Medicalinflation in Singapore is expected to remain at 10 percent outpacing generalinflation of 1 percent.

SINGAPORE - Media OutReach - 14 November 2018 - Medical plan costs paidby employers around the world are set to rise nearly 8 percent in 2019, faroutpacing average general inflation of nearly 3 percent, according to the 2019Global Medical Trend Rates Report released by Aon plc (NYSE: AON), the leading global professionalservices firm providing a broad range of risk, retirement and health solutions.Theexpected average increase before plan changes in medical and pharmacy cost foremployer-sponsored medical plans in 2019 of 7.8 percent is slightly lower thanthe 8.4 percent in 2018 due to employer cost containment measures, tighterprocurement of medical goods, new health improvement initiatives and lowerrates of projected inflation worldwide.

Tim Dwyer, CEO, Health Solutions, Asia Pacific, Aon.

Medical trend rate in Asia Pacific will decrease from 8.9percent in 2018 to 8.6 percent in 2019. This rate is higher in Singapore at 10percent and is expected to remain the same in 2019 -- despite a lower projectedgeneral inflation of just 1 percent. On the other hand, medical inflation inHong Kong is expected to rise from 6.2 percent in 2018 to 8.3 percent in 2019.

In China, medical trend rate will increase from 5.5 percentin 2018 to 6 percent in 2019. The Chinese government's regulation to limit thenumber of intermediaries in the distribution of pharmaceutical and medicalproducts to two is expected to temper medical inflation in future. Medicaltrend rate in India is at 9 percent and is expected to remain the same in 2019.Insurers there are now required to set premium rates based on portfolio claim experienceand avoid artificially low fees for competitive advantage.

In Singapore, cancer and cardiovascular issues are the topmedical conditions driving up medical plan costs -- while increasing levels ofstress and respiratory infections are core contributors to rising costs in HongKong. To minimise these costs, organisations continue to introduce designmeasures such as co-payment, dollar limits in plan, limiting certain benefits,and referring employees to cost-effective providers.

Tim Dwyer, CEO, Health Solutions, Asia Pacific, Aon said, "Byfocusing only on cost containment, companies are treating the symptoms insteadof the underlying causes in relation to the health of their employees. Againstthe backdrop of an ageing workforce and increasing prevalence of sedentarylifestyles, the time is right for employers across Asia to develop sustainablewellbeing programmes. This will increase employee engagement, lead to ahealthier and more productive workforce and, ultimately, improve businessperformance."

Projected medicaltrend rates vary significantly by region. Countries in the Middle East/Africaand Latin America regions will experience the highest average medical premiumrates of any region at 13.7 percent and 13.2 percent respectively. In contrast,Europe and North America are projected to see average medical premium rateincreases in the single digits, with Europe seeing the lowest rate of increaseat 5.1 percent.

"While the 2019 medicaltrend rates are at their lowest compared to prior years, these are stillextremely high. We expect continued cost escalation due to global population ageing,poor lifestyle habits in emerging countries, cost shifting from social healthcare programmes and the increased prevalence and utilisation ofemployer-sponsored health plans in many countries," said Wil Gaitan, seniorvice president and global consulting actuary at Aon.

Poor Health HabitsPrimary Driver of Cost Increases

Aon'sreport confirmed the increasing impact of non-communicable diseases on healthcare costs worldwide. Cancer and cardiovascular ailments, such as high bloodpressure, diabetes and respiratory conditions, were the most prevalent healthconditions driving health care claims around the world. Aon's report alsoconfirms the growing prevalence of risks from unhealthy personal habits aroundthe world, such as high blood pressure, high cholesterol, physical inactivity,bad nutrition, and obesity.

"Manyof the global risk factors often lead to chronic conditions with long medicalcost tails that make them expensive to treat and result in long term medicalcost increases," noted Tim Nimmer, chief health care actuary at Aon.

Methodology

Aon'sreport reflects the medical trendexpectations of employer-sponsored medical plans in 103 countries based onreported data from Aon professionals, clients and carriers represented in theportfolio of Aon medical plan business in each country. 

About Aon

Aon plc (NYSE:AON) Aon is aleading global professional services firm providing a broad range of risk,retirement and health solutions. Our 50,000 colleagues in 120 countriesempower results for clients by using proprietary data and analytics to deliverinsights that reduce volatility and improve performance. Aon has five specific global solutionlines: Commercial Risk Solutions, Reinsurance Solutions, Retirement Solutions,Health Solutions and Data & Analytic Services.

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