International private medical insurers have been sucked into the insurance industry’s big-is-beautiful approach. The classic case is PPP healthcare. It has metamorphosed in four years from provident association to plc, rapidly swallowed by Guardian Royal Exchange. GRE was in its turn ingested by AXA, a global giant with £530bn of assets under management. AXA is the third largest insurer in the UK general insurance market and has a worldwide network of 140,000 staff in 60 countries.
Fearing to be left in the cold, Bupa International has agreed a cross-selling dealing with continental giant Zurich Life. The provident describes this alliance as its most significant development of 2000. It allows Bupa to sell life insurance and Zurich to sell private medical insurance (PMI) in the international arena.
Another participant in the race for size is Allianz, with its entry into the international PMI market. The German insurer is among the half-dozen largest in Europe. Its PMI market share is still tiny but within a year it has picked up clients ranging from accountants PriceWaterhouse Coopers to car-makers Volkswagen.
The international PMI bandwagon continues to roll and there are no obvious signs of wheels falling off. For Bupa International, 2000 was another year of five per cent growth in its client base. “It’s been a pretty constant rise at that rate for some years,” says spokesman Jon-Paul Clarke.
Bupa’s main continental opposition, Denmark’s International Health Insurance, claims to have been clocking up growth rates five times the Bupa figure, while most of the small UK-based wholesale insurers point to double digit growth.
Despite this healthy sales picture, intermediaries would like to see a more free-flowing spirit of innovation. Jan Lawson, a partner in Otley-based intermediaries Private Health Partnership, says: “Innovation? There’s not been a great deal of innovation. International plans have remained in fairly standard structure over the last few years.
“Probably the biggest move has been in giving flexibility in choosing the benefit areas and perhaps an inner core product, providing essential benefits, with bolt-ons. It’s up to purchasers to decide what facilities they need on top, rather than a standard package of benefits as you would get under a normal comprehensive scheme.”
Allianz has been modular from day one. IHI has moved down the same road. And Goodhealth recently moved over to bolt-on benefits.
Such additions could help solve a problem exercising the mind of Les Curzon, the director of newly-formed healthcare company Stevenage-based Nicles. Says Curzon: “With business we’ve taken on, a lot of wives are not covered for routine pregnancy. It’s simply overlooked, possibly because the company hasn’t looked much further than the male employee and applied the same benefits to the wife.
“We recently had a case where an employee went to work in Belgium on a two-year contract, his wife became pregnant and the couple wanted to have the baby there but they weren’t covered. Really that should have been thought of in the first place, especially for staff sent a long way abroad, such as Australia, where you can’t just nip back across the Channel.”
Cigna’s director of international sales and client management, Sheldon Kenton, describes chronic cover and pregnancy as the two “classic” areas in which the industry is letting down customers. But despite these blotches, the industry looks set to rake in more and more customers.
On current trends it looks like the lion’s share of that business will go to big insurers.