If you are not selling international PMI then your competitors are. However, as Edward Murray explains, this is a rewarding market
The UK private medical insurance (PMI) market has hardly been a hotbed of growth in recent years, leaving intermediaries with the unenviable task of trying to develop their businesses in what is ultimately a shrinking pool.
The latest figures from independent market analyst Laing & Buisson highlight the issue and find that the market had contracted by almost 5% during 2009. This is not surprising given the parlous state of the economy and the decision by many to downgrade or even cut their cover altogether.
Commenting on the research, author of the report Philip Blackburn, said: "The private medical cover market has shown itself vulnerable to business cycles, so its prosperity going forward will largely depend on the strength of the UK economy.
With forecasts for sluggish economic growth in 2010 and 2011, the market is likely to remain subdued for some time."
While this may not be great news for intermediaries working in the UK PMI market, there is one option available which will help them not only to protect their existing book of business, but also to grow it.
At the moment, the majority of intermediaries working in the PMI market focus solely on the UK, however, by taking a more international approach they would be able to offer a fuller service to existing clients, and also attract new ones.
A slow process
Clearly moving into new markets cannot just happen overnight and there is a degree of research that intermediaries would need to carry out, but the obstacles are certainly not insurmountable and there is a significant amount of help available from providers, who are keen to bring new intermediaries on board.
Certainly intermediaries should not be overwhelmed by a move into the international market, as Lee Gerry, healthcare manager at Expatriate Healthcare, explains: "UK PMI is very formulaic and I think that some brokers are wary about the rules and regulations surrounding international PMI. Accordingly, IPMI brokers are seen as specialists and there are only a handful operating in the UK. However, IPMI is not as scary or complicated as many think and it is up to the product providers to ensure that there is appropriate handholding with companies wishing to enter this arena."
One important aspect of offering international cover is the protection it will afford to existing UK clients. In what is becoming an increasingly competitive space, everybody is fighting for clients and clients themselves are taking advantage of the competition to look around and see if they are getting the best value from existing arrangements.
Where an intermediary is only offering UK PMI, clients with international needs will also have dealings with another intermediary to place their overseas cover. As such they are immediately open to the threat of that other intermediary beginning to offer UK PMI to the client.
Providing international policies immediately does away with that threat and could be an important factor in keeping clients with both domestic and international needs happy.
Alvaro Munoz, head of sales for Europe and Sub-Saharan Africa at Bupa International, believes offering cover beyond the shores of the UK is an excellent way to protect existing customers and he says: "There are a number of intermediaries that are very well established within the domestic health insurance market and who have developed an international line of business to complement their core business as well as providing their customers with an international business solution."
On top of protecting the business they are currently placing, intermediaries are also giving themselves the ability to grow the account they have with each client by offering a wider suite of products.
This is a point that Gerry makes saying: "A large number of businesses have overseas operations. IMPI and sundry accident and health (A&H) products are an ideal way to maximise the income revenue from existing clients."
By simply asking the question, ‘Do you have overseas offices?' an intermediary can tap straight into a corporate client's needs, and so adding an international dimension to fact find discussions is neither difficult nor time consuming.
developing appropriate skills
Once international opportunities have been uncovered within existing client banks, the next challenge for brokers is to develop the appropriate skills required to place the cover effectively.
However, this is not a job they will have to tackle alone and providers are very keen to help. Rosanna Turner, marketing manager at William Russell says: "We concentrate on supporting our brokers and it is in our best interests that they are knowledgeable about our products and confident in selling them.We think that if a broker is starting with domestic clients then they can move very quickly into international PMI."
She adds: "We have a team dedicated to specific areas of the world helping brokers understand everything they need to know."
Similarly Bupa International says it has an array of support available to intermediaries including marketing tools, support teams, relationship managers, intermediary events and an international newsletter.
This sort of support will help intermediaries get a handle on the rules and regulations that apply in various territories. Is healthcare insurance compulsory for expatriates? Do they have to buy it through a local provider as is the case in Germany? These are the sorts of queries that providers will be able to resolve immediately.
It may at first seem daunting and learning the technicalities of every international market would be a tall order, but this is not necessary. Instead, most intermediaries will look to focus on a certain world territory such as Europe, Asia or the Middle East and expand further as they begin to feel comfortable in each one.
As Bupa International's Gerry says: "A good provider would give any new intermediary appropriate training on both their products and the rules and regulations applicable to the countries of interest. It is not worthwhile explaining the intricacies of the healthcare systems and product licensing in the Middle East if the broker only has an interest in retailing in Cyprus. Any learning needs to be specific and targeted."
By taking this piecemeal approach it is, therefore, possible for intermediaries to provide for their clients and to learn in digestible chunks.
For intermediaries looking to work in the international arena, finding the best providers with whom to partner will be very important.
When weighing up what is important in a provider, Munoz offers: "Intermediaries should first assess the market they are targeting, identify the needs that such customers may have and then develop the appropriate business plan to meet their objectives.
When recommending a specific provider over another it is important to take into account criteria such as financial security, how long they've been in the market, global expertise, business capability and services and easy access to medical providers."
Giving his own perspective on how best to size up providers, Gerry adds: "In the early days it is going to be especially important to partner with a company who is likely to be willing to spend the time and energy in helping you grow your business. It would be worthwhile to test potential providers: pick a selection of questions that are important to you and your customers and call a selection to test their responses and customer services. A suite of products and online tools (such as online quote functions) are going to be of great assistance too."
In what is a harsh operating environment, intermediaries selling UK PMI cannot afford to sit back and wait for the market to pick up. Trying simply to ride the storm out is likely to leave them facing stiffer competition and struggling to hold on to the clients they have, let alone being able to win new ones.
The international market may not turn life into a bed of roses, but it does offer protection against the competition, the potential to develop existing client accounts and the chance of winning new business. International business also fits well with the knowledge that intermediaries have built up in the UK market.
For those worried about what their future holds in the UK PMI market, surely these are good enough reasons to look over the border and into the international sector?
