Chairman’s Report
By Armando Baez
Our Man in Shanghai
finally took my own advice about finding self-insurance count the number of insurance companies operating in
I
opportunities in Asia. Last summer I set up shop in China on the fingers of one hand. Now there are over 100.
Shanghai, China, as an outpost of California-based While China has some of the brightest and best-educated
Global Benefits Group. The good news is that I will have a managers found anywhere in the world, most are young and
shorter distance to travel for this month’s SIIA International lack real hands-on experience. China needs insurance
Conference in Singapore. know-how and expertise from our
side of the globe.
I must credit my SIIA experiences –
As companies look to cut
significantly serving as president in Where there were only two or three
2009 – for helping to motivate and
costs and better manage
health care insurance options in
equip me to work in the internation-
their assets and resources,
China five years ago, today there are
al marketplace. I have had the privi- at least 30. Some, such as
lege of meeting many key and influ-
self-financing of insurance
Wellpoint, Cigna, Aetna or my com-
ential members of the global busi-
is one area of opportunity.
pany are foreign owned and man-
ness and self-insurance communi- aged. Others like Medilink and
ties, giving me a unique perspective Giantown are local enterprises.
on developments in Asia and China
in particular. Many state-owned enterprises in China already consider
themselves to be self-insured. That’s easy for us to under-
I have no doubt that self-insurance and alternative risk stand because these organizations are huge, often employ-
management are poised to explode around the world. ing hundreds of thousands. For these, privatization is the
Consider the fact that Singapore, where we will gather key as in development of in-plant clinics. One provider of
shortly, is the ART capital of Asia with more than 50 cap- these has been started: Digimedex.
tive insurance companies now.
Elsewhere, markets of Southeast Asia, Viet Nam, Thailand
It’s important to note that the current financial crisis has and Indonesia are similarly poised for rapid growth, or
helped spur rather than slow this development. As compa- already experiencing it. Businesses are expanding in
nies look to cut costs and better manage their assets and export-related manufacturing. The importance of insurance
resources, self-financing of insurance is one area of oppor- and risk management is paramount and financial manage-
tunity. Since employee benefits and occupational risks con- ment of related programs becomes critical.
sume such a large portion of overhead, even small incre-
mental savings are important. The development of the infrastructure required to support
self-insurance and ART is rapidly progressing. This
As a preview of some of the themes that will be covered in includes TPAs, preferred provider networks, care manage-
depth at the Singapore conference, I’ll offer some impres- ment, Internet-based benefit delivery – well, you get the
sions of Asian opportunities of interest to our members. idea. Many of these are managed by local entrepreneurs,
others by east-west joint ventures.
China is undoubtedly the most important new insurance
market in Asia, if not the world, because of its massive size, Where only a few years ago reinsurance and fronting
population and economic strength. In 2000 you could arrangements were not only hard to find but unregulated,
16 • The Self-Insurer
©
/ January 2010
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