For those considering the sector, Andy Couchman rounds up the main themes impacting IPMI over the past year and the one to come
International private medical insurance (IPMI) has become much more high profile in recent years, as more firms operate in various countries around the world and as more UK intermediaries recognise that this can be a highly profitable and growing market for them.
For providers like Cigna the saturation level of broker involvement in the IPMI market appears to currently be around 85-90%. Commenting, Mark Coleman , director of international sales for the UK at Cigna, says: "We have seen a notable increase in agencies keen to develop within this niche area, and many are looking to set up specialised teams dedicated to this increasing market. This is on the basis of both retention of existing corporate clients through offering a wider range of services and also with a view to increasing their client base with new customers."
In general, IPMI has weathered the recession well, yet customers are now demanding more choice, as premiums around the world increase due to medical inflation and many customers now want to change their excess, change to another plan or select a plan that has a no claims discount facility.
In the voluntary schemes arena, Carl Carter, managing director of IMG Europe, points to significant growth, partly because many larger companies have been splitting up and creating new offshoots.
He notes: "Small groups are very cost conscious and they require increased flexibility in the product and areas available. We have seen increased demand for mix and match facilities, whereby various parts of a small group may have differing coverage requirements within the group, such as the board compared to middle or lower management." He also sees firms demanding more flexible options on corporate funded business.
Clear trends
One clear trend is that many countries with large expat populations now see IPMI as an important area for them to be involved in, both to ensure that expats have adequate cover (and so are not a drain on their resources) and as a business opportunity for home businesses.
As Cigna's Coleman explains: "Recently there have been legislative changes that have impacted upon the way that our international product has to be delivered, requiring closer integration with state facilities or local insurers."
This trend is also increasing across Europe. Recent examples have been in the Netherlands and Germany. Equally, products must often conform with local legislation to ensure appropriate visas are issued for entry.
IMG Europe's Carter expects more territories to make IPMI mandatory for expats: "Over the coming years it is highly likely we will see more countries try to enforce all expat workers to have healthcare coverage, with an increasing number of those countries looking to retain the premium domestically by requiring plans to be insured locally."
Joint ventures
One solution is to develop joint ventures (JVs) with local insurers, and as Tim Slee, sales director at Bupa International, explains: "We see joint ventures as a great way to bring together local knowledge with Bupa's global healthcare expertise. For example, we have partnered with the Oman Insurance Company for many years to bring solutions to customers in UAE (excluding Abu Dhabi)."
Carter also sees JVs as becoming more important, not only in terms of plans requiring a local insurer in order to comply with visa regulations, but also in terms of distribution and marketing within certain regions. He says that, as regulations restrict some overseas brokers in their ability to market ‘overseas' plans: "In many cases an IPMI provider will need to make a decision to invest and take the plunge with a local partner like we have in China, the UAE and Vietnam or accept the fact it will become increasingly difficult to compete against local insurers who have already gained international tie-ups."
So what will be the trend over the next year or so? Slee sees the need to tailor plans to customers' needs as a key driver going forward.
He says: "A major trend for the next year or so will be the development of increasingly tailored IPMI products, allow companies and individuals to exactly match cover to their requirements.
"This trend is not new, but in the year ahead it is likely to become more significant as customers increasingly demand products that are tailored to their precise needs - be this in terms of regional coverage or the ability to add on specific types of cover, such as optical and dental benefits, to core products."
While Carl Carter expects markets to become more segmented and increasingly regulated, he also sees IPMI as needing to deliver benefits that some would see as having little to do with traditional PMI or even healthcare: "As expats are moving further afield and recognising these increasingly volatile times we are living in with regard to social and political instability, violent and financial crime, terrorism and natural disasters, expats (and their employers), as part of their life or assignment overseas are now being exposed to many more types of risks and financial exposures than the straightforward traditional in-patient and out-patient costs of old.
"As a result of this, on our new GlobalSelect plan we have now included coverage to assist with political and security evacuation and repatriation, natural disaster evacuation and accommodation and even identity theft and criminal assault."
It may be a long way from traditional PMI but it is yet another example of how today's products have to meet customers' real world needs - regardless of any artificial boundaries our industry has traditionally tried to impose on what is coverable and what is not.
Andy Couchman is co-chairman of The Protection Review and director of Bankhouse Communications
