Aviva has announced to brokers and agents in Hong Kong that it will be cancelling its Global Lifecare plans, according to a recent post by Michael Lamb at Globalsurance. He quotes a recent company communication stating:
We have decided to discontinue any new business of our Aviva Global Lifecare products with immediate effect and also the renewal of all existing Aviva Global Lifecare policies.
While customers can no longer renew their Lifecare policies, they will continue to be covered until they pass the renewal date. At that point coverage will expire and they will need to seek coverage under another plan.
This is a problem for many customers, Lamb noted, as any medical condition that developed under the Lifecare policy will be treated as pre-existing from now on. Such conditions would unlikely to be covered under any subsequent health insurance plans.
What’s more, he wrote:
As of the time of publishing, Aviva has offered no solutions for continuing coverage to Aviva policyholders currently suffering from severe chronic conditions whose plans will be cancelled. This means that individuals experiencing life threatening medical conditions, such as cancer, are now no longer to obtain coverage from a plan which they have been enrolled on for a number of years.
Additionally, many Aviva policyholders are finding that they have only just completed the waiting periods associated with coverage benefits such as Maternity, and are now being told that their policy is no longer being offered. These individuals must find new coverage and complete a new set of waiting periods before they are able to start their family with the protection they deserve.
One woman, who asked to be identified as Mrs. S for the Globalsurance story, said:
This is insane! My husband and I were going to try to start a family this year… We now have to wait another 10 months on a different policy before we can give birth? How can Aviva do this?
Lamb speculated that Aviva decided to dump the Lifecare plans after they became financially untenable. Premiums have increased sharply over the last 2 years, and average plan costs have doubled over the same period. “This is unusual for health insurance and may indicate a structural unsoundness at the core of the Aviva Lifecare business,” he concluded.
Aviva PLC is a UK-based insurer offering a range of general, health and life insurance products. Unlike many companies with business lines providing expat health insurance, it also handles asset management and pensions. Aviva is a publicly-traded company, and shares have been rising steadily since mid-2010. Bloomberg consensus estimates project Aviva’s earnings to show mild increases in both 2010 and 2011. http://www.aviva.com