Fiona Murphy discovers that advisers should fasten their seatbelts as the IPMI market is accelerating to meet an increasingly mobile workforce.
Cost-containment
Arguably the market is being held back by its penchant for high premiums and soaring medical inflation.
Rice said: “There have been unsustainable premium rises from many insurers and keeping the lid on medical inflation is one of the key priorities because it is an expensive product to have. Costs are being questioned now, whether its individual right through to the large corporates in terms of managing that. However, it’s much more difficult to manage the cost due to the international element of it with different jurisdictions and territories.”
However Globalsurance research found premium increases have been on a ‘downward trend’, a global average of 9.8%, after reaching a high of 10.8% the previous year.
On average this was 10.2% per year for Southeast Asia, 9.3% per year for the Middle East and 9.5% per year for the rest of the world. This has largely been a result of improved market data allowing insurers to price plans more suitably for specific areas, repercussions from the financial crisis, an increase in competition between local insurers and growth in expatriate communities.
Advisers can really add value in terms of cost-containment strategies, yet many are yet to dip their toes into this market. High-net worth clients may benefit from an IPMI plan over traditional PMI , as they are willing to travel for good quality care, but this opportunity is being missed by advisers.
Meanwhile fraud continues to be a real problem across the sector. In May COVER reported that suspected IPMI fraud of ‘considerable size’ was under investigation.
Rice agrees it is a growing issue: “There’s more propensity for fraud coming though and dubious medical providers, perhaps not falsifying the claims process but over-inflating costs to maximise the revenue from claims. Insurers are finding it difficult to stay on top of that. Risk management is a critical element of it.”
Overall, the IPMI market is growing and trying to adapt to changes in the global workforce, as looking at ways to provide better regional coverage and contain costs, well as tackling fraud.
However, a significant proportion of advisers appear to be cast adrift from the potential opportunities. They would do well to fasten their seatbelts and come along for the ride.
