Civica
Financial intelligence for Asia's healthcare markets
 
 
Remember me:

Analysis: The risk of regret

A new report from QBE Insurance, Australia's largest global insurer, reveals that 22% of healthcare companies in Hong Kong have suffered from legal and regulatory compliance issues over the past 12 months. The Risks of Regret report looks at both current and future business challenges and opportunities, and how well-prepared companies are to deal with risks.

“Our research revealed that many companies are more likely to seek business liability and professional indemnity insurance only after something has happened. What this means is that by waiting until after the fact to protect themselves, they are missing out on any compensation for the initial event and in the process potentially putting business stability in jeopardy,” said Mark Walker, CEO of QBE Hong Kong.

The research found that in the past 12 months, the most frequently encountered risks in addition to loss of income due to business interruption were: equipment breakdown; legal and regulatory compliance issues; and staff injured while working.

QBE’s research reveals that the tendency of companies to react afterwards is common across various types of risk. Of the businesses that experienced customer fraud or fraudulent payments via the internet, two-thirds took action afterwards. Meanwhile, 60% of the businesses that had sensitive data stolen via the internet took action afterwards. For those experiencing other liability problems, the post-event reaction was also high: public or third-party liability due to accidents or business negligence (54% took action after); business systems or computers being hacked (46% reacted); and public or third party liability issues (38%).

“Surprisingly, there were a number of respondents in Hong Kong who also said they took no action even after experiencing an incident,” said Walker. For example, a quarter of the companies interviewed acknowledged that they had encountered public or third-party liability due to problems with products or services but had still not made any changes to their risk controls or insurance protection after the incident.

“Quite frankly, it is alarming that companies are not seeking to better protect themselves through business liability and professional indemnity insurance given all the risks and challenges that exist out there,” said Walker. “In an increasingly litigious world, with professional liability moving up on the agenda, Hong Kong‘s companies need to be encouraged to do more to protect themselves and their customers.”

The Risks of Regret report also reveals that nearly all Hong Kong respondents have some form of business insurance, including general accident and employee compensation cover. However, awareness and purchase of business liability insurance protection is far lower. Only 67% of Hong Kong respondents were aware of the business liability cover and less than half had taken out such insurance.

The same research also found that both awareness and usage for public and product liability insurance further decreases at 36% and 21% respectively, while professional indemnity insurance stands at 24% awareness and 13% usage. Figures for director and officer liability insurance were similar at 24% awareness and just 12% usage.

When asked why companies did not own business liability or indemnity insurance, a third said they believe their financial risk is reduced sufficiently because they are limited companies. A third of Hong Kong companies also cited budget issues and almost a quarter said their business is too small.

“It is also somewhat scary to me that 13% of the companies interviewed said that having business liability insurance is something that never actually crossed their mind,” noted Walker.

Respondents were also asked what were the biggest challenges they face currently. Business cost reduction (40%) and customer retention (37%) scored highest, followed by customer acquisition (35%), talent acquisition (34%) and business profitability (34%).

The future potential for risk could further depend on three key trends that Hong Kong respondents view as important to their business in the next 12 months: technological innovation (23%), rising expectations for personalised customer services and products (22%) and a continued business slowdown (20%).

“Our research found that there is a gap between what companies view as acceptable risk and what they think needs to be protected by business liability and professional indemnity insurance,” Walker added. “Given the various challenges from economic to competitive – including the increasing pressure to adapt to new trends – companies need to safeguard their businesses.”

Posted on: 15/06/2017 UTC+08:00


News

Union Medical Healthcare, the largest aesthetic medical service provider in Hong Kong, has said that it intends to change the use of the proceeds of its IPO.
Hong Kong-listed Hua Han Health Industry Holdings says that it is on course for the examination into the negative reports from Emerson Analytics last year to be completed by Grant Thornton by the end of the third quarter.
Hang Seng-listed China Medical & HealthCare Group expects to record a significant decrease in the loss attributable to the shareholders of the company for the year ended 30 June.
Beijing-based Symbow Medical, which develops surgical navigation devices, has raised Rmb120 million (US$17.8 million) Series A funding led by Huayi Capital. National Emerging Industry Guidance Fund, Shandong Buchang Pharmaceuticals, and Sangel Capital all participated.
International Healthway Corporation (IHC), a Singapore-listed integrated healthcare services and facilities provider, has warned that it expects to post a loss for the first and second quarters of the year. “The loss is mainly attributable to operating loss for 1Q2017 and impairment of certain receivables for 2Q2017, respectively,” the company said in a statement.
Medical glove manufacturer Careplus Group plans to raise M$18.9 million (US$4.4 million) via a private placement of shares. The group plans to sell 48.3 million shares at an indicative price of R$0.39 per share. RHB Investment Bank is managing the deal.
Private investment firm TE Asia Healthcare Partners and the Mother Teresa of Calcutta Medical Centre (MTCMC) in Pampanga have agreed to establish a Ps500 million (US$9.9 million) cancer treatment and management centre. The hospital is owned and operated by Silvermed Corporation.
Medical centre operator Primary Health Care has confirmed guidance for the year at the lower end of its guidance with expected net profits of A$92 million (US$73 million). It also flagged up a write down of A$575 million against its medical centres as the division has been underperforming.



Analysis

In what is starting to resemble a comedy of errors, Wenzhou Kangning Hospital, the largest private psychiatric specialty care service provider in China, is having to start work yet again for its A-share offering.
Singapore-based private equity firm Quadria Capital is expanding its holdings in the region with investments into Vietnam and Singapore from its third investment vehicle, Quadria Capital Fund. Financial details were not disclosed for either transaction.
Mental health is a growing issue for expats; workers and their employers, as well as those relocating independently, according to a recent research study by Aetna International. Expatriate mental health: breaking the silence and ending the stigma, calls for businesses and individuals to take more pre-emptive action to combat the problem, to ensure expats have the vital support they need when relocating or working away from their home country.
A new programme, launched by the Chinese Stroke Association (CSA) and the American Stroke Association (ASA) is aiming to improve the treatment for, and prevention of, cardiovascular and stroke events by helping hospitals and providers consistently adhere to the latest scientific treatment guidelines.
Brisbane-based Oventus has had a good week. First and foremost the sleep disorder device manufacturer has just completed the first tranche of capital raising. It has raised A$6.5 million (US$4.9 million) in a placement of shares at A$0.36 per share. A second tranche to raise A$0.5 million will follow subject to shareholder approval. Bell Potter is managing the deal.
A new report from QBE Insurance, Australia's largest global insurer, reveals that 22% of healthcare companies in Hong Kong have suffered from legal and regulatory compliance issues over the past 12 months. The Risks of Regret report looks at both current and future business challenges and opportunities, and how well-prepared companies are to deal with risks.
“The Asia-Pacific region presents lucrative opportunities for multinational pharmaceutical firms that treat diabetes,” says BMI Research in Singapore in a new report on healthcare in Asia. Fuelled by rapid urbanisation, nutrition transition and increasingly sedentary lifestyles, the epidemic has grown in parallel with the worldwide rise in obesity. Asia’s large population and rapid economic development have made it an epicentre of the epidemic, with India and China the key hotspots in the region, it explains.
Susann Roth, senior social development specialist, Asian Development Bank, explains why the ADB is committed to doubling health sector investments by 2020.


AON

HealthInvestor Asia Summit

Podcasts

Hedge Fund Focus

HealthInvestor Asia twitter feed
HIA Indices