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 2010s

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Demographic Outlook for Health Insurance in Australia in the 2010s

  1. 1. AHIA Demographic Outlook for HealthInsurance in Australia in the 2010s Bernard Salt 10 November 2011
  2. 2. 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 KPMGInternational 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.
  3. 3. Australians are on the move … to the coastAreas of highpopulation growth(>2% pa) and loss DARWIN(<-1% pa) between1986 and 2010 Cairns-Port Douglas Broome TOWNSVILLE Mackay FIFO WEST Gladstone FIFO EAST Bundaberg Hervey Bay Sunshine Coast FIFO Gold Coast Byron Bay CENTRAL Coffs Harbour PERTH Port Macquarie Port Stephens Augusta- Narooma Margaret Denmark River Victor Harbor Winners© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG Surf CoastInternational 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 Sorell Losers("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation. Source: Based on Australian Bureau of Statistics data; KPMG
  4. 4. Australia is shifting from Mediterranean to Asian influences 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© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Source: Based on Australian Bureau of Statistics data; KPMGThe 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.
  5. 5. 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 KPMGInternational 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.
  6. 6. Anticipate demand around changes in the Australian demographic profile 2000-2010: 3.2 million or 19m – 22m 2010-2020: 3.3 million or 22m – 25m Retirees Mature adults • Retirees health cover • Top hospital cover • Heart conditions450,000 • Knee replacements • Chronic disease Young adults • Weight loss400,000 • Singles/couples health cover350,000 • Obstetrics • Sports injuries300,000 Kids & teenagers250,000 • Family health cover • Child healthcare200,000150,000100,000 50,000 0 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+ 2000-10 2010-20 • Net change in Australian population by 5-year age group over 10 years to 2010 and 10 years to 2020© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Source: Based on Australian Bureau of Statistics data; KPMGThe 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.
  7. 7. Increasing life expectancy is creating new stages of the lifecycle and new markets for health insurance Child Adolescence Adult Lifestyle Retired Old 2011 82 Child Teen Adult Old 1971 71 Child Adult Old 1931 63 0 10 20 30 40 50 60 70 80 90 • Change in life expectancy over 80 years in Australia© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Source: Based on Australian Bureau of Statistics data; KPMGThe 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.
  8. 8. Who is … what is … Generation Y? Raised in prosperity Born 1976-1991 Single kids Unfazed Disappointed Culture of volunteering by authority generation© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational 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.
  9. 9. Health insurance peaks in the 3rd quarter of life 20 40 60 80 Dependence Development Peak Income Lifestyle Departure 45,000 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 - 0 5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 • Average annual income per income-earner by single year in 2006© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational 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. Source: Based on Australian Bureau of Statistics data; KPMG
  10. 10. Boomer and pre-boomer households spend most on medical insurance in Australia $1,800 $30 $1,600 (Hospital, medical, dental & Sickness, personal accident) $25 $1,400Average weekly household expenditure Average weekly household expenditure $1,200 $20 (Ambulance) $1,000 $15 $800 $600 $10 $400 $5 $200 $0 $0 15-19 20-21 22-23 24-25 26-27 28-29 30-31 32-33 34-35 36-37 38-39 40-41 42-43 44-45 46-47 48-49 50-51 52-53 54-55 56-57 58-59 60-61 62-63 64-65 66-67 68-69 70-71 72-73 74-75 76-77 78-79 80+ Sickness & personal accident Ambulance (separate insurance) Hospital, medical & dental • Average weekly spend on health insurances in Australia, 2009 - 2010 © 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. Source: Based on Australian Bureau of Statistics Household Expenditure Survey data; KPMG 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.
  11. 11. Australia is moving from baby boom to baby bust … we need either more tax or more tax payers 1950 2000 2050 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 -50,000 -100,000 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) • Net growth in working age population (15-64) over 100 years in Australia based on 2008 outlook with different annual migration assumptions© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational 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 Source: Based on Australian Bureau of Statistics data; KPMG("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
  12. 12. There has been a structural shift in the Australian economy… less low-skilled work … more highly-skilled work Health 3 years Aug 2011 – up 501k (10.8m – 11.3m)210,000 3 years Aug 2008 – up 853k (10.0m – 10.8m)190,000170,000 Construction,150,000 Professionals Education130,000110,000 Transport, Retail, 90,000 Other, Wholesale 70,000 Manufacturing 50,000 30,000 10,000 -10,000 -30,000 -50,000 More skills Less skills -70,000 -90,000-110,000 2005-2008 2008-2011 • Net change in total jobs in Australia over two successive three-year periods, August 2005 – August 2011© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational Cooperative (“KPMG International”), a Swiss entity. All rights reserved. Source: Based on Australian Bureau of Statistics data; KPMGThe 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.
  13. 13. Baby boomers will re-engineer retirement in the coming decade … beware the rise of the grumpy retiree! 1950 2000 2050 150,000 140,000 130,000 130,000 120,000Population growth 110,000 100,000 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - 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 • Net growth in population (65+) over 100 years in Australia © 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. Source: Based on Australian Bureau of Statistics data; KPMG 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.
  14. 14. Australia will benefit from rise of “The Dubai Effect” London Moscow New York Shanghai Dubai Hong Kong Singapore Sydney© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational 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.
  15. 15. The GFC has prompted the rise of the ‘moral consumer’ Then 1997 - 2008 Recession Now 2009+ • Era of high consumerism … and of • Rise of the moral consumer … the new ‘corporate high-flyers’ Wowserism … seeks value on internet • ‘Live for the moment’ … pay in the • Anti-drinking, smoking, speeding, future gambling, junk-food (obesity) … concern about corporate excess • Plasma TVs, McMansions, Manolo Blahnik shoes • Rise of Green, ethical & traditional values … celebrities • Easy credit … rising house prices • Fear drives a retreat to the security of • Celebration of the individual … the herd, the tribe, the family, familiar confidence in the future and in brands? ourselves Consumers driven by Consumers driven by a “Aspirationalism” “New Morality”© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational 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.
  16. 16. The Great Australasian Man Drought … Stage 3A restrictions now apply The Great Australasian Man Drought … Stage 3A restrictions now apply 10%More men Boy Town 5% Man Mountain 27 58 65 0% Man Drought WidowMore women -5% World 35 -10% 35 -15% 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 • Percentage difference in the number of men and women in Australia and New Zealand by individual year in 2006© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational 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 Source: Based on Australian Bureau of Statistics data; Statistics New Zealand data; KPMG("KPMG International"). Liability limited by a scheme approved under Professional Standards Legislation.
  17. 17. Contact Bernard Salt KPMG Australia +61 3 9288 5047 bsalt@kpmg.com.au www.bernardsalt.com.au twitter.com/bernardsalt linkedin.com/in/bernardsalt facebook.com/BernardSaltDemographer© 2011 KPMG, an Australian partnership and a member firm of the KPMG network of independent member firms affiliated with KPMGInternational 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.

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