The Fallout of China’s Pollution Problem

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April 7 (Bloomberg) –- Bloomberg’s Francis Chan and Steven Lam discuss the impact of pollution and obesity on China’s insurance industry. They speak to Rishaad Salamat on Bloomberg Television’s “On The Move Asia.” (Source: Bloomberg)

Health in asia.

Let's have a look at the sort of challenges china is facing on the health front.

Joining us is francis chan and stephen lamb.

Pollution, an important issue.

There are also insurance implications.

If you talk about the health care expanding the asia-pacific area, it is estimated to reach 1.3 -- $1.3 trillion in 2013. in 2018, it is expected to rise to $1.8 trillion.

Most unfortunately, most asian governments don't have a project for it.

They only pay for less than 50% of spending, which will leave huge room for growth of private health insurance companies.

That is one of the big trades, isn't it?

People investing in china, health care.

It is one of the most crowded trades around.

There'll be problems with health insurance.

Yes, of course.

What we have seen is that companies like picc have lost a lot of money and shaved off profits because of running these government commissioned programs.

Picc wrote up for .5 billion yuan in health insurance premiums, but the average cost and the average premium per person is 45 yuan.

How do they make money?

That is the problem.

With pollution, but other things as well -- critical illness, and one of the other critical things contribute to that is the growth of obesity.

Type 2 diabetes is becoming a big problem.

Diabetics, 100 million people in china.

It is like 7% of the whole population.

We are talking about 100 million people, which is the population of a few countries in the world.

We will see a lot of health programs that cater to that kind of problem in china.

This gets us to other health issues.

This is a western health problem, as well.

Isn't that right, steven?

They have to be prepared for that, these health care insurance company.

Exactly.

That is the point.

Chinese insurers are getting more innovative to try to grow out insurance policies like smart insurance, high temperature insurance, what have you, to go around and try to figure out ways to monetize -- you have to get the actuaries hard at work.

Exactly.

Tell me about the general trends emerging in asia.

Of course, we do see a fast rising medical costs in the region.

If we tried to highlight the medical costs and china and india, they grew 15% over the past three years.

That means over the next 5-6 years, they would double perhaps.

To do with that problem, governments are try to leverage more technology, and also, they are trying to put a curb on any rising drug costs.

For instance, the china government put a ban on drug markets for public hospitals in 2015. hopefully, health insurance companies can issue more products for the mass-market.

Lower medical costs will make it more affordable.

Did you have something to add?

I was just going to add onto his point.

In china specifically, the share of the public spending in total health care expenditure rose quite rapidly over the last couple of years because of aging, pollution.

The government is running a lot of higher costs.

This text has been automatically generated. It may not be 100% accurate.

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