demographic outlook for health insurance in australia in the 2010s
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AHIA 2011 Conference presentation by Bernard Salt on the Demographic Outlook for Health Insurance in Australia in the 2010sTRANSCRIPT
AHIA
Demographic Outlook for Health Insurance in Australia in the 2010s
Bernard Salt
10 November 2011
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Disclaimer
These slides are not for commercial use or redistribution. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. KPMG have indicated within this presentation the sources of the information provided. KPMG has not sought to independently verify those sources unless otherwise noted within the presentation. No reliance should be placed on additional oral remarks provided during the presentation, unless these are confirmed in writing by KPMG. KPMG is under no obligation in any circumstance to update this presentation, in either oral or written form, for events occurring after the presentation has been issued in final form. The findings in this presentation have been formed on the above basis. Forecasts are based on a number of assumptions and estimates and are subject to contingencies and uncertainties. Forecasts should not be regarded as a representation or warranty by or on behalf of KPMG or any other person that such forecasts will be met. Forecasts constitute judgment and are subject to change without notice, as are statements about market trends, which are based on current market conditions. Neither KPMG nor any member or employee of KPMG undertakes responsibility arising in any way from reliance placed by a third party on this presentation. Any reliance placed is that party’s sole responsibility. The presentation (and the accompanying slide pack) is provided solely for the benefit of the conference attendees and is not to be copied, quoted or referred to in whole or in part without KPMG’s prior written consent. KPMG accepts no responsibility to anyone other than the conference attendees for the information contained in this presentation.
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Australians are on the move … to the coast
Losers Winners
Areas of high population growth (>2% pa) and loss (<-1% pa) between 1986 and 2010
Gladstone
Hervey Bay Sunshine Coast Gold Coast
Coffs Harbour Port Macquarie
Port Stephens
Narooma
Surf Coast Sorell
Victor Harbor
Augusta- Margaret River
Broome
Mackay
Cairns-Port Douglas
Bundaberg
Byron Bay
Denmark
Source: Based on Australian Bureau of Statistics data; KPMG
TOWNSVILLE
DARWIN
PERTH
FIFO WEST FIFO EAST
FIFO CENTRAL
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Growing Extra 2010 1. India 245,000 341,000 2. China 232,000 380,000 3. New Zealand 175,000 544,000 4. South Africa 75,000 156,000 5. Philippines 67,000 177,000
Contracting Loss 2010 1. Italy -26,000 216,000 2. Greece -7,000 127,000 3. Poland -7,000 58,000 4. Malta -4,000 49,000 5. Netherlands -3,000 89,000
• Most growth and loss by place of birth in Australia, 2000 - 2010
Australia is shifting from Mediterranean to Asian influences
Source: Based on Australian Bureau of Statistics data; KPMG
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Other tribes on the rise …
• Facebook …
• PUMCINS ….
• NETTELs …
• KIPPERS …
• LOMBARDs …
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Anticipate demand around changes in the Australian demographic profile
• Net change in Australian population by 5-year age group over 10 years to 2010 and 10 years to 2020
Source: Based on Australian Bureau of Statistics data; KPMG
2000-10 2010-20
Mature adults • Top hospital cover • Knee replacements • Weight loss Young adults
• Singles/couples health cover • Obstetrics • Sports injuries
Retirees • Retirees health cover • Heart conditions • Chronic disease
Kids & teenagers • Family health cover • Child healthcare
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
0 - 4 5 - 9 10 - 14 15 - 19 20 - 24 25 - 29 30 - 34 35 - 39 40 - 44 45 - 49 50 - 54 55 - 59 60 - 64 65 - 69 70 - 74 75 - 79 80+
2000-2010: 3.2 million or 19m – 22m 2010-2020: 3.3 million or 22m – 25m
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
0 90 10 20 30 40 50 60 70 80
Increasing life expectancy is creating new stages of the lifecycle and new markets for health insurance
Child Adolescence Lifestyle Old Retired 2011 82
Adult
Child Teen Old Adult 1971 71
Child Adult Old 1931 63
• Change in life expectancy over 80 years in Australia
Source: Based on Australian Bureau of Statistics data; KPMG
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Who is … what is … Generation Y?
Born 1976-1991
Raised in prosperity
Single kids
Unfazed
by
authority
Culture of volunteering
Disappointed
generation
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
40 20 60 80 Development Peak Income Lifestyle Departure Dependence
Health insurance peaks in the 3rd quarter of life
• Average annual income per income-earner by single year in 2006
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95
Source: Based on Australian Bureau of Statistics data; KPMG
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Boomer and pre-boomer households spend most on medical insurance in Australia
• Average weekly spend on health insurances in Australia, 2009 - 2010
$0
$5
$10
$15
$20
$25
$30
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
15-1
9
80+
Average w
eekly household expenditure (A
mbulance)
Ave
rage
wee
kly
hous
ehol
d ex
pend
iture
(Hos
pita
l, m
edic
al, d
enta
l & S
ickn
ess,
per
sona
l acc
iden
t)
Hospital, medical & dental Sickness & personal accident Ambulance (separate insurance)
20-2
1
22-2
3
24-2
5
26-2
7
28-2
9
30-3
1
32-3
3
34-3
5
36-3
7
38-3
9
40-4
1
42-4
3
44-4
5
46-4
7
48-4
9
50-5
1
52-5
3
54-5
5
56-5
7
58-5
9
60-6
1
62-6
3
64-6
5
66-6
7
68-6
9
70-7
1
72-7
3
74-7
5
76-7
7
78-7
9
Source: Based on Australian Bureau of Statistics Household Expenditure Survey data; KPMG
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Australia is moving from baby boom to baby bust … we need either more tax or more tax payers
• Net growth in working age population (15-64) over 100 years in Australia based on 2008 outlook with different annual migration assumptions
1950 2050 2000
Source: Based on Australian Bureau of Statistics data; KPMG
- 100,000
- 50,000
0
50,000
100,000
150,000
200,000
250,000
300,000
350,000
1972 1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 2023 2026 2029 2032 2035 2038 2041 2044 2047 2050 2053 2056
ERP Proj - 0k NOM Proj - 70k NOM Proj - 180k NOM Dwelling Commencements (public and private)
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
There has been a structural shift in the Australian economy … less low-skilled work … more highly-skilled work
• Net change in total jobs in Australia over two successive three-year periods, August 2005 – August 2011
Source: Based on Australian Bureau of Statistics data; KPMG
2005-2008 2008-2011
3 years Aug 2011 – up 501k (10.8m – 11.3m) Health
Less skills
Professionals
More skills
- 110,000
- 90,000
- 70,000
- 50,000
- 30,000
- 10,000
10,000
30,000
50,000
70,000
90,000
110,000
130,000
150,000
170,000
190,000
210,000
Manufacturing
Transport, Retail, Other, Wholesale
Construction, Education
3 years Aug 2008 – up 853k (10.0m – 10.8m)
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Baby boomers will re-engineer retirement in the coming decade … beware the rise of the grumpy retiree!
• Net growth in population (65+) over 100 years in Australia
130,000
1950 2050 2000
Pop
ulat
ion
grow
th
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
110,000
120,000
130,000
140,000
150,000
1950 1954 1958 1962 196 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2030 2034 2038 2042 2046 2050
Source: Based on Australian Bureau of Statistics data; KPMG
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Australia will benefit from rise of “The Dubai Effect”
New York Shanghai
Singapore
London
Hong Kong
Moscow
Dubai
Sydney
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
The GFC has prompted the rise of the ‘moral consumer’
Then 1997 - 2008
• Era of high consumerism … and of ‘corporate high-flyers’
• ‘Live for the moment’ … pay in the future
• Plasma TVs, McMansions, Manolo Blahnik shoes
• Easy credit … rising house prices
• Celebration of the individual … confidence in the future and in ourselves
Recession
Consumers driven by “Aspirationalism”
• Rise of the moral consumer … the new Wowserism … seeks value on internet
• Anti-drinking, smoking, speeding, gambling, junk-food (obesity) … concern about corporate excess
• Rise of Green, ethical & traditional values … celebrities
• Fear drives a retreat to the security of the herd, the tribe, the family, familiar brands?
Now 2009+
Consumers driven by a “New Morality”
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
• Percentage difference in the number of men and women in Australia and New Zealand by individual year in 2006
-15%
-10%
-5%
0%
5%
10%
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30 32 34 36 38 40 42 44 46 48 50 52 54 56 58 60 62 64 66 68 70 72 74
Australia New Zealand
35
Man Drought
Boy Town
Widow World
27
35
58 65 Man Mountain M
ore
men
M
ore
wom
en
Source: Based on Australian Bureau of Statistics data; Statistics New Zealand data; KPMG
The Great Australasian Man Drought … Stage 3A restrictions now apply
The Great Australasian Man Drought … Stage 3A restrictions now apply
© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. The KPMG name, logo and "cutting through complexity" are registered trademarks or trademarks of KPMG International Cooperative ("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
Contact
Bernard Salt KPMG Australia +61 3 9288 5047 [email protected] www.bernardsalt.com.au twitter.com/bernardsalt linkedin.com/in/bernardsalt facebook.com/BernardSaltDemographer