O ne event came to symbolise the international health insurance market in 2001 – the terrorist attacks in America on 11 September. Until then the market had been developing progressively, with new entrants joining, cover widening and brokers keen to capitalise on the opportunity to expand their portfolios.
Just the day before, market leader Bupa International launched three new add-ons – Healthline, Evacuation and Repatriation – to its existing plans. Then 11 September led to sharp falls in international travelling, and a knock-on effect on insurers that has still to fully cascade down to pricing and cover changes. But those terrible events did illustrate the importance of having international health cover.
Ultimately, business post-11 September may best be summarised as fewer people prepared to work or travel abroad but more of those taking out cover.
A number of new providers have capitalised on the general trend towards globalisation and representation abroad. Á la Carte, Healthcare International, IMG and Winterthur have all joined a market led by Bupa International. Other providers include PPP healthcare, Cigna and Allianz, with a number of specialists also prominent in the market.
The trend on cover has been towards becoming more comprehensive, believes David Heppard, the head of international business at London broker IHC (Independent Healthcare Consulting).
He cites the move towards covering chronic conditions and a more menu-driven approach as indicating how cover is changing. Such an approach can also avoid having to pay for cover that may not be needed – for pregnancies for example.
Á la Carte director Carolyn Paul says: “Customers are now better informed of what is available for health insurance, and ‘packages’ which include benefits that are not attractive or not required are being replaced with the flexible menu-driven approach.”
InterGlobal business development director Peter Rousseau points out that it is important to read the small print, not just the general cover heads. “We are the only provider prepared to evacuate the whole family if something goes wrong,” he claims. Here, health is not the only problem. An accident, especially if it is your fault, can give rise to the need for legal cover too.
Since September, InterGlobal and IHC have developed an add-on designed to cover political risks too.
This corporate-only plan kicks in where an embassy advises its citizens to leave a country. There, the specialist skills and experience of the international assistance companies can be invaluable in getting employees out of a danger area quickly and safely.
Such complexities mean more employers are now looking to their broker to arrange cover rather than simply using their UK private medical insurance (PMI) provider.
One factor influencing both brokers and clients is the financial security of the insurer as measured by its credit rating. “Sixty per cent of our book is held through intermediaries,” says Bupa International senior communications executive Jon-Paul Clarke. “But 90 per cent of our new business in 2001 is now held through this channel.”
One growth area for brokers has been small and medium enterprises (SMEs). Clarke says: “It’s important for a small company to know that their member of staff receives high-quality treatment as quickly as possible in order for them to return to work at the earliest convenience.” Very often SMEs may have just one staff member covering a large geographic area, so good health is important, especially as back-up from the employer may be hard to organise in practice.
A growing worry for many employers is cost. International cover is more expensive than UK PMI because it covers so much more – for example, chronic conditions, normal pregnancy, GP and dental costs and prescriptions – and international medical inflation is running at ten to 14 per cent a year, according to Heppard. Since September, rates have hardened by around 15 per cent and some insurers have become nervous about particular markets. The advice is to check price and availability of cover before quoting, he warns.
War risk exclusions are now moving away from the previous ‘passive’ cover – you were covered in a war zone unless you were an active participant. Now, says Rousseau, weapons of mass destruction are likely to become an exclusion too. War exclusions are not standardised, so it pays to shop around.
Despite the events of last September and its aftermath, prospects for brokers in this market remain good. Cigna director Sheldon Kenton sums up the opportunity: “The events of last year made employers more aware than ever of the need to provide high-quality benefits for their expatriate employees,” he says, “as well as making staff themselves more discerning about their benefits package.”