Selling international healthcare insurance to clients living or working abroad is not rocket science, says Andrew Apps, global sales director at provider Goodhealth Worldwide. So why aren't more IFAs offering international healthcare cover?
The market for international health insurance for expatriates and overseas workers has undergone a sea change in recent years. New markets have not only opened up in the rapidly expanding economies of China and India but also in Central and Eastern Europe, where the healthcare infrastructure of the new EU members is generally sub-standard. And then there's the Gulf - currently the UAE is probably the fastest growing market for international health insurance in the world. Overall the global market is growing rapidly, at an estimated 30% per annum, so this is something of a boom time for intermediaries.
Health cover is a pressing need for expats, especially those living and working in developing countries such as China and Central and Eastern Europe, and each region presents a different set of problems. For instance, the new member countries of the EU, such as Hungary, the Czech Republic and Bulgaria, suffer from a creaking state system and private provision is only slowly emerging to meet the demand for high quality healthcare. Where private clinics are available, they have a captive audience: one in Budapest, for example, has 90% expat clients. Demand drives up prices and so costs can be as high as in the West.
Hospitals are improving rapidly in China but development is uneven and generally below par. Also, the majority of doctors speak only Chinese - so diagnoses are com- plicated. Generally speaking expats will prefer to travel to Hong Kong or even back home for most of their in-patient treatment. That means they need a policy which allows repatriation and, because all policies written in China are restricted to Chinese territories for medical expenses, they need an international healthcare policy.
With more and more UK citizens living and working abroad, there is a pressing need for this sort of practical advice. Most IFAs would agree it is their role to protect their client's assets and an expat worker's health and the health of his or her family should be regarded as a financial asset. After all, exposure to risk abroad can result in a massive hit on existing investments to pay the medical bills.
International health insurance should be integrated into all IFAs' client protection programmes. Until recently only a minority of IFAs had risen to the challenge of selling international health insurance but now the availability of online product delivery is beginning to produce a long-overdue breakthrough.
More and more international health insurance providers have developed fully functional online systems. Goodhealth, for example, offers intermediaries and clients a comprehensive step-by-step quotation to documentation process, which can take as little as 10 minutes to complete.
The customer service advantages of online processing have been well-rehearsed. If a client wants to get cover at 5pm on a Friday afternoon, there is no obstacle whatsoever. It can all be achieved live and on the spot, right through to printing out a cover note and policy documentation. Less well understood, perhaps, are the ways in which web-based processing simplifies selling international health insurance cover for intermediaries. Most IFAs are, of course, fairly familiar with online transacting in various aspects of their business - it has proved a great boon to the smaller operators, in particular by doing away with costly and time-consuming paperwork. And, by simply adding in an agency code, commission is automatically paid into their account.
But it is in the area of information and training that the internet has made the biggest impact in the international health insurance market. Providers' websites not only offer online product processing, they also make the job of advising clients and selecting the right product much less daunting. Knowledge and training of international health insurance have always been seen as the biggest barriers to IFAs entering the market. Now virtually all the data needed is on the providers' web pages. Email and telephone helpdesks are on hand to respond to more complex issues and many intermediaries encourage providers to talk directly to the customer to resolve specific enquiries.
Indeed it is very often clients who are at the vanguard of change, driving the process forward. The internet revolution has raised expectations in terms of service and transparency. They want to be able to track claims online, view information on local healthcare facilities, check out networks of hospitals or recommended doctors anywhere in the world. Ideally they should be able to do all this through their advisers' websites - and they can. All IFAs have to do is develop discreet links to the most advanced providers' portals.
Although the sophistication of online systems has taken much of the complexity out of selling international health insurance cover, there is still a place for on-site training for IFAs entering the market.
Most leading providers will give this support freely and help in the education process in the early stages of a new agency agreement.
The agency process, incidentally, poses no problems for IFAs. There is a simple form to complete, with new agents needing to demonstrate professionalism and membership of relevant bodies.
The training of staff on the technical aspects of health- care cover will quickly pay for itself by adding to the scope of the service the business can offer clients. The rewards of selling international health insurance cover are often not fully understood by IFAs.
The payback comes in terms of year-on-year renewals and the fact the same flat rates of commission are paid until the policy lapses. Although the commissions paid on international health insurance are a little lower than, for example, life cover, there is far less volatility in the international health insurance market. Like-for-like premiums do not vary dramatically from one insurer to another (even though rates - and therefore commissions - have risen irrepressibly in recent years). Consequently, the policyholder is less likely to shop around and the renewal transaction is more straightforward. So once a new book of business has been built up, it is very easy to manage cashflow effectively.
As it becomes progressively easier for IFAs to enter the market, those firms that are not able to advise companies or individual clients on international healthcare will soon find themselves losing out to competitors. There are many pressing reasons for learning an extra skill and providing the health and asset protection that a growing number of expats and international executives require n
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