It’s no secret that the international private medical insurance (iPMI) market is booming. Long-established providers have made it quite clear to Health Insurance over recent months that they are ploughing huge resources into expat healthcare, while newly established providers have come on the scene in a bid to grab some of the action.
It’s all good news for brokers working in the field, of course. More choice and greater competition among providers is rarely something that turns off most intermediaries. But surely it makes it harder for providers to make their mark?
Not, says Martin von Kiær, chief executive of DKV Globality, if you are part of a heavyweight global insurance giant which is always looking to the long-term.
Until last year, brokers in the UK market could be forgiven for raising an eyebrow at such a comment. After all, in spite of the massive brand presence that DKV Globality enjoys globally, and in spite of it being part of the giant Munich Health group, UK brokers placing iPMI business would have been relatively unfamiliar with DKV Globality.
Now, though, the specialist expat provider is gaining traction with brokers large and small and, of course, their clients. The fact that DKV Globality is also opening a UK office at Munich Health’s London operations suggests that it sees huge potential in working with brokers in Britain.
I meet von Kiær at the office in Canary Wharf ahead of his flying back to Luxembourg, where DKV Globality is based. With him is Philip Wright, a former sales director of Standard Life Healthcare, who has been appointed to head up the provider’s push in the UK. While both acknowledge that the DKV Globality brand name might be relatively new to brokers here, it is part of an organisation with a long, global heritage. After all, as a member of Munich Health with more than 5,000 experts at 26 locations worldwide, which in turn is part of Munich Re, one of the world’s largest insurers and reinsurers, to say that DKV Globality is a “new kid on the block” is far from accurate, they stress.
“We have excellent local market know-how,” von Kiær explains, “combining the international know-how we have in Globality together with the knowledge we have from other entities working with expats for the last 80 years. So, even though you could say we are ‘the new kid on the block’, we have a lot of experience, we have a lot of contacts. DKV Globality is a centre of competence in the Munich Re Group and takes care of the entire group’s expat business.”
While von Kiær concedes that Munich Health and DKV Globality is a “fairly young structure”, both he and Wright are adamant that German companies “do tend to think long-term”.
“They do tend to think about how they develop strategically around the world,” von Kiær says. “We plan to be the leading expat health insurer in each of our chosen markets.”
Initially, that includes the UK, Spain, Switzerland, France, BeNeLux and Eastern Europe, he continues, also pointing to a particular focus on distribution arrangements in Russia.
“The important thing is to a have a structured approach to the markets you wish to go into,” von Kiær continues. “It is no surprise to anyone that the Middle East and Asia are probably two of the key areas of development. These regions form an integral part to DKV Globality’s plans in 2011.”
According to von Kiær, the fact that DKV Globality is the expat centre of competence for the entire Munich Re group gives him an excellent platform to build on his two decades’ experience in the insurance industry.
Von Kiær began his career in Denmark working for Royal Sun Alliance and since then has been involved in many insurance lines, from business lines to personal lines and also across the employee benefits field. Since joining the Munich Re Group in 2001 he has come to appreciate the organisation’s breadth of expertise.
“For me personally, the most interesting part [of his career] has been combining the resources in the Munich Re Group and putting them together to create the full picture and be able to go out in the market and make a difference,” he says. “We have the opportunities to do that in our group. DKV Globality enjoys the full backing of Munich Re. We can use the full value chain from reinsurance to direct insurance and everything in between. That also gives us a competitive advantage.”
That means that von Kiær is far from intimidated by the global clout of insurers such as Allianz, AXA and Aviva, nor by the iPMI market share enjoyed by the likes of Bupa International.
“If we combine all the health experience we have in our group, and that’s what we are doing right now, we have a lot of experience and a lot of experts working for Munich Health around the world,” he says. “It makes it easier for us to move into a new market, because we are already there. We don’t have to build everything from scratch.
“We explain to brokers what is behind DKV Globality, our connection to Munich Re and Munich Health. They see how many sister companies are in the group we can take advantage of. Combine that with our knowledge, our medical network and, of course, our expertise around compliance, insurance tax and so on and we have an opportunity to provide compliant products in a large part of the world. That is going to be one of the challenges in the future for a lot of our competitors, to be compliant.”
Like DKV Globality, von Kiær’s competitors, of course, will also be focusing on trying to establish a global footprint that will deliver the 24/7 first-rate service that the expat community demands. Again, DKV Globality is well positioned, von Kiær argues, before listing an impressive collection of facilities in the major timezones and expat hotspots around the globe.
“The reason why we use local offices is mainly to steer and guide our clients to the right hospitals, to get the right service,” he explains. “It’s also a benefit for the companies when we do that; we prevent over-treatment and we ensure that the employee is back and can do their job. That’s also very important for the HR and financial departments, that we have a sufficient system so we really can take care of the individual employee when there’s something wrong.
“It’s all about ‘what’s in it for me’ as a company, as an insured person, and we will try to fulfil these needs. We think that the market will move in that direction, more in looking at services and benefits instead of only looking at the price.”
But if DKV Globality wants to take on the established giants of iPMI, surely it will have to buy market share, in the early stages at least?
“We are not aiming for the biggest clients in each market in the entire world,” von Kiær explains. “We could do that with the Munich Re brand behind us, but that’s not what we’re going to do. We will be selective; we will work together with clients who also want to pay a reasonable price. We’re talking a reasonable price for a good product, a stable premium development. We don’t want to step in and buy the market.”
While von Kiær will not be drawn on specific growth targets, he says that DKV Globality is aiming to achieve a 30% individual / 70% corporate split across its portfolio, which its YouGenio and CoGenio products cater for respectively.
“What we try to do is have a balance in our portfolio of large clients, smaller/medium sized clients, and then, of course, the individual book,” he says. “The reason is so we can steer the premium developments in the right direction. It’s very important to have co-operation with a broker; when they bring business they need to be able to rely on the insurance company.”
The importance of brokers
A well-balanced portfolio, von Kiær suggests, is best achieved by having a well-balanced network of broker partners.
“We want to have clear presence in the market and we want to build up long-term relationships with brokers,” he says. “We are not here just to seek relationships with one or two of the big ones, but large, medium sized and small brokers will of course be our target group. We already see some of the very focused and specialised brokers bringing in a lot of individual business. That’s working really well and we want to expand that.”
Von Kiær attributes much of the success of DKV Globality’s YouGenio product for individuals to establishing relationships with specialist international brokers, such as APRIL Medibroker, through to the smaller “one man band” brokers and the larger well known intermediaries.
A number of those intermediaries have told Health Insurance that DKV Globality is to be applauded for being one of the few iPMI providers to take a flexible approach to underwriting individuals with pre-existing conditions, thanks in its case to its bespoke NORMRISK underwriting tool.
“This year we will focus again on a mix of larger and smaller brokers so our broker base can grow in line with our increased capabilities and options,” von Kiær continues.
On the group iPMI side of things, DKV Globality is segmenting the UK market “depending on the level of specialisation” and does not want to become “too focused on just the large corporates”.
“We’re not going to come in and say that we’re going to win a big UK account no matter what the cost,” he says. “That’s not our approach. We want to build a balanced broad-based portfolio. It’s not the quick wins we’re going for. That’s why we want to build a solid broad-based sustainable broker network. It’s about stability and a long-term perspective. Clearly we have to be commercial; nobody’s going to move a client to us if we’re not commercial.
But it has to be the right fit. If it’s the right fit and it’s a long-term relationship, then that’s how we’re going to develop our reputation.”
Clearly, while it’s no secret that the iPMI market is booming, neither is it a surprise to von Kiær that UK brokers will still take nurturing if DKV Globality is to make its mark with them in the long-term.
“We know that the way the UK market works is that brokers want to test you first,” he says. “You’ve got to build your reputation over time and we’re happy with that.”
Martin von Kiær joined DKV Globality in April 2010 as CEO. Before joining DKV Globality, he spent eight years at Europaeiske Rejseforsikring as chief officer responsible for the organisation’s expatriate and health insurance business, including Nordic Health Care. Europaeiske Rejseforsikring A/S is a primary insurance company involved in the business of corporate travel insurance, expatriates insurance, technical equipment insurance and unemployment insurance. The company is a part of the Munich Re group. Von Kiær holds an MBA in strategic management.