With research indicating a growing mobility of the international workforce, issues such as appropriate healthcare cover are set to becoming increasingly important considerations
Businesses predict that the number of internationally mobile employees will continue to grow over the next five years, and another 2.3 million Britons are set to retire abroad. By 2020, one in five older people will be living outside the UK.
As individuals become increasingly mobile and the world gets smaller, the expatriate market continues to demonstrate growth, and predictions are that it is set to do so for the foreseeable future. It is difficult to provide exact numbers but research conducted by several well-respected organisations all point to the fact that this is indeed a growing trend.
As long as there are global markets, there will be global workforces. The way in which it is being deployed has altered in recent years as the whisper of a global recession has got louder, and cost-cutting exercises top everyone's agenda. Recent audits show a change in the way this workforce is being deployed.
In 2002, research by PriceWaterhouseCoopers, which surveyed businesses in eight European countries, revealed that 70% of those surveyed expected their demand for internationally mobile employees to grow over the next five years. However, around 12 months later, GMAC released findings from their 2003-04 Global Relocation Trends survey that showed conflicting opinions in the business world. The 31% saying they thought that the number of expatriates had increased, was almost equal to the 34% who said that the number had decreased. It is perhaps not insignificant that nearly four-fifths of those questioned were based in the US.
A similar outcome was revealed in ECA International's 2004 research where 32% of employers felt that the number of expats had increased against 40% who felt the opposite. However, looking forward, respondents said that 36% felt that numbers would increase compared with 26% who predicted a decrease.
Current research indicates that although the number of expats is growing, companies, particularly in the US, are still cautious when predicting increased growth as well as being cost-conscious.
The impact of global recession (real or otherwise) has been unable to reduce the number of international placements, but has resulted in a decline of traditional long-term assignments, as the length of assignments are shortened. Cost control ranked as the top challenge associated with long-term expatriate positions, according to 72% of companies responding to the Cendant Mobility, SHRM Global Forum and the National Foreign Trade Council survey on global mobility. The research claims long-term expatriation from one country to another for more than one year currently accounts for 44% of assignment types. The companies surveyed represented over 200,000 globally mobile employees.
The expatriate population is diverse and growth is fuelled not only by the increase in international assignments but also by retirees. The lure of more clement weather and a cheaper cost of living means that more and more people are moving abroad when they retire. It is estimated that in less than 10 years time an extra 2.3 million Britons over the age of 50 will be retiring abroad. By 2020, one in five older people (an extra five million people) will be living outside the UK, according to Alliance & Leicester International.
While the motivations to move abroad are diverse, broadly speaking, expats can be split into two groups: long-term expats, such as those who have chosen to spend their retirement 'abroad', and short-term expats, often those on work assignments. However, the needs of expats, whether short or long-term, are extremely similar, particularly in the first instance when they are settling into their new country of residence. One of these primary needs is healthcare.
This is reflected in a recent survey undertaken by Bupa International, with healthcare provision topping the list of concerns for expatriates. Unsurprisingly, accommodation, language and schools also score highly. The awareness of the need for international health insurance cover moves up the expat's (or their employer's) agenda as a result of health scares such as Sars, terrorist acts and natural disasters such as the recent tsunami in South-east Asia.
The growth in the expat population means that the international health insurance market is also expanding. Consumers are generally looking for keen prices, a fast and efficient service, and access to the healthcare facilities they need, when they need them. Research at Bupa International has shown that peace of mind wins when choosing a provider. While price is a determining factor, quality of service, comprehensive coverage and the reputation and experience of the insurer is more important in terms of retaining customers.
Local vs global schemes
Cost-motivated, long-term expats may decide to move their PMI to a local provider once they have been in their new country for a while, but local policies are not always cheaper - certainly not in some European countries or the US where medical insurance costs are very high. Not being international, the range of services offered can be limited with local insurance companies.
A good international private medical insurance scheme gives you the option for global emergency evacuation if you need it; local schemes do not do this. Continuity of cover is also an important factor when choosing an insurer. When moving to another insurer, costs are often higher as the consumer has to be re-underwritten - a bit like car insurance, when you move to another supplier you may lose out in terms of no claims bonuses as you represent an unknown risk to the new company.
The web has helped improve efficiency levels both for the customer and for the insurance company. The bigger health insurers often have arrangements with local hospitals and clinics to pay claims direct so that the customer does not need to be out of pocket waiting for claim cost reimbursements.
The expat population is shaping developments in the international health insurance market as it matures. Policies are being designed and tailored around emerging groups, for example expats from northern European countries relocating to Spain and other Mediterranean countries, and, more recently, the increasing numbers of skilled expat workers assigned to developing countries in the Middle East. For example, Bupa International has a product that covers the client in Spain and one other country of choice, typically their home country.
This type of insurance policy will become increasingly important for UK citizens in particular, as the NHS tightens its belt and starts to focus on patients who continue to receive treatment free of charge despite no longer being resident in the UK.
In addition to consumer-led market developments, the health insurance market, both for international and national cover, is being influenced by the idea of preventative medicine. Preventative cover, where policies embrace regular health check-ups, are becoming increasingly commonplace, as are those which reward 'healthy' behaviour. The importance of preventative health techniques will grow as the average life expectancy increases (in the Western hemisphere).
Consumers will continue to drive the market. Whether it is healthcare provision for longer-living retirees or those on short-term assignments in developing countries who cannot afford for their projects to over-run due to ill health. As the health insurance market gathers pace and the number of providers increases, the policyholder will be the ultimate winner, as prices are kept competitive. Although it is worth remembering, that brand equity is of comparable importance when purchasing health insurance, you do not want to be left stranded at a time of need, even if it costs a little less each month.
Companies are still cautious when predicting increased growth in the number of expats, as well as being cost-conscious.
Healthcare is a primary concern of many expats, particularly with recent health scares such as Sars and the threat of terrorism.
A good international private medical insurance scheme gives you the option for global emergency evacuation if you need it; local schemes do not do this.
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Former PFS president
Last commission convened in 2002