International PMI has generally been sold as a complete package regardless of the individual needs of the client or country they are heading for. This means customers have often had to pay premiums for a full range of benefits, from primary to secondary care and home nursing, even if many are available locally to expatriates at minimum or no cost.
A good example is cover for repatriation or evacuation for medical treatment. This is an essential benefit for travellers to many third world countries where local facilities are poor or non-existent. However, travellers to western Europe or the USA are unlikely to require repatriation as local services should be more than adequate. Yet a number of insurers will ask them to pay for it as part of standard cover, pushing up their premiums.
Some international policies offer only two levels of cover, with the more expensive package offering such extras as pregnancy or dental treatment charges, but repatriation in effect compulsory to both. But medical insurers are increasingly looking at introducing tailored packages that take into account differing conditions around the world, IT and the quality and cost of local health services.
Last year Dutch-owned insurer OHRA launched a “menu-style” policy designed to allow customers greater scope to tailor health cover to fit the needs of the country they are visiting and the demands of their pocket.
OHRA’s head of marketing, Hazel Berrill, says the policy offers comprehensive cover for in-patient hospital and day care treatment, then allows the customer to choose from five options for extended cover. These options include semi-private accommodation, out-patient cover including GP and dental treatment, post-hospital and home nursing cover, chronic illness cover, and, finally, repatriation. Berrill says the menu principle will help keep premiums down and benefit the growing number of UK expatriates who move from one country to another, allowing them to adjust levels of cover according to local conditions.
She adds that another benefit of the policy is that it can also be brought home to the UK and there are no age-related premium increases: “This policy is designed for people who want insurance from the cradle to the grave. Expatriates often come home to the UK to retire but it can be difficult and expensive getting health insurance as you get older.”
Robin Payne, general manager of business development for the Exeter friendly society, says international PMI policies are still some way off reflecting conditions in different countries: “Policies are pretty generic at the moment. Tailoring is not here yet.”
Exeter offers two plans, a European policy and a worldwide policy, although the latter excludes USA or Bahamas. Its European plan offers three levels of cover. Basic cover includes hospital and out-patient charges, with levels two and three offering higher benefit levels and also paying a small sum towards GP consultations. This last benefit aside, the difference in the three packages is between level of benefits offered rather than type. However, costs are in part kept down by exclusion of repatriation or evacuation, which can be bought as an optional benefit administered by Mondial Assistance.
Exeter also has no age-related premium increases and only sells individual cover rather than corporate schemes. And Payne says Exeter works closely with IFAs: “They are very important and a natural focal point for sales. We work with a small number of IFAs in the UK with international PMI. These are typically healthcare PMI specialists, although we are trying to find more specialists abroad.”
Guardian Health offers two international packages, International and International Plus, both offering unlimited overall cover, full refund of hospital and nursing home charges, surgeons’ fees and repatriation costs where necessary. There is currently no option to cut premiums by waiving repatriation.
BUPA International, which has more than four million members in over 190 countries, offers three packages on its corporate scheme, Gold, Classic and Essential. Essential excludes out-patient charges, for example, while home nursing, dentistry, maternity and GP consultations are only covered in the Gold policy. Medical evacuation is available as a further option.
BUPA International divides the world into six different regions when assessing risk, so it can match the costs of medical care to the location of the policy holder and keep down costs. David McAllister, managing director of intermediaries Direct Healthline, says planning levels of cover for different countries is a complex process.
“When going abroad you must find out what medical facilities are needed. For example, if somebody is going to the Cayman Islands they will need cover for evacuation to the USA, because there are no hospitals in the Cayman Islands. In many places you just have to get out of the country for medical treatment but some policies don’t include repatriation for medical cover. It is vital to understand what policies cover and what you actually need for a particular country.
“There is a tremendous range of differences in the policies and between what insurers offer in standard and comprehensive packages. There is also a staggering difference in pricing and use of excesses,” he says. He adds international PMI can be a tricky market for IFAs to move into: “You have to be prepared to spend the time because it is very time-consuming. I spent three hours this morning putting a single quote together. IFAs are also more likely to have to give `after support’ and it is heavy on telephone and fax bills if the client is already abroad.”
McAllister, who gets much of his business through contacts in the armed forces, says sales of international PMI are increasing and he is now involved in areas as diverse as Australia, Bahrain, Portugal, South Africa, France and Hong Kong.
Figures for uptake of international PMI policies are hard to come by, although it is estimated that less than half of expatriates have any form of cover at all. Many UK citizens moving abroad take NHS cover for granted and neglect to make plans for cover in countries with less comprehensive healthcare systems. This should in theory provide opportunities for IFAs to expand sales in this market, although the groundwork can be daunting, even for intermediaries already specialising in UK-based medical insurance. Any widespread move towards more tailored products will only make the picture more complex.
Zig Malendewicz, at Hampshire-based intermediaries NIMIS, says sales of international PMI market policies should continue to grow, but they still comprise just 5% of his medical insurance work: “This is a growing market. People are retiring earlier, they have more capital to spend, and a lot more are retiring to warmer countries such as Italy, France and Spain.
“Clients fall into three broad categories. Individuals retiring to Spain or the Dordogne, for example, where there are reciprocal healthcare arrangements although these are not particularly good. Then there are individuals working abroad for a short period, say two or three years. Finally we have big corporate clients with a permanent base abroad who may also have foreign nationals coming here. They may need GP cover in the UK and dental and optical care, or even routine pregnancy cover, which can be expensive, meaning we have to find a British policy with these features.”
Malendewicz says there is a need for more tailored international PMI policies and for countries to synchronise treatment of foreign nationals: “We have more people coming here from abroad and more movement of British people, and they will need similar cover. There must be some standardisation of health care throughout Europe and the policies insurance companies offer will have to change accordingly. “NIMIS advertises in the Dordogne or Italy. Advertising creates awareness but people should really have sorted out insurance before they go and live abroad,” he asserts.
PPP Healthcare, recently purchased by Guardian Royal Exchange, covers expatriates in more than 100 countries and operates in 250 hospitals worldwide. International marketing manager Chris Knott says it deals with a wide range of brokers on international PMI. “We see international brokers based in the UK as an extension of our sales force. There are a whole mix of IFAs involved, large brokers have the lion’s share but often smaller brokers have large accounts as well,” he says.
“It is not a great leap to expand into the international market if you are already selling PMI in the UK. The principles are the same although the products are slightly different. In the UK clients have the NHS as an alternative. Expatriates overseas have probably not got an alternative therefore it should not be too difficult a thing to sell.
“People say the UK market is static but this does not hold true with the international market, where there are definitely opportunities for brokers. We have seen 10-20% growth a year and expect this to continue,’ he says.
IFAs already dealing with UK PMI should not face too daunting a learning curve in getting to grips with international plans. Customers tend to be more loyal to their insurer and there is much less churning of business. The complexity comes when looking at the different welfare and medical conditions around the world. But IFAs working in PMI with expansionist plans who want to see their business grow worldwide, could find international PMI worth a look.