ProtectionFeb 19 2016

International healthcare

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International healthcare

The statistics, which were compiled by market research company Finaccord, found that the global market for international medical insurance for expats and students was worth about US$12.98bn in 2015, of which more a fifth (US$2.78bn) came from new business.

On top of this, it found that although there were about 105.1m expatriates and students worldwide who were eligible for international medical insurance, fewer than 10 per cent had taken out cover. As a result, it predicts the market will continue to grow at a rate of 11.7 per cent a year to be worth more than US$20bn by 2019.

Taking cover

While international PMI may be outside many IFAs’ normal territories and comfort zones, it is a product that may suit a significant proportion of their client bases.

Damian Lenihan, sales director at Aetna, says many wealthier individuals are now globally mobile, spending extended periods away from the UK, either on work or in retirement.

“More people now work overseas or, especially in retirement, have a holiday home abroad where they spend several months of the year. If they have a domestic medical insurance policy, they will expect similar levels of healthcare overseas,” he explains.

“Many IFAs will have clients that fit these criteria, and a lot of them will not be aware they could take out an international medical insurance policy.”

As well as meeting expectations, where someone is overseas for more than a couple of weeks it can be foolhardy to rely on other options for healthcare. Travel insurance will provide a couple of million pounds or more of medical cover, but this is for emergencies only and is likely to exclude any pre-existing medical conditions.

Similarly, although the European Health Insurance Card is designed to give EU citizens the right to access state-provided healthcare when they are temporarily in any other member state, there is no guarantee that this will be on a par with the UK’s NHS provision and there may also be a charge for some medical treatments.

Depending on the length and nature of an individual’s stay, some countries will also insist on foreign visitors having medical insurance as part of the entry requirements. This is particularly the case in the Gulf States. For example, in Dubai, although it is not necessary for a tourist to have medical insurance, it is a requirement for anyone seeking a working visa and the authorities will also stipulate a minimum level of cover.

International benefits

Although the objective of an international medical insurance policy is the same as a UK plan – enabling the policyholder to access private healthcare when required – there are some key differences between the two types of cover.

Importantly, the breadth of cover on an international policy is much wider. “There is no NHS outside the UK, so international plans have to include benefits for items that we normally receive for free in this country and would never be included on a UK policy,” explains Chris Beardshall, senior consultant at Willis PMI Group. “These include cover for chronic conditions, maternity benefits and access to primary care.”

Another key component of an international medical insurance plan is evacuation and repatriation cover. This ensures that, in the event of medical treatment being required that cannot be delivered locally, the policyholder will be flown to a suitable site in the case of evacuation, or back to their home country for repatriation.

This can be a particularly important area of cover if someone is based in a country with a basic level of healthcare.

Benefits can also reflect other countries’ attitudes to healthcare. For example, anyone spending time in the south-east Asia may want to ensure their plan includes traditional Chinese medicine as this is often used in preference to western medicine.

Cover options

The breadth of cover and the varying demands of individuals requiring policies mean that insurers offer tiered cover, typically ranging from an in-patient only budget product through to a premium product that includes benefits such as health checks and vaccinations.

There is also a trend towards modular products that allow policyholders to select the cover they want. This form of tailoring can be useful, allowing older individuals to remove benefits such as maternity cover that may not be appropriate.

A local policy may also be an option. Akin to a UK domestic policy, these provide a level of cover that is appropriate to the country in which the individual is resident.

In some instances these plans can be mandatory. For example, in the Netherlands, expatriates are required to take out at least a basic level of cover to comply with the country’s healthcare regulations.

Where local cover is purchased, Claudine Audin, international sales and account manager at Aviva Health, recommends checking the policy details. “It can be cheaper to buy a local policy, but often it will not include important benefits such as repatriation or medical treatment in other countries. A top-up or wrap-around policy offering additional benefits might be worth considering to increase benefit levels,” she explains.

Cost and competition

The nature of international cover does mean it is more expensive than a UK medical insurance plan. How much more someone will pay depends on their age, the level of cover they require and where they are based.

The geographical area of cover will also influence price. Treatment in countries such as the US, China and Singapore is expensive, and these potential costs will be reflected in the premium.

As an example, a 45-year-old based in the US would pay more than £6,000 a year for worldwide cover with Allianz Worldwide Care.

Bring them closer to home, in this case Spain, and remove cover for the US, and the premium falls to below £2,500 a year.

While premiums are chunkier than for domestic cover, there is plenty of competition in the market. Although some of the names active in the UK domestic medical insurance market also have a presence in the international market, for example Aviva Health, Axa PPP healthcare and Bupa, there are plenty of other insurers competing for business. These include big global brands such as Aetna, Allianz Worldwide Care and Cigna Global as well as more specialist players such as ALC Health, Expacare and Now Health.

Complexities

Although competition means there is plenty of support for advisers wishing to recommend international medical insurance, the nature of the market means there can still be challenges.

“Every country has its own healthcare requirements, whether this is the level of benefits required or the regulations around the insurance,” explains Sarah Dennis, head of international at The Health Insurance Group. “These factors are constantly changing too, so it is a full-time job to stay on top of it.”

The Gulf States are a good example of this. Over the past decade, medical insurance requirements in the region have been tightened up as the cost of providing healthcare to a growing number of expatriates has increased. And, with the cost of healthcare increasing around the globe, this trend towards compulsory insurance is likely to take hold in other countries too.

Changing market

This complex and constantly changing environment means that working with a specialist international medical insurance intermediary can be a good way to support clients.

Many of the established firms have introducer arrangements in place to provide the expertise required. However, with sales of international medical insurance looking set to grow substantially over the next few years as more people become globally mobile, whether you provide advice on this area of business yourself or outsource to a professional connection, it could offer some sound opportunities for growth.