Blue Cross APAC earnings remain ‘marginal’ thanks to integration

The company continues to benefit from both explicit and implicit support from AIA. 

Blue Cross (Asia-Pacific) is predicted to struggle with uplifting earnings for 2023 due to elevated operating expenses resulting from its integration with AIA. On a positive note, the company continues to generate profitable and stable investment income from its fixed-income-focused investment portfolio, AM Best reported.

Overall, AM Best rates Blue Cross's operating performance as adequate.

In 2022, Blue Cross faced a challenging operating environment, with a significant one-off loss from discontinued operations and unfavourable investment results negatively impacting its operating results. 

Looking ahead, the company aims to achieve substantial growth in premium revenue at rates exceeding industry averages in the short to intermediate term. 

The majority of Blue Cross's underwriting portfolio is concentrated in individual and group medical insurance. 

The company continues to benefit from both explicit and implicit support from AIA. 

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In 2022, the company ranked as the sixth-largest provider of accident and health products in terms of direct premiums written. 

Blue Cross employs a multi-channel distribution strategy, including direct sales, AIA's agency force, a bancassurance partnership with The Bank of East Asia, Limited, and external producers such as agents and brokers.

Leveraging its well-established presence, particularly in the medical insurance segment, Blue Cross is expected to play a strategic role in AIA's integrated health strategy. The company continues to benefit from both explicit and implicit support from AIA. 

Beyond capital support, AIA's industry expertise and experience offer Blue Cross access to best practices, talent, and technologies to enhance its operations. AIA's robust agency force and extensive network of distribution partners also position Blue Cross to expand its customer base and market reach.