The international private medical insurance (IPMI) market is seeing sweeping changes as the world economy pivots towards Asia and technology evolves, finds Thomas Smith.
Over the past few years, much of the growth in the international private medical insurance (IPMI) market has come from the Far East and Middle East.
The Finnacord Global Expatriates Report from January this year found the number of expats in China grew by 1.2% between 2009 and 2013, and by 2017 this is expected to have increased to 4.2%.
The way this growth is being achieved is increasingly based on individual and small group cover. Other markets such as Russia and mainland China more and more look to be a significant source of growth.
With IPMI having considerable potential for growth in Asia beyond traditional strongholds such as Hong Kong and Singapore, much of the market’s growing activity is based there.
Health insurance as a product is still a new concept to many in China. However, this does not mean there is a lack of potential demand, but rather that the demand doesn’t realise it exists.
In September this year, Aetna International and Starr Companies launched the UltraCare Health Plan to provide IPMI coverage for both Chinese nationals and expats based in China.
Recently, Now Health created a video targeting IPMI at Chinese local national high‑net‑worth clients. Alison Massey, marketing and ecommerce director at Now Health International, explains: “That’s where we’re seeing the really exciting growth in international health insurance, and this is where we think the main growth is going to be. The opportunity is massive, even just looking at the tier-one cities. We’re not even looking at tier two or tier three, but for the tier-two cities it’s really up and coming.”
Technological innovation
The role of technology in IPMI has long been significant, owing to the obvious advantages of now classic technologies such as the internet over postage and paper application forms.
In September, Aviva launched a new app allowing its International Solutions PMI customers to access medical records, emergency assistance and advice, as well as details of how to claim.
In August, meanwhile, Allianz Worldwide Care launched its MyHealth app, allowing members to provide a few key details about their claim, take a photo of their medical invoices and press ‘submit’.
Expat communities are typically major users of technology. In a recent speech, ALC Health director Andrew Apps told brokers that 97% of expats check products they are looking to purchase online before buying, including buying insurance through a broker.
Steve Nelson, product development manager at Medibroker, says: “We’re seeing insurers launching their iPhone apps with customers’ policy details and their medical details potentially on there. It’s these sorts of things that people aren’t crying out for. Without realising it, people do actually demand this information, this technology. We want everything in our pocket.”
Nic Brown, global head of distribution at Aetna international, agrees: “The availability of smartphone technology enables us to provide secure applications for our members to go and find treatment in the first place, looking up the providers who are in networks where you can go for different hospital treatments and help navigate them to that point.”
Apps adds: “We’re seeing a bit of a backlash at the same time where some companies are becoming too technology orientated and expecting their clients to do everything online. People are saying, ‘I want a human interaction, please. I don’t mind having my policy sent to me electronically but, when it comes to a claim, I want to speak to a real person who can understand what I’m trying to get across and can be responsive and reactive to what I say.’”
Local markets
Growth is being seen at both ends of the spectrum, from high-net-worth individuals through to manual workers.
Apps said: “You’ve got blue-collar workers [whose product is] cheap and cheerful, then you’ve got the wealthier expat who’s looking for a truly global product that will allow them go where they want.”
Changes to legislation in many countries mean health insurance is now compulsory both throughout the Middle East (Dubai is a notable example) and increasingly in Europe, giving the market a boost. Such changes can, however, work against the IPMI industry if governments decide they want their own domestic PMI companies to be the only ones operating in the market, or where legislation is not designed for the IPMI market.
Apps says: “This is where insurers can really come into their own by helping brokers say, ‘Right, this is the law as it stands today; this is what needs to be done; yes, we can help; no, we can’t help.’”
Brown adds: “The reality is everyone goes to the same kind of places – it doesn’t really matter where you’re from – and across the 135 countries [in which] we provide cover, you just need to put a different lens on to reflect the requirements of the local market.”
A continuing threat to the market is fraud – not just in the traditional sense of claiming for illnesses and treatments that are non-existent, but also in claiming for treatments that are unnecessary.
Massey concludes: “You do see it from time to time. There are controls that can be put in place to make sure this kind of activity and behaviour is as limited as possible. Any international health insurance provider worth its salt has a decent cost‑containment strategy that has controls in place to stop these things from happening.”
