Rising prices and increased competition are troubling advisers, but Mark Dunne hears a warning for insurers to avoid complacency.
Clients are starting to consider self-insuring and downgrading their coverage as international private medical insurance (IPMI) premiums continue rising, driving negative sentiment among advisers.
However, insurers are far more positive as membership is increasing and product innovation is maintaining interest, Health & Protection’s IPMI House of Lords roundtable heard.
Differing outcomes
Once again, confidence among advisers in the latest Health & Protection IPMI Report declined, following last year’s dip, highlighting increasingly disparate views between advisers and providers.
However, the panel heard there were some positives for advisers to consider.
While the large corporate area is stagnating, growth can be found among small-to-medium-sized enterprises (SMEs) and consumers, said Marsh UK leader of global mobility solutions Dave Hilton.
He noted that demand was coming from remote workers, people relocating across borders, high net worths and advisers offering IPMI to UK consumers.
Hilton then explained intermediaries need to be more diversified in their approach to target these changing groups and differentiate themselves in a competitive market.
However, questions around the difficult market for advisers were prominent among the panel.
Bluestone of London director Nadia Jafar questioned whether clients have become more sophisticated and aware of what they want post-Covid.
“This is why intermediaries may be seeing revenue coming down,” she said.
“Perhaps the reason is tied to the type of client, with high net worths maybe requiring something more for their money, while at the lower end consumers are looking for something different.
“Providers, on the other hand, are seeing positive outcomes because perhaps SMEs are hungrier – there has been a shift in that market,” Jafar added.
Vizion Health founding partner Matt Howells, who typically advises wealthy individuals, echoed some of that sentiment, reporting that expectations were greatest from clients paying the highest premiums.
Attendees suggested greater competition in the adviser space may also be the reason for the lack of revenue growth, but for Hilton this was seen as a good thing.
“It means people have to innovate a little bit more and actually add more value for the money we earn from the clients we’re servicing,” he said.
Insure it yourself
Looming over the debate was the omnipresent concern of soaring premium increases and this is now at the point of pushing people to actively consider alternative options to insurance.
The severity of this situation was highlighted by Libra Insurance Brokers general manager Austin Mason, who has seen wealthier consumers unhappy with their quote ask if they should self-insure?
He believes that with premiums rising, some consumers do not want to pay for treatments they do not believe they will need.
“The cost of general healthcare hasn’t risen significantly, it’s more in the niche treatments, which a lot of people don’t use,” Mason said.
He argued this is why providers have more confidence in the market than intermediaries – they are not having those conversations with clients.
“To a provider, it is just a lost piece of business, it could have gone to a competitor,” Mason continued.
“We have those conversations and do the advice piece; the conversations have definitely been more challenging.”
Howells added this was becoming more of a discussion with some wealthier clients for him too.
“Most people who can afford international medical insurance can also easily afford consultations and blood tests,” he said.
Download the full roundtable supplement here
Changing times
With rising competition in the intermediary market and consumers negotiating hard on prices, half of advisers in the Health & Protection research said their income had not changed in the past year, with only a third reporting a revenue increase.
This came at a time when, according to WTW senior director of health consulting Jessica Plewes, IPMI membership was growing.
“There is that push on price to try and get it down,” Plewes said. “So surely that’s going to have an impact.”
Goldstar Healthcare director Kshama Patel argued advisers do need to look at different markets too.
“Go from perhaps corporate to SMEs if need be or even move them up from an SME by asking them to expand their number of employees so that you can become a corporate scheme,” Patel said.
“You’ve got to keep working with different levels and upgrade them.”
With an industry modernising and evolving to meet modern consumer preferences, there is also likely to be some effect involved in that.
“If there’s change, there’s going to be some stagnation somewhere until everybody figures it out,” Jafar said.
“As advisers, we’ve got to understand what these changes are, pivot to it and make changes.”
Insurer positivity
The discussion was then broadened to the discrepancy in the experiences of providers and intermediaries – with insurers being far more upbeat about prospects.
UnitedHealthcare Global director of client management and broker support Claudine Audin reported seeing a change in dynamic around some clients – predominantly those who are time poor.
“They want quick access, but then you’ve got to modify your service proposition as a result because their expectations are that much higher,” she said.
“Customers are far savvier now and their demands are a lot higher.”
There is growth within corporate and SME markets but there appears to be a perception that it is stagnant or there is a lack of confidence, she added.
Geopolitical tensions in the Middle East are not helping. People are not moving to once popular locations, such as Dubai.
Yet there is no mass exodus either with insurers reporting that IPMI sales in the region tend to be transfers from other providers.
So instead of moving to the United Arab Emirates consumers are traveling to other locations, such as Zurich, London and Monaco, which, according to Cigna Healthcare International Health head of global individual broker sales UK and Europe Steve Martin, still creates opportunity for advisers.
“We are seeing it pivoting and transitioning rather than declining,” Martin added.
Martin then pointed to another changing dynamic, which has become a growth opportunity for insurers.
“Previously, the individual was sent on assignment,” he said, “but now we are seeing families traveling extensively as well and wanting something more flexible as a solution for international health insurance.”
Another trend, which is being fuelled by geopolitics, is living with uncertainty. Will a consumer live in a particular country for as long as they expect?
To help here, short-term IPMI products offering cover over three, six and nine months are being made available by insurers, and seem to be generating interest.
People who are not sure that they will live somewhere long term, have the option of a lower-end product, said IMG head of strategic relationships Amanda Olore.
“Then maybe we can convert those into longer-term policies when they realise they want to stay in Portugal or Vietnam,” she added.
The feeling is that given recent events the long-term element of IPMI is being questioned. Do consumers need this policy right now? Should they wait and see if it’s something they will need or will they return home after six months?
“We are just waiting that trend out as people aren’t going to Dubai anymore,” Olore said.
Instead, Portugal, Spain, Vietnam and Italy are the hotspots, while a “good chunk” of Americans are heading abroad.
“This is a new market and we are seeing significant growth,” Olore added.