International private medical insurance providers are forever urging brokers who don’t specialise in the field to get involved in what is undeniably a potentially lucrative market. Emily Borkowska goes in search of some pointers for brokers wanting to set up a specialist division to do just that.
The stagnation of UK private medical insurance (PMI) is causing more brokers to turn to the international market to grow their business. The iPMI market is a natural step because it builds on brokers’ existing expertise and staffing and it has the potential to be very financially rewarding.
One of the most appealing characteristics of iPMI is that it tends to be more resilient against economic downturns than the UK market. Expatriates do not usually have access to a national health service, so iPMI is seen as a must have rather than a luxury product. In addition, the global nature of the product means that there is nearly always an area that is booming and seeing an influx of expats.
“In addition to a high renewal rate, iPMI also benefits from a significantly higher average premium and a long customer life,” says Carl Carter, managing director of IMG Europe. “Because the commissions tend to be more even between new business and renewals there is not the incentive to ‘churn’ customers. This means that there is not the pressure each year to maintain new business at super high levels as there is not the cliff-hanger drop of commissions you see on UK PMI between year one and renewal.”
Brokers who wish to get involved in the iPMI market will generally choose one of two routes: setting up a specialist iPMI division or upscaling their UK practice. One brokerage that has set up a specialist team is PMI Health Group.
“We pool expertise to include technical knowledge of insurer products, benefits and services, combined with regional expertise to focus on the ever changing local regulations,” says Chris Beardshall, global specialist at PMI Health Group. “We also ensure that we provide regular advice and updates to our clients, recommending the most appropriate products and managing their expectations.”
If a broker decides to go down this route they will need to hire someone to set up the division and it is therefore usually the larger firms who can afford this option. Andrew Seale, regional general manager for UK, Middle East, Italy and Scandinavia at Allianz Worldwide Care, says firms should hire someone who is an expert in the international field.
“If a firm hires an international expert they could easily train him on the domestic side, and in return he could train up the team on international matters if required,” he says.
A cheaper and more common way for small to mid-sized brokers to enter the iPMI market is to grow an international business within their domestic PMI division. They could allocate a couple of staff to spend, say, 50% of their time on international work and 50% of their time on domestic work.
“Some brokers have one person within the team who is an iPMI specialist, but everyone does international work to a point,” says Philip Wright, director UK at DKV Globality. “If they are in the initial stages I wouldn’t create a specialist division but would grow it within the domestic division. They could then scale it up over time.”
Training
In either case, some training will be required to understand the fundamentals of the product. A typical iPMI product has fewer exclusions than a domestic PMI policy and will include benefits such as family doctor, routine maternity and routine dental. Most insurers will offer free training to brokers and this could include onsite training, webinars, training packs and CPD certificates.
“Brokers will first need to understand how the market works and who the various players are,” says Tim Mutton, business development director at iPMI provider Now Health International. “iPMI can be complicated because the regulations are more stringent than with UK PMI and vary from country to country. If a broker approaches Now Health an initial fact find discussion is likely to result in a bespoke training programme being pulled together.”
According to Seale, a broker with no knowledge of iPMI should be able to have a confident conversation with clients after three months of training. Once a broker understands the differences between PMI and iPMI, the next step is to generate leads. Andrew Apps, director at ALC Health, says they should first look at their existing UK business and ask clients whether they have employees working abroad or any foreign nationals working in the UK.
“If brokers look through their list of UK schemes there will be international business hiding there,” he says.
Brokers can then try to find new clients by visiting expat forums and by networking on sites such as LinkedIn and Facebook.
“Brokers need to get their name out there,” says Apps. “Expats talk to other expats and they will ask each other who they have their iPMI with and who they bought it from. A recommendation is the strongest form of selling.”
Marketing
It is also important for brokers to advertise the fact that they now sell iPMI, but this does not need to involve an expensive marketing campaign. Brokers can put an international section on their website and email clients to let them know that they can now advise on iPMI. They could also set up an email which shows they are international (.com rather than .co.uk) and create an international domain name – a firm called Best Broker could set up bestbrokerinternational.com.
“I have seen brokers go from no business to a healthy book of business using little money,” says Apps. “A website can be set up for £60 a year, and emails and online networks cost nothing.”
Some insurers will give a lot of help and advice on marketing. IMG Europe, for example, advises brokers on how to adapt their online fact find to allow for iPMI opportunities, how to create an international section on their website and how to use expat forums and social media to generate leads.
“We also have a wide range of product information, content and personalised brochures that brokers can generate themselves from our broker back office, plus a range of animated banners and adverts they can place on their website or use for other online advertising,” says Carter.
Keeping up to date
Once a broker has done some initial training and identified potential clients, their success in the field will come down to the accuracy of their advice and staying up to date with developments in the industry.
“Some insurers are moving towards modular products where you choose a core product and add extras such as repatriation, wellness or dental cover. Intermediaries need to keep up with these changes,” says PMI Health Group’s Beardshall. “However, aligning insurer benefits with employer needs is just one part of the picture – it is even more important to ensure that the service the client receives is consistent with their expectations.”
Beardshall says it is difficult to achieve consistent service standards globally. “It could be through regional service centres (where insurers are based in offices outside the UK), third party suppliers which comply with local regulation (for example in Abu Dhabi all providers have to be authorised by the country health authority) or direct payment of outpatient claims through global networks. In addition, many providers are using the internet as part of their service provision – with varying degrees of success. It is important to discuss these different approaches with clients to manage their expectations of the services they could expect to receive,” he adds.
Brokers need to understand some of the legislation that governs health insurance in the countries where their clients’ employees are based. This is the most complex aspect of iPMI as regulations change quite frequently. However, a good insurer will help brokers keep on top of legislation with regular email updates and newsletters.
“iPMI is a very natural extension of domestic PMI – it has the same terms and brokers are probably involved in some travel insurance anyway,” says DKV Globality’s Wright. “Brokers have a chance to build long lasting relationships with their clients. If they don’t, there is a good chance that someone else will.”
Typical profiles of iPMI members
INDIVIDUAL
Age 35-45
Married
English speaker
Comprehensive cover including maternity and dental care
Long-term expatriate resident
CORPORATE
White collar professional
Five to 35 employees plus dependants
Comprehensive cover including maternity, dental and evacuation
Contract expatriate
Source: Association of International Medical Insurance Providers/Andrew Apps, director, ALC Health
Questions to ask your existing UK clients
- Do you currently have any employees working overseas?
- Do you have any foreign nationals working in the UK?
- What arrangements do you have in place to protect their health?
- What does your company spend on overseas postings?
- Does your current provider meet local legal requirements?
- Are you getting value for money?
- Are you getting the service you deserve?
Source: Association of International Medical Insurance Providers/Andrew Apps, director, ALC Health