With an increasing number of people looking to work overseas and the generous expat packages companies offered in the past no longer available, the market for IPMI is rapidly expanding
Almost everyday, a glance at the television schedules will show a living abroad or buying a property overseas programme in the line up. These are not just ratings winners but clear evidence of global mobility.
More and more people are looking to work or retire abroad, escaping the drizzle or the stress of the UK. Although it is impossible to pinpoint how many Britons live overseas, estimates suggest there are between 30 and 40 million expatriates of all nationalities worldwide.
The potential of the market is evident and most industry experts agree the rapid growth will continue as more countries and regions open their borders, both economically and to migrant workers.
We have seen more of the world open up as the growth in travel and communications helps to facilitate global movement. The phenomenal growth of IT and computer technology has also contributed to the movement of expats and, more importantly, to where they are relocating.
This compares to the 1980s when the oil and construction industries in the Middle East were the venues of choice. However, the recent economic boom in the Asia Pacific region has seen exciting and developing cities such as Shanghai and Bangkok now absorbing large numbers of expats.
These expats are most likely to be self-employed or contract workers not covered by a company private medical scheme. The days of large expense accounts are now limited and companies no longer provide all encompassing expat packages with free healthcare, tuition fees and housing as often as before. As a result, expats will increasingly be looking for an insurance provider offering the best cover available at a price they can afford.
Although international healthcare is a niche market, the number of providers has doubled over the last six years, though not all are truly global. Consequently, there are now a huge variety of plans on the market, ranging from basic to executive cover.
Basic plans cover inpatient treatment, with benefits increasing to perhaps outpatient GP visits and prescriptions, evacuation, physiotherapy, maternity and dental cover, rising onto optical benefits and cover for vaccinations on the most expensive plans.
Naturally, the level of cover is reflected in the price. The good news for the insured is that despite substantial increases in medical costs around the world, benefits and premiums have had to remain competitive. Furthermore, the average plan has become more comprehensive and insurers have added useful fringe benefits, such as preventative measures, to attract the client. Whether these plans can continue to develop as they have with minimal price increases remains to be seen. However, it is expected other practical issues such as local customer support and overall service standards will become more important over time.
These days, the typical expatriate may move country every three years, travel frequently on business and return home several times a year. Therefore, cover needs to be effective in all these locations, with portability and flexibility being key issues.
Local plans and several international policies do not allow the insured to upgrade their plan type as required nor provide cover while the client is outside of their country of residence. For example, an insured expat in Vietnam could find they are not covered while on business in Hong Kong or on holiday in Australia.
In general, international health insurance is price sensitive and value for money is paramount. Portability is also very important along with the freedom to choose where to be treated. Where a country's infrastructure is still developing, expats like to know they have access to the best facilities or that they can return home for treatment.
Health is precious and prospective clients need to be assured their chosen insurer will provide the support and guidance they require in the event of illness or injury.
With most people working abroad living in expat communities, recommendations and of course negative feedback from friends and work colleagues can make or break a provider's reputation.
The dangers of not having healthinsurance are well documented and awareness has increased thanks to media coverage. While this has contributed to the growth in the international health insurance industry, an increasing number of countries, such as Cyprus, have introduced measures to make medical insurance cover compulsory - with proof of medical insurance now a prerequisite for visas and residency permits.
Within the United Arab Emirates, several of the emirates have made compulsory medical insurance a concern for employers, forcing them to provide cover for their staff. Several neighbouring states, including Saudi Arabia, Kuwait and Bahrain, are expected to follow their lead - all of which are potentially lucrative markets.
A growing issue for providers is local licensing and regulation. UK-based providers still come under the jurisdiction of the Financial Services Authority (FSA), even though the majority of their business may be overseas, meaning they are faced with a duplicate regulatory environment. As well as complying with the FSA, providers are subject to local licensing laws.
The number of intermediaries selling international health insurance is rising but it is not something the vast majority of advisers spend time on. Without a doubt, the internet has moved the decision-making process more towards the client, but there are inherent problems with this.
There are a huge number of plans in the market, which all differ enormously. Some offer cover for pre-existing conditions, repatriation, portability and evacuation as standard, whereas some do not. So, where does the uninitiated expat start? The majority still consult an independent adviser and this looks unlikely to change. And, with a reported half of those living overseas without cover, the potential for advisers looks promising.
One thing in an intermediary's favour is an international health plan may open doors that were previously closed and can provide a useful addition to a client's protection portfolio. Especially if the worse should happen and cover is in place - potentially saving them thousands of pounds in medical treatment costs.
Growth of IPMI market continues
50% of expatriates abroad do not have cover
Range of plans available
Selling opportunity for advisers
IPMI providers face double regulation
Premiums remain low as competition intensifies
Putting the tech into protection
Square Mile’s series of informal interviews
Fallout from Haywood suspension
Launching later in 2019
£80bn funds under calculation