.

AIA is initiating conversations between HRs, CFOs and risk managers to discuss the potential financial advantages and flexibilities within benefit design and wellness as a risk management component.

For example, all of AIS’s risk management programmes now have comprehensive wellness services and support embedded within them.

Businesses address medical inflation

Offering a range of providers, hospitals and clinics can support competitive fee arrangements for members while maintaining a high quality of service and effectively managing health inflation.

Broad system coverage with deep integration between diagnosis, care and insurance helps control many of the common cost drivers in employee health insurance.

Common cost drivers include:

  1. Unnecessary care due to medical professionals recommending too many services or overprescribing.
  2. The underuse of preventive services, which is often linked to employee benefits design that lacks customisation across the members’ demographic.
  3. Poor health habits among many insured members.

The leading driver of medical costs, according to insurers, continues to be overuse of care (81%) due to medical professionals recommending too many services or overprescribing. Insured members’ poor health habits (58%) is the second leading driver.

The underuse of preventive services (46%) is also a significant cost driver and increased year over year due to, in part, the avoidance of medical care during the pandemic.

Most common and costly conditions

With rising affluence, urbanisation and ageing, the chronic disease burden has been growing steadily. During the pandemic, many patients delayed or skipped necessary care, including physician visits and medical tests.

Insurers in Asia Pacific identified cancer, cardiovascular and musculoskeletal as the top three conditions by cost.

Mental health and behaviour disorders are expected to be among the top five fastest-growing conditions by incidence of claims in this region in the next 18 months.

Interestingly, insurers have also ranked treatments related to reproductive system as one of the top five conditions that is affecting medical costs this year.

AIA has identified cancer, cardiovascular and lower back pain as the top three conditions by cost. Cancer continues to be the leading condition in terms of incidence of claims and cost.

Case management services across the region are seeking to optimise both the quality and choice of care to reduce unnecessary costs.

The acceleration of value-based care models and increased application of technology across the healthcare industry are key to managing cost inflation.

Care-delivery services outside the hospital are the fastest growing businesses for providers. Addressing the patient’s full health journey leads to improved affordability, quality, access and experience.

In Singapore, increased demand for home-based services and virtual care have helped reduce hospital re-admissions and improved preventative care.

However, these services must be powered by data and analytics-enabled clinical services for optimal care coordination and enhanced member engagement.

Investment in this space should focus on providing an equitable, sustainable and transparent use of the available resources to achieve better outcomes and experiences for members.

Prioritising pre-authorisation requirements and promoting outpatient day surgery also help reduce unnecessary inpatient costs.

Scale and alternative financing strategies

Many multinational companies are investing and expanding in Asia-Pacific and they demand centralised, cost-efficient services and customisable employee benefits to meet global, regional, as well as local needs.

Captive strategies have been able to support multinational corporations in enhancing administration efficiency by lower administration costs in exchange for volume, while unlocking tailored support in the design of employee benefits and focusing on high quality service.

AIA has an unparalleled geographic footprint paving the rebuilding and launching of our wholly owned employee benefits network, AIA Regional Solutions, to meet the above needs.

AIA Analytica, a single log-in platform, addresses and provides data-driven insights and actions by helping captives optimise their companies’ employee benefits and wellness programmes while closely monitoring key trends, costs and opportunities for continuous improvement.

Captive strategies are also supported by WorkWell, AIA’s wellness framework enabling a high level of customisation embedded in risk management products.

AIA Regional Health Passport connects employees to quality healthcare providers across Asia-Pacific, thus enabling cross-border, cashless access to treatments at preferential pre-negotiated rates.

12 August 2024
5-6 November 2025

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