The innovators

Employees are the lifeblood of any organisation and anything that affects their wellbeing can seriously undermine the business. It therefore makes sound business sense to provide comprehensive international cover as an essential part of the benefit package for overseas employees.

Excellent public healthcare is taken for granted in this county, but staff do not have access to similar facilities abroad, and even where well-equipped efficient State systems are in place expatriates can only expect to receive basic care. The standards of healthcare can vary enormously, with little or no access to even the most basic facilities making medical insurance an absolute necessity. In areas where exceptional treatment is available expatiates need to know that high treatment costs will be covered by their insurance.

The expatriate profile varies enormously from small groups to large corporate schemes. The type of policy needed depends on what is of importance to the staff. This could include cover for anything from chronic conditions to pregnancy or dental treatment. It is vital to ensure clients' individual needs are met. The failure to choose the correct type of policy can result in the company picking up the cost for gaps in cover, such as chronic cover or routine issues like maternity. This can make what appears to be a cheap plan expensive.

It is estimated that 45% of expatriates don't have adequate cover. Clients are unsure of products available and require the expertise of advisers in evaluating their requirements and providing a solution. The majority of insurers report brokers write most of their business, so advisers can capitalise on this situation.

Global trends

The trend towards globalisation of the world's economies is leading to an increase in multinational companies and therefore an increase in the number of staff having the opportunity to work abroad. To retain a high calibre of staff, companies need to offer an attractive package and this will include medical insurance as an essential component. The international market is growing at an incredible rate, with niche areas of cover developing. This has led to a need to further explore and understand the market and insurers need to adapt to the current market conditions.

Over the past few years there has not been a great deal of innovation in the market and international plans have tended to remain in a fairly standard structure. To keep up with the evolving needs of customers, insurers are trying to provide innovation, through investment and development of their schemes.

Some insurers, such as Allianz, Goodhealth, A La Carte Healthcare and Denmark IHI, operate their plans as modules or menus, enabling clients to choose the items of cover that are important to them. Exeter Friendly Society has a plan that is portable within Europe and allows expatriates to travel anywhere within Europe and still be treated. Members of the BUPA Gold scheme can use their outpatient benefit for all providers ' that is, specialists or family doctors ' making the scheme more adaptable. The £600 limit on family doctor and prescribed drugs is now provided solely for prescribed drugs and dressings. BUPA has started providing MHD (medical history disregarded) as an option for company schemes, with a minimum of 10 members, with effect from July 2002, as well as an increased subscription to cover existing conditions without the need for underwriting.

Valuable additions

Vaccinations are included for members of BUPA's Gold and Classic schemes and Cigna International provides travel vaccinations for all members, including tetanus, hepatitis, typhoid and malaria.

InterGlobal offers a full range of international PMI (IPMI) products, with a choice of optional add-ons including full maternity benefit, critical illness cover, worldwide travel cover and personal accident. It is recognised as an innovator in product design and service provision with its 'no claims bonus' guarantee, no hospital listings and no claims forms. Outpatient claims also guarantee a maximum 14 days' turnaround, or the claimant is paid a penalty of £10 a day of delay. The plan also includes compassionate emergency return home benefit to visit a critically ill close family member.

Earlier this year, PPP International included prescribed drugs and dressings on its plans.

This is available from other providers, but is far from standard on policies. Cigna has no limit on the amount it pays out for maternity and no qualification period before it becomes payable. It will now also pay for pregnancies resulting from infertility treatment, although not the treatment itself.

BUPA's Company First scheme includes an option for a health assessment after one year's membership and then every two years after that. Cigna's top of the range product, Premier Healthcare Plan, which includes a range of preventative benefits, such as annual health screenings, cervical smears and mammograms has recently been extended to include well-child tests for dependants aged six or under and immunisations for those aged up to 18 or over if in full-time education.

Goodhealth's area of innovation is its ability to create products through their local offices that fulfil regional niche gaps in the market, one example is its Premier product which is designed specifically for expatriates in France and complements the State healthcare system.

Expacare offers bespoke plans for larger corporate schemes. Special care covers routine dental, outpatient psychiatric and maternity care. It originally broke new ground when it offered cover for chronic conditions and it uniquely offers MHD for corporate groups of five or more, where all overseas assignees are being covered.

With many companies conducting business online BUPA has invested $15m in IT and internet technology over the past two years. Its website was launched last year for brokers and intermediaries. BUPA's members' website provides online claim forms, access to membership details, instant quotes and online claims tracking for scheme members. This enables members to manage their policies from home and provides a useful service in areas where local postal services are unreliable. It has under test a site called Corporate World which allows secretaries of group schemes to conduct their corporate account management over the internet.

PPP has also produced a website from which members can obtain claim forms and other vital information.

Chronic conditions

In the UK, chronic care is excluded from PMI because it is available from the NHS. However, this is an important benefit to have included for an expatriate living in a country where this service is not available. While members can stock up on medication for conditions such as asthma and diabetes, the medicine loses effectiveness over time and doctors also like to monitor such conditions.

This is probably the most talked-about development in IPMI plans. The moral and legal aspects, and the fact that members are likely to have a greater than usual awareness of rights ' and willingness to exert them ' makes its inclusion vital. For example, there could be a discrimination issue if the employer does not have chronic cover as only employees without chronic conditions could exploit opportunities for overseas working.

This provision is well established among continental providers. Denmark IHI, for example, has offered chronic condition cover for a long time. Chronic cover is provided by Allianz, Cigna, Expacare and Goodhealth. PPP provides the cover for large corporate clients, and looks likely to expand this to cover chronic conditions on small corporate plans, however they have no changes planned on benefits before 1 April 2003.

BUPA is now providing group schemes with cover for chronic conditions as standard with effect from 1 October 2002. It is felt now BUPA has decided to cover chronic conditions it has set an industry standard ' and other insurers will not be far behind. As more insurers add chronic cover it will become the norm for IPMI schemes. However, according to industry sources, this could raise overall claims costs by a third.

An area insurers may now start to consider covering following 11 Sept-ember is an add-on policy covering repatriation in the event of terrorism and emergency political evacuation, however assessing the risk for this would prove difficult. Interglobal is to be in talks with underwriters about the possibility of this type of cover.

The latest newcomer to the market is A La Carte Healthcare, whose international health plan was established in 2001 and provides five benefits available on a menu basis.

This provides cover for hazardous pursuits, for example, hang gliding and diving are covered. Cover can also continue on return to the UK to cover private GP fees and prescribed drugs and dressings.

Planning ahead

There are plans in the Middle East to make international cover compulsory and a condition of getting a visa. In Switzerland, expatriates must produce a certificate of insurance, confirming they have adequate health insurance.

After working in Spain for two years, EU nationals have to contribute to the Spanish social security system. In France the authorities introduced Couverture Maladie Universelle (CMU) in 2001 which is a tax levied on all residents except the very poor and reimburses 80% of costs incurred by patients within the country's healthcare system.

The authorities banned sales of competitive products. Confusion cont-inues over whether traditional international cover is valid in France. However, top-up policies available covering the 20% liability are legal and Goodhealth and Exeter Friendly Society claimed to be the first provider to produce incontrovertibly legal plans.

This is an exiting time in the development of the IPMI market and it is an area of business in which we can all hope to achieve excellent results.

Judith Goodwin is national account handler for Private Medicine Intermediaries