At a time of increased competition, it is vital to consider new income streams. Andy Seale explains what intermediaries need to think of when starting out in international private medical insurance.
The estimated growth of more than 12% that the IPMI sector has experienced is a trend many other insurance markets cannot compete with. Moreover, the potential for revenue is excellent. While commission rates remain similar to domestic policies, overall premiums tend to be much higher, with the resulting effect being higher revenues.
But despite these benefits, intermediaries have been reluctant to move into the market. There is a mistaken belief that the market is overly complex and a difficult one to break into. In fact, it is a great deal simpler than it seems. There are a number of challenges, but as the industry has evolved, insurers such as Allianz Worldwide Care have gained years of international expertise.
This expertise is something that intermediaries can leverage, in terms of product options, multilingual capabilities, established processes and IT systems, and an understanding of the ever-changing global regulatory requirements.
The first step before offering any IPMI product is to prepare the business for expansion into the sector. Existing intermediaries should consider recruiting an employee with experience in the international health insurance market. This is well worth the investment, enabling faster entry into the marketplace as the new hire can immediately start building a customer base.
The alternative is to up-skill an existing member of staff to specialise in the IPMI sector. This is where the expertise of the insurer comes to the fore, as they will be able to assist with training and advice.
Choosing an IPMI insurance partner is crucial. As well as training and advising intermediaries about the most appropriate products for their clients, they can also provide ongoing support, including accompanying the intermediary on any important client visits.
Intermediaries should identify a panel of IPMI providers that they wish to work with, and there are several important questions that must be asked of the insurers they consider.
They need to investigate factors such as reputation, flexibility, length of experience, speed and accuracy of claims turnaround, and multi-lingual capabilities. Specialist skills such as evacuation and repatriation cover should also be explored.
With medical inflation costs globally running at anything from 8% to 17%, the insurer should also be able to demonstrate an effective process for containing ever increasing claims costs via case management, pre-authorisation and agreements with hospital networks.
The financial stability of any insurer is also a key factor to consider with the economic crisis effecting companies from all sectors. This is often verified by one of the major credit rating agencies, such as Standard & Poor’s.
It can also be very helpful to do a head office site visit with the selected insurers so that intermediaries can meet key staff, see the operational set-up and get a better feel for the company culture.
The next step is to identify the target market. A good start for intermediaries new to the international market is to find existing corporate clients who are looking at relocating employees abroad, as they may not be aware of the benefits of IPMI compared to taking out domestic policies in each location.
Keeping in regular contact with individual clients can also provide new opportunities, as intermediaries may find that their existing clients are planning to move or retire abroad.
After looking at their existing book of business, intermediaries should also aim to carry out some prospecting for new business. A potential goldmine for new business is the network of organisations and support groups for British businesses across the world.
Advisers can consult the Foreign & Commonwealth Office for information on where both individuals and businesses are relocating. They can contact the British Chamber of Commerce across the world for British businesses that have employees overseas, or attend one of the many networking events and trade shows that take place in the UK each year.
For individual clients, intermediaries should also look at using social media, with Facebook, Twitter and LinkedIn all being excellent tools for generating leads.
If intermediaries are successful in developing a good reputation within IPMI, it is likely that potential clients will soon become aware of their market presence and approach them directly. They will also discover that IPMI opens up a range of cross-selling opportunities for numerous additional products.
Less is More
Given the complicated and expensive nature of sending employees overseas, IPMI clients are more inclined to use as few intermediaries and providers as possible for their employee benefit packages. This provides excellent opportunities to advise and place other insurance products such as life and disability cover.
The key point that intermediaries should keep in mind when moving into IPMI is that a degree of tailoring and adaptability is required, particularly for corporate clients. The cornerstone of succeeding in IPMI is in understanding clients’ differing global needs and being able to cater for them. This may involve creating an IPMI solution which varies from region to region and/or from one employee grade to the next.
In this, the right IPMI insurance partner is able to support the intermediary by creating a tailored solution for each client and providing them with efficient day-to-day support post-implementation.
IPMI is a hugely exciting market, with its own unique challenges and opportunities. By working closely with carefully selected insurers, a solution to any challenge is possible and there is no reason why intermediaries should not reap the rewards of this dynamic insurance sector.
Andy Seale is regional general manager (UK, Italy & Middle East) at Allianz Worldwide Care
