By the time Goodhealth Worldwide was sold to US giant Aetna in 2007, the international private medical insurance (iPMI) provider had grown to 55,000 expatriate members, while the company itself had around 170 employees in offices in Bermuda, Miami, London, Dubai, Jakarta, Hong Kong, and Shanghai.
So when it was time for the managing director responsible for that growth to move on following the sale, naturally the iPMI sector was abuzz with speculation about Martin Garcia’s next move.
Ironically for an iPMI professional, the answer would be travel. A few months of leisure travel, that is, including a family trip to the Beijing Olympics. But all the while, far from the back of Garcia’s mind was a dramatic return to the iPMI industry. Having cracked it once, he was planning to do it again, this time from scratch. And all would be revealed in January of this year, when Garcia’s new venture, Now Health International, was formally launched.
The provider, backed by private equity investor Primary Group and with products underwritten by AXA, is targeting an iPMI market which is undeniably thriving, but which is crowded and competitive too. So where has Garcia spotted an opportunity? How will Now Health International stand out from the crowd?
“I wanted to widen the net from a pure expat business which is the original model and start to go to this global, affluent, mobile population, whether they are locals or expats,” Garcia explains. “If you can sell the product to mobile and entrepreneurial Chinese or Indians [for example] then certainly the demographics become so much bigger than just pure expat markets.”
Garcia began to formalise a business plan in January 2009, before he and his team started building the business in mid-October of the same year, prior to launch in 2011. Having already reaped the rewards from backing Goodhealth, Primary Group – coincidentally also the investor behind national intermediary Lorica Employee Benefits – was convinced by Garcia’s vision of even more opportunities in iPMI.
“There is no question that having a track record and credibility as far as the model is concerned did help quite a bit,” Garcia says.
Primary’s $22.5m investment in Now Health International forms the basis of a partnership that is equally demanding and supportive, Garcia says.
“Primary Group is very focused on the insurance world which is a world they understand,” he continues. “They understand the fundamentals behind the business.” Primary’s backing certainly seems to have given Garcia the ammunition he needs to attack the iPMI market from day one of launch. While he will no doubt employ some of the tactics that made Goodhealth the success that it was, the Now Health International business model is undeniably different from that of his former venture. Goodhealth was built “over a reasonably long period of time with not a lot of investment”, Garcia explains.
“What Goodhealth never had was a huge influx of cash where we could build the infrastructure from the ground up,” he points out. “It was more a business that was built from the roof down. We built up the client base and penetration and then brought the infrastructure to it.”
While Garcia claims that the systems that Goodhealth developed would go on to be the “benchmark” that is now being used by most of the key players in the market, he concedes that the business model itself was faced with the inherent challenge of building infrastructure in a “live” environment. This time around, Garcia is in the comfortable position of having capital to be able to build an extensive infrastructure prior to launch.
“We wanted to be sure on day one we could deliver service and platforms,” he explains.“On day one we had 50 staff on board and three offices.”
AN EDGE IN TECHNOLOGY?
The technology and infrastructure behind Now Health International, powered by Sword, the specialist insurance tech provider, forms the bedrock of its proposition, Garcia continues, although there are of course areas where the “human touch” is vital. While a customer who requires a triple bypass, for example, will always be supported by human intervention during claim, the majority of basic iPMI admin functions can be carried out electronically.
“We found the technology that would enable us to deliver an online banking environment where you can self-service, where you can look up the information, you can add your member online, you can log your claims online, track your claims online,” Garcia says.
Garcia is acutely aware of the potential of “leakage” and “inefficiencies” in iPMI due to admin-heavy processes that he claims are circumnavigated by Now Health International’s tech-focused approach.
“If you don’t do it very well […] there is a lot of margin that disappears and data gets captured three or four times in different databases and it’s quite inefficient,” he says.
Now Health International’s service ethos is based on a regional philosophy, with a head office in Hong Kong and customer service centres in each of the key regions around the globe, including Dubai – where the company now has two offices – and the UK. Again, Garcia’s experience with Goodhealth prompted the decision to set up in those regional hubs.
“It’s one of the key differences from most of our competitors: they tend to be very centralised,” Garcia argues. “One of the unique propositions of Now Health International is that we are not centralised in one place. If you are in Asia we’ll talk to you from Hong Kong, if you are in Europe we’ll talk to you from Europe and if you are in the Middle East we’ll speak from Dubai.”
Garcia also stresses that while competitors may have the advantage of brand and capitalisation, their iPMI businesses are often offshoots of domestic healthcare operations. “My core business is international healthcare,” he says. “I do nothing else, my core expertise is international healthcare and because I’m small I can be nimble, I can be quick off the mark, I can be interactive, it’s easier for me to deliver a very personalised service. All my resources, all my investments, all my focus is on that particular segment so that’s my strength.”
However, Garcia appreciates that brokers and customers need to experience service “in action” in order to fully appreciate it.
“Service is not an easy one to sell because you’vegot to understand it, you’ve got to visualise it,” he says. “We are taking the road less travelled. It’s hard work but we are trying to convert people on service.”
Of course, Garcia is conscious that the proof will bein the pudding, once clients come on board and claims start to come in.
“There is no hiding,” he says. “In healthcare, everybody tests the service so within two months you’ll have a claim and if you’re not there they can tell very quickly. There is no hiding but they [brokers] are willing to listen and give us a shot so that’s good.”
Garcia has of course been doing the rounds, visiting some intermediaries he knew well from his Goodhealth days, as well as some new ones too. Advisers, he says, have been “very welcoming”.
“They are not cutting us any slack and they are not doing us any favours but they are listening and they are willing to open the doors and willing to give us a shot,” he says. “There is no question that we need to be delivering on our promises. The name gives it away. It’s ‘Now Health’, it’s not ‘Next Week’s Health’ or ‘Next Month’s Health’.”
Turnaround times and service level expectations have all been published and Garcia is aware that while brokers will listen to what Now Health International has to say, they are, quite rightly, very demanding on behalf of their clients.
“You only have one chance of giving a good impression,” he says. “If you drop the ball you can make an effort, you can recover but it’s very slow, time consuming and expensive.”
Another challenge for start-up insurance providers, of course, is to persuade brokers of their financial security and strength. According to Garcia, the fact that AXA is underwriting Now Health’s risks has resonated well with intermediaries. Nonetheless, Garcia is adamant that Now Health International is in charge of its own destiny and its relationship with AXA – a primary provider of iPMI in its own right – does not compromise the essential competitive dynamic that makes the sector tick.
“AXA gives us the underwriting capabilities but the rest is proprietary to Now Health International,” he says. “It’s our product design, our central position, it’s completely exclusive to Now Health Intenational, it’s our business. We have a very good relationship with AXA. Their view is that it’s another route to market.”
THE END GAME
So what of the end game? How can brokers be sure that by recommending Now Health International to their clients they will be recommending a provider that will stay the distance?
“It’s definitely a business that can go several routes,” Garcia says. “For me it’s a long-term project, it’s a business that eventually could be listed, it could become an insurance company, so it has many ways that it can evolve and unfold.”
Garcia points to the fact that after Goodhealth’s acquisition by Aetna, while the book now falls under a different brand, it is one that has continued to grow and which has served brokers well. Intermediaries, he says, should understand that his is a long-term vision.
“In terms of when Goodhealth was sold to Aetna, it went from strength to strength,” he argues. “Most of the brokers that we used to work with at Goodhealth, we’ve maintained a very strong relationship with. The business kept on going and that’s what I aspire to in Now Health International. It can take several forms really. At the moment we have built the model for ten years and then we’ll see what we do with it.”
Looking to specific regions, Garcia says that while he plans to open an office in China in the first quarter of 2012, Now Health International is not going to put “all of its eggs” in that particular iPMI promised land. He plans to open an office in India by 2013, while Brazil, Eastern Europe, Vietnam and the US are all hotspots that he has his sights set on, as are opportunities presented by the Arab Spring.
If it all pays off, Now Health International should be able to boast $100m of premium income within five years, Garcia hopes, hitting the “$200m to $250m” mark within the decade. It is a challenge that is going to keep him busy – and keep him travelling – but it’s one that he clearly relishes.
“It’s good to be back and there is a lot business, there is a lot of movement, there is a lot of energy in the market,” he says. “We’re happy to be back and competing.”