Nadia Suttikulpanich is the Head of the Fuchsia Innovation Center at Muang Thai Life Assurance, a life and health insurance company operating in Thailand, Vietnam, Cambodia, and Laos. She leads a vibrant team focused on both technological and non-technological improvements to help the company stay competitive in a rapidly changing market.

Nadia is passionate about advancing the company’s health strategy, making health insurance and services more sustainable and effective. With 74 years of history behind the company, she collaborates with various teams to discover innovative opportunities and enhance operations.

In addition, she oversees Fuchsia Venture Capital, which invests in tech startups in the insurtech and health tech sectors. 

Let’s talk about protection gaps and why they are getting wider in some Southeast Asian countries.

There’s a big difference between Southeast Asia, North Asia, and China, which stands apart on its own. Then you have countries like India and others in South Asia. Even within Southeast Asia, markets vary greatly. For example, if you compare Thailand and Singapore—two neighboring countries—they’re vastly different in terms of healthcare systems.

In Thailand, for example, we have three main public health insurance schemes. The first is universal healthcare, funded by taxpayers, which covers the majority of Thai citizens. The second is the social security scheme, contributed by the employed population through payroll deductions, and managed by the Social Security Office (SSO). Lastly, there’s the civil servant scheme, covering government employees and their families. These three programs provide extensive healthcare coverage with little to no copayments, particularly universal healthcare, which offers some of the best coverage. As a result, out-of-pocket healthcare costs in Thailand appear relatively low on paper.

Singapore and Thailand have contrasting healthcare systems. Singapore ties subsidized healthcare to personal contributions, while Thailand lacks copayments. This difference significantly impacts the private insurance market. In Singapore, private insurance is widely adopted due to copayments and deductibles. 

In Thailand, private insurance is less prevalent due to the lack of personal financial burden. Countries like Japan and South Korea have nearly universal private health insurance due to compulsory participation in government schemes. Understanding these foundational differences is crucial when analyzing the private insurance market in Asia.

It’s a complicated environment financially speaking. But what about the quality of healthcare benefits in Thailand?

It can feel like a mirage—the government promises a wide range of benefits to the population, but the reality of accessing those benefits is often quite different. Long wait times are common, and the quality of service depends heavily on which hospital you’re registered with. University hospitals in Bangkok and major provincial hospitals around the country generally offer good care. The doctors are experienced, and the facilities often have the necessary infrastructure, equipment, and technological advancements. However, the queues are overwhelming, and it can take a long time to actually receive care. Some facilities are overbooked and overcrowded, which adds to the delays.

For people who experience this for the first time, especially if they’ve never been seriously ill before, the long wait times and overburdened systems can be discouraging. It’s often at that point that they consider getting private health insurance, allowing them access to private healthcare facilities where the experience is typically faster and more comfortable.

In Thailand, the wealth gap significantly impacts the penetration of private health insurance. High premiums and the cost of healthcare often exclude many people from using private facilities. This small risk pool makes it difficult for insurers to offer affordable premiums. This vicious cycle, where the cost of care exceeds insurance premiums, hinders the growth of the private health insurance market.

What factors are leading to the protection gaps widening right now? And are they surmountable? 

As the population develops and economic factors contribute to GDP growth, logically, the gap should be narrowing. However, we are facing a “double whammy” of an aging population and a challenging global economic outlook. Recently, we’ve seen signs of recession in many parts of the world, coupled with inflation. Even though global conflicts may not directly affect us, they still have some impact. All of these factors are widening the gap, in my opinion.

In Thailand, around 14-15% of the population is aged 60 or older, which is a significant marker of an aging society. By 2029, this percentage is expected to reach 20%, transitioning us into a “super-aged” society. While this puts us behind Japan and Korea in terms of aging population percentages, the economic readiness of Thailand is not on par with these countries. This gap between our aging population and economic preparedness is a key issue.

Additionally, Thailand’s universal healthcare and social security systems are under strain. The contributions to social security, for instance, have remained unchanged for over a decade. I have personally contributed the same amount to social security since I started working, and the rate has not increased. Meanwhile, medical inflation is already at around 12%, so it’s hard to see how the current system can sustain itself as the population ages. This mismatch between growing medical costs and stagnant contributions is another factor driving the widening gap.

That sounds like a disaster waiting to happen. What action can insurers, health providers and the government take to redress the situation?

It is very concerning. What is likely to happen is that either social security contributions will need to increase, taxes will have to rise—which is never a popular choice for the government—or benefits will need to be reduced. If benefits are cut, healthcare providers will need to find subsidies elsewhere, which would likely fall on the patients themselves.

If there are no copayments built into the insurance scheme, people won’t be able to combine their population rights with their personal health insurance. What we’re seeing already is that people are being forced to buy personal health insurance from the first dollar, meaning the private insurance companies are underwriting the full risk from the start.

In other countries, like Singapore, they’ve introduced a multiple-payer system. The government offers an initial subsidy, individuals contribute either out-of-pocket or through top-up insurance, and the private insurers cover the remaining costs. This layered approach lowers the burden on both the individual and the private health insurers by spreading the financial responsibility. Unfortunately, this kind of system doesn’t exist in Thailand, meaning private insurers bear the full cost from the first dollar, which keeps private insurance premiums high and limits affordability.

How would you develop strategies to encourage the Thai population to adopt private insurance options? Also, how can we reconcile the cost of private health insurance with these platforms to create a system similar to Singapore’s?

This is a really important and complex issue. One of the biggest challenges we face is the lack of public understanding and awareness about insurance and how it works. There’s a saying in Thailand, “You don’t shed tears until you see the coffin,” which means people don’t think about future risks until they’re faced with them. This is a fundamental issue when it comes to insurance because people often think, “I’m young, I’m healthy, I don’t need to worry about sickness right now.”

However, the reality of insurance is that you need to buy it when you’re healthy, because once you develop a serious condition, it’s either considered a pre-existing condition that won’t be covered, or you might not be eligible for coverage at all. For example, right now, if you have diabetes, you can’t get health insurance because of the high risk of complications. So, there’s an urgent need to educate the public about the importance of health insurance and why it’s crucial to plan for the future, rather than relying solely on the assumption that public healthcare will always be available and of the same quality in the coming years.

Another key issue is affordability. Currently, health insurance is seen as a product for the middle and upper classes. To make it more affordable, we may need to introduce features like copayments or deductibles. Right now, insurance companies compete by offering more comprehensive coverage with added perks, but this isn’t sustainable. We need to strike a balance between necessity and luxury in healthcare.

What could help to alleviate this at a grassroots level? 

In places like the UK, you have to see a general practitioner (GP) first before being referred to a specialist, which helps control costs. But in Thailand, especially with private insurance, people can go straight to a specialist without needing a GP referral, which drives up costs significantly. Some private hospitals even advertise themselves as specialist-only facilities, skipping general medicine entirely. This is something people need to be more aware of—how their healthcare choices and behaviours impact overall costs.

Ultimately, we need to rethink how we consume healthcare and understand that expecting insurers to cover every single expense without any cost-sharing will only make private health insurance more expensive and less accessible. I remember seeing a TikTok video that perfectly illustrated this issue. A woman who had been admitted to a hospital for a minor issue like diarrhoea took a video of her room, which looked more like a luxury hotel suite, complete with a living room, study, and intricately carved fruit decorations. It’s examples like these that show how the demand for “luxury” healthcare can drive up costs and make insurance less affordable for the average person.

How are high-tech digital Insurtechs addressing the significant wealth gap in Thailand? Are they making a positive impact, or are they falling short?

The current direction of the market is focused on improving care delivery to address minor or simple health issues, like stomach pain or hay fever, that don’t always require specialist visits. Innovations such as telemedicine and telepharmacy are becoming increasingly important in this context. In our discussions within the industry, we’ve emphasised the integration of claims services with these digital healthcare solutions.

Our goal is to replicate the hospital experience for customers in a digital format. For instance, in Thailand, some private insurance plans, especially those provided by employers, offer a cashless claims system. This allows employees to visit hospitals without any upfront payments, as the insurance company settles the costs directly. On average, employees might see a specialist around three times a year for outpatient visits, and this cashless experience greatly enhances convenience.

As we consider transitioning these hospital visits to telemedicine or telepharmacy consultations, it’s essential to maintain that same cashless experience. We’re working on integrating APIs with our hospital partners and digital health platforms to enable customers to check their coverage, complete KYC processes, and settle claims seamlessly.

What stumbling blocks are you having to overcome? 

While many Asian markets are exploring similar approaches when it comes to digital offerings, the challenge lies in adoption. People are accustomed to visiting their doctors in person, and the quality of private hospitals in Thailand, which often resemble five-star hotels, contributes to this preference. To facilitate this transition, we need a comprehensive market development program to educate consumers about the benefits of digital healthcare solutions.

Ultimately, there’s a tipping point we’re approaching. As healthcare costs continue to rise, people may begin to question the necessity of luxury hospital amenities, such as grand pianos in waiting rooms. This realization will drive demand for more accessible and cost-effective healthcare options, which is why it’s crucial to gradually build public understanding of these shifts.

To what extent is health tourism widening the gap between essential and luxury healthcare for citizens?

It’s true that healthcare can be perceived as expensive in Thailand, particularly for those earning a local salary. However, when viewed from the perspective of someone coming from the U.S., the Middle East, or even Singapore, many find it relatively affordable. This discrepancy highlights a significant gap in perceptions of healthcare costs.

Finding a balance is crucial. While it’s a business, and I’m not suggesting that the quality of care is poor, many private hospitals in Thailand offer excellent services. We have highly skilled doctors and state-of-the-art equipment, and when we compare our prices to those in the U.S., they are incredibly reasonable. I often wonder how U.S. citizens manage their healthcare expenses, as I hear stories of families facing bankruptcy due to medical bills. That’s an unacceptable situation, and we certainly don’t want to see that happen in Thailand.

Addressing the wealth gap is essential to ensure that no one is deprived of necessary care. While we strive to maintain high-quality healthcare, we must also ensure that it remains accessible to everyone, regardless of their financial situation.

How can Thailand create a balanced healthcare system that supports health tourism while offering broader private insurance options for citizens? 

It is crucial for Thailand to drive both economic development through health tourism and sustainability of care for the its’ citizens. Success in both areas rely on three factors; quality of care, accessibility, and continuous improvement, particularly in proven medical technology. I think the government as well as the industries, both healthcare and insurance recognize this importance and each stakeholder must collaborate to create a more holistic framework. Public education is also vital to promote appropriate care practices and behaviours, helping to manage resources effectively while enhancing quality and accessibility.  

For instance, the government facilitates this through policies such as multi-payer insurance schemes, copayment options, healthcare pricing transparency and well defined care pathways. Healthcare providers also contribute by developing care facilities and pathways that differentiate between primary care for simple disease and specialist tertiary care, as well as by training medical professionals and leveraging digital health technologies. Meanwhile, insurers can develop more diverse insurance plans and benefits that align with sustainable policies and practices.

Is the trend of companies in Thailand increasingly offering private medical insurance as part of their employee benefits package similar to what we’re seeing in the UK?

Yes, medical coverage is a crucial component in employee benefits schemes.  Typical group insurance plans often include annual limits or per-visit caps, which restrict coverage to a specific number of visits each year. Currently, most employee health benefits lack flexibility, meaning that if employees don’t use their benefits within the year, they are forfeited. This often leads to nearly 100% utilisation, particularly for outpatient services, making group insurance one of the more challenging segments to manage in terms of pricing, which directly affects employers.

As a result, there’s a growing trend towards flexible benefit schemes that allow employees to flex-down health benefits and convert into cash or points for other uses, including purchasing personal insurance. Both employers and insurers are also emphasising health prevention strategies to promote employee wellness and reduce the risk of chronic diseases.

Are life insurers effectively reaching out to these small businesses, which are essential to the economy? What can be done to foster trust and encourage engagement in this demographic?

Absolutely, focusing on SMEs (Small and medium-sized Enterprises) is a strategic move. Historically, group insurance has catered primarily to medium to large businesses, often with a minimum of 50 to several thousand employees. However, recognising the needs of very small businesses is essential, especially since even a group of three people qualifies as a group for insurance purposes. This inclusivity ensures that no small business is overlooked.

Access to products is as crucial as the products themselves. Larger businesses typically have brokers and dedicated service teams to navigate their insurance needs, but smaller companies don’t have that luxury. This is where digital solutions come into play. By leveraging technology, we can keep costs down and eliminate the need for middlemen, which often add hidden fees through commissions.

We aim to provide self-service options for small businesses and individuals. If they encounter challenges, support through call centres and video conferencing is available, facilitating the application process without unnecessary delays or costs.

In terms of individual insurance, even though health and life insurance can be complex compared to simpler products like travel insurance, we’re witnessing significant growth through digital channels. Our approach combines fully digital processes with face-to-face interactions. This hybrid model allows our agents to assist customers in real time, making the application process smoother and more efficient. It’s not about replacing human interaction but enhancing it through technology. This way, we can provide a more personalised experience while maintaining efficiency.

What are the key strategies insurance companies in Thailand can implement to better serve underserved populations? 

As insurers, we must recognise the care gap and anticipate potential threats the market may face. It’s essential to strike a balance between meeting current needs and preparing for future challenges. In health insurance, this means differentiating between necessary care and luxury services. By focusing on necessities, we can make our products more affordable while ensuring their sustainability.

We can’t shy away from implementing copayments. In markets like Singapore or Taiwan, this concept is well understood, but here, people often expect to pay a fixed premium and have everything covered. The reality is that claim ratios can be three to four times the premium amount, which isn’t sustainable. Health insurance should be viewed as a lifelong commitment. Although policies are renewed annually, we need to maintain a fund that can be accessed during challenging times.

Balancing pricing and benefits is crucial for sustainability. At the same time, we need to prioritise communication, education, and consumer awareness regarding the impact of medical inflation and the appropriateness of care. Right now, while we say that going to a specialist is an option and insurance must pay from the first dollar we must ask ourselves: is it truly necessary in every case? These are challenging questions, but they are critical for the future of health insurance.

Join Leaders from Maung Thai Life Assurance in Hong Kong at Insurtech Insights Asia 2024

Nadia Suttikulpanich, Head of Fuchsia Innovation Center for Maung Thai Life Assurance will be speaking on two expert panels at Insurtech Insights Asia 2024 in Hong Kong on December 4th and 5th at The Kerry Hotel. These are: Beyond Financial Protection: The Role of Health Insurance in Wellness Innovation and From Data to Design: Leveraging Claims Insights for Insurance Innovation and Growth.