Target Market Estimation for Cancer Insurance

Introduction

It is the group's assignment to estimate the market potential for cancer insurance, which covers parts of the medical and non-medical expenses of cancer treatment. The group had choose one country, which seems to have the highest and most promising market potential, after in-depth research. Furthermore it is our intention to give the company a competitive advantage in the sale of cancer insurance by additional research, careful selection, and a possible marketing idea. It should be noted that we cannot cover every country in detail, as that would exceed this report.

Prospective countries

Country overview

Argentina China France Australia

Population 40.91 million 1.34 billion 64.06 million 21.26 million

HDI Rank 46 Rank 89 Rank 14 Rank 2

Adult Literacy Rate 97.6% 93.3% 99.0% 99.0 %

Population Age 65+ 10.5 % 7.9 % 16.6% 13.4%

Health Expenditure per year $662.6

(PPP $1,322) $108.5

(PPP $233.3) $4,627.3

(PPP $3709.4) $ 3985.9

(PPP $3260.8)

Private Expenditure on Health (% of GDP) 4.9% 2.4% 2.3% 2.9%

Physicians per 100,000 people 301 142 341 247

Prevalance of smoking (% of adults) 39.8% 28.9% 27% 19%

Decision

Which markets we do not advise to enter (for now)

Argentina:

When looking at Argentina it should be mentioned that the average population is rather young compared to other countries and therefore its population is less exposed to the risk of cancer. Surveys from 2009 conducted by the OECD concerning health expenditure and its financing reveal that younger people spend considerably less on their health and future health care. On the other hand, the percentage on health expenditure of the GDP should not be neglected. However, it is known that the business environment often appears to be affected by unpredictability. Entering an unstable market with a relatively "new" product might not be advisable.

China:

Some of the underlying factors why we thought it was not suitable to locate to China was because of the cultural differences. It would be very difficult to provide such a complex service as the health insurance. It would take very much hard work and research (more so than other countries) into their insurance systems which are likely to be very different than what we are accustomed to. The language barrier would make business very hard to deal with as well. Obviously we took into account the sheer volume of people who live in China which would see any business locating there enjoy a very large market with over 1.3 billion people living there. Even though China has a fairly young population with only 7.9% aged over 65, this still means there is over 100 million over 65's. However, there are reasons why this is not all good news. First of all China has a low number of doctors per 100,000 and therefore a lot of its population may not even see a doctor on a regular basis. There is also the fact that China has a rather low expenditure on health per year in comparison to the other countries. China is a rapidly developing country which might lead to benefits for business locating there, however there are also a number of uncertainties too which see's rather unpredictable future for some sectors. Another reason not to locate to China is because of their lower literacy rate compared to Australia or France, even though 93.3 is still a high figure, especially for an emerging country. One of the main facts to consider is that China has a third of the world's smokers which is a very substantial figure. This illustrates that China has a high cancer rate of smokers just by the sheer volume of them. However, recent news that China has banned all smoking in public places means that in the long term, the rate of cancer from smoking is set to decline; this is one of the many very unpredictable statistics that can occur.

France:

The first impression is that France would be a promising country to sell cancer insurance. France enjoys a high standard of living as well as a high education level and an adult literacy rate of 99 percent, and has a high life expectancy of 81.6 years. Furthermore, France has a high percentage of the population being over 65 years (16.6%) and a high number of physicians per 100,000 people. Almost 30 percent of French adults smoke which makes a high rate of lung cancer more probable.

Although all this seems promising, France is one of the world's best overall health care providers and therefore already provides cancer insurance along with the governmental health insurance to its citizens.

Most advisable country

Australia:

Australia has proved to be most suitable country to target with our cancer insurance.

It is true that there are disadvantages for example that our company does not have extensive knowledge about