The average sum assured in Hong Kong was close to USD 50,000, compared to more than USD 200,000 in Australia. Is that due to substantially higher costs in Australia, or are Australians more inclined to get adequate cover? I think part of the difference can be explained by the product design. Australian policies are mainly protection-oriented and structured on a Yearly Renewable Term (YRT) basis. Hong Kong products typically involve a savings element and premiums are often level and limited pay. However, if we look at the premium spend for the next 20 years, for example, for a 35-year-old, the difference between Hong Kong and Australia is not very marked.
Of course, some Hong Kong consumers may be already covered to an extent by conventional medical schemes. However, this coverage is often inadequate or does not extend to supplementary medical treatments. This could explain why the Hong Kong government has been pushing for a Voluntary Health Insurance Scheme (VHIS).
Coming back to the question on treatment costs: As an actuary, I embarked on a journey to find out the treatment costs of various diseases with the aim of coming up with an average treatment cost weighted by causes of claims.
We dug into different surgical procedures, costs of hospital stay, chemotherapy, radiotherapy, targeted therapy, etc. With our market research and reference to the Hospital Authority’s List of Charges, we came up with estimates to treatment costs ranging from around HKD 500,000 to HKD 1.2 million with a weighted average of around HKD 850,000.