HealthInvestor Asia Summit 2018
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

Australian medtech company Medibio has signed a strategic partnership agreement with health technology services company Striiv.
Spanish molecular diagnostics company Genomica has opened its first subsidiary in Wuhan, China. The office, established in the East Lake High Tech Zone, will serve as an operations centre to increase the presence of the it parent, the PharmaMar Group not only in China, but also in other Asian-Pacific countries.
Shanghai-based mobile social platform The CareVoice, which is focused on the insurance industry, has raised US$2 million in its third round of seed funding led by venture capital firms SOSV and Haitao Capital.
Archie Fraser has stepped down as chief executive of Optiscan Imaging, which develops microscopic imaging technologies for medical markets, effective immediately. No reason for his resignation has been given.
Simon Lipscombe has resigned from his position as CEO of New Zealand’s Green Cross Health’s community health division. He has accepted the position of managing director of the New Zealand subsidiary of Compass Group, the world’s leading food and support services company.
Malaysian multinational PRG Holdings is moving into healthcare with the proposed acquisition of O&G focused private medical services provider Roopi Medical Centre for M$18.3 million (US$4.6 million) and a 25% stake in Esther Postpartum for M$3.75 million.
Union Medical Healthcare, the largest aesthetic medical service provider in Hong Kong, has mandated CMB International Capital as sole global coordinator and joint bookrunner with UBS and Haitong International to sell US dollar Reg S bonds.
It should surprise no one that the over-allotment option has been fully exercised by China Merchants Securities for Hong Kong ophthalmic company C-Mer Eye Care Holdings.



Analysis

The healthcare industry in Asia-Pacific is expected to grow at 11.1% in 2018, representing one of the fastest growing regions in the world, as the global healthcare economy averages a 4.8% annual growth rate.
Technologist, business leader, and philanthropist Bill Gates explains why global health needs the private sector.
Mitch Beaumont, Prashanth Prasad, Ulrica Sehlstedt and Mandeep Dhillon from international management consultants Arthur D. Little explain how medical technology companies can manage going digital.
Susann Roth, senior social development specialist, Asian Development Bank, argues why a health impact assessment is essential for hard infrastructure projects.
After a subdued 2017, healthcare mergers & acquisitions are expected to jump more than 80% this year in Asia Pacific to US$55.1 billion, according to global law firm Baker McKenzie.
After the Hong Kong High court found a doctor and a lab technician guilty of manslaughter, Michael Griffiths, regional director of healthcare at specialist insurance brokers Howden, looks at the extent of insurance or indemnity available to doctors in Asia accused of criminal acts.
Susann Roth, senior social development specialist, Asian Development Bank, looks at how Vietnam is building its digital health capacity.
The world’s first healthcare development impact bond aimed at reducing the number of maternal and newborn deaths in Rajasthan, India, launched last week.
my images

Podcasts

Hedge Fund Focus

HealthInvestor Asia twitter feed
HIA Indices