Demand for routine maternity cover must have been around almost as long as motherhood itself. But UK-based medical insurers serving the expatriate market have preferred to ignore the happy event. They have shown as much interest in pregnancy as Boris Becker did after his brief encounter in a broom cupboard with a Russian model.
British employers tend to simply overlook the question of cover for routine pregnancy, intermediaries claim. Intermediary Les Curson, the director of Nicles, says: “With business we have taken on, we’ve often found a lot of wives are not covered for routine pregnancy.” In a typical example Curson had to sort out, a British employee on a two-year secondment in Belgium discovered late in the day that he and his wife were not covered.
Other nations are more family friendly. Denmark’s upmarket insurer IHI has long-established plans that automatically include routine pregnancy, delivery and postnatal care and complications in mother and baby without limit.
From launch a year ago, Germany’s Allianz Worldwide Care offered cover. And American insurer Cigna International, which claims the biggest slice of the corporate world market, boasts unlimited maternity cover.
While British insurers have tended to cover pregnancy complications, they have sidelined routine cover. But now they are expanding benefits to cater for expanding female forms. From last October Bupa International began including routine maternity cover up to £2,000 on its one-from-bottom Classic scale. Its Gold range was similarly enhanced but with a £4,000 ceiling. Crucially, Bupa’s Company First plan, launched in July this year to include chronic conditions, provides unlimited cover for mother and baby for 28 days after the birth.
As the name implies, Company First caters only for groups. Individuals requiring this sort of cover must look to other insurers. Bupa International spokesman J-P Clarke thinks maternity cover has long been an unmet demand but has been visible only recently. He says: “It’s a case of customer demand making its voice heard. Employees seem more willing today to speak up and have their requests heard.”
That’s the polite version. Another is that maternity cover is expensive, in some cases doubling the premium. Yet another is that maternity cover is inherently difficult for insurers to handle fairly. While the benefit will be of huge interest to a proportion of policyholders – largely females aged 26 to 34 wanting to start a family – it will be a costly burden to a bachelor or a couple with grown-up children.
It’s a difficult circle to square. Bupa has chosen to lump in cover with its top plans, despite the cost implications for those to whom maternity cover is as much use as a spare nappy. Intermediary David Heppard, the head of international business at London-based Independent Healthcare Consultancy, says: “In a way I find that irritating. Bupa’s individual rates are up eight per cent this year. Its small group rates are up 12 per cent. No one is telling the client the pricing has gone up 12 per cent and if you’re moving up six per cent because of an age band change you’re looking at 20 per cent.”
Some of that rise must be down to the inclusion of maternity benefit but, as Heppard points out, there’s no obviously fair way to do it. He says: “Maternity is a very detailed area and a sensitive one. There’s no right way and wrong way, people just have to be aware.”
PPP International offers routine maternity benefits (capped at £4,000) on only its top-range Prestige plan. But as spokesman Ewan Sturmey points out: “If you look at our competitor’s products you’ll see very few have it.”
The more common alternative to the Bupa/PPP approach is to offer maternity cover on top-range products but only as a paid-for extra. InterGlobal is a strong believer in this approach. Development director Peter Rousseau argues that the option will only be taken out by someone planning to use it. The march of science, through which people gain an ever tighter grip on their fertility – both in preventing or stimulating conception – underlines the point.
So bolt-on maternity cover is bound to be expensive. For comparison of cost of the maternity benefit against good cover, InterGlobal’s European premium for a policyholder aged 26 to 29 with UltraCare Plus (no maternity benefit) is £645.94. Bolting on full maternity cover costs £34 more than the premium itself – £685 in total and with a ten per cent co-payment, or excess.
Rousseau makes clear his reservations about automatic integration of maternity cover. “We used to have it in our individual policies and people would say: ‘Look, why must I pay a premium for something for which I have no intention of using because I’m single?’,” he says.
“Or a married couple with children will say: ‘Why should we have to pay? We’re not looking at expanding our family but I have to pay, my wife has to pay and now our child has to pay because the child rate is based on that benefit as well.’ So you’re getting a child contributing a proportion of that premium.”
Rousseau points to a further snag involved in integrating maternity benefits. “You get couples planning a family and they say: ‘We’ll go for this policy because it includes maternity.’ And then the child is born and let’s say that’s the end of the family complement. They go on paying the premium into their 50s and 60s, they’re still paying for the maternity benefit. They’re paying for the benefit for the rest of their lives if they are in the scheme.
“That is totally illogical. So we say: ‘It’s expensive but you only have it while you need it and we cover all complications in full.’” That includes – unusually – congenital abnormalities and birth defects. Rousseau adds: “That is a woman’s biggest fear that a baby is going to be born deformed or there is going to be a problem.”
Other wholesale insurers eschewing the all-in inclusive approach to maternity benefit include William Russell. It offers up to £3,000 routine cover and up to £3,000 for complications. ExpaCare has three levels of private medical insurance but maternity benefit is included only on its top-range SpecialCare. Benefits are capped at £2,000 a pregnancy and £6,000 if complications arise at delivery, with a 20 per cent co-insurance. Although ExpaCare is among the pioneers of chronic cover and extends this approach to infants born to appropriately covered policyholders, congenital and birth defects are not included and this is standard industry practice.
The “menu” system used by the continentals, in which maternity cover is an optional module, has been taken up by new market entrant A La Carte, as its title implies. It is based in Worthing, Sussex and underwritten by Lloyd’s. Indeed, modular or menu approaches would seem the logical solution for insurers, even if Bupa has bucked the trend. With 250,000 international policyholders, perhaps the provident is big enough to take the philanthropic view and submerge risk in the group pool.