As customer demand evolves to wider populations, Abigail Montrose hears it may be time to drop the international clause from IPMI.
Confidence in the international private medical insurance (IPMI) market remains strong but a dip in sentiment was detected in this year’s Health & Protection IPMI annual report.
While the industry remains upbeat about growth prospects, the last 12 months have seen some positivity seep out with confidence back to its pre-pandemic levels especially among intermediaries.
The panel at Health & Protection’s House of Lords roundtable agreed that while the market was still seeing rising policyholder numbers, some segments were clearly growing more than others.
One insurer even questioned whether the time may have come to rethink the international branding for the product as fewer people are buying plans for their multinational power.
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Buoyant SME and individual markets
“The large corporate part of the market probably isn’t as buoyant and growing as it used to,” acknowledged Mercer Marsh Benefits multinational global mobility solutions leader Dave Hilton.
“But there’s probably more growth in the SME and individual markets. We’re also seeing more regionalisation.
“Growth is probably in a slightly different place from where it has been in the past,” he added.
Cigna Healthcare International Health head of global individual broker sales, UK and Europe Steven Martin, agreed and has seen opportunities in the individual market growing.
“The people who would consider an international health solution are more diverse than it ever used to be,” he said.
“It’s now not just a standard expat on a three-year assignment with a tax-free salary who is looking at this. We’ve seen diversification throughout the customer types that we work with who want international health insurance,” he said.
The expat market remains strong and there are also some positive opportunities in other areas of the individual market said Lockton senior vice president and global mobility lead – people solutions, Joe Barnes.
“I think there’s probably more opportunity in the market at the moment than there has been in a long time, purely down to the different types of opportunities.
“We’re not just looking at expat business. Around 90% of what we write probably isn’t expat business or true expat business – it’s digital nomads, the domestic plus the cross-border,” he said.
Senior executives want IPMI
Demand for IPMI is also increasing among very senior business people, the panel noted.
“We’re seeing a lot of growth from existing clients that have PMI for their very senior people such as CEOs,” said Aon principal consultant – global benefits Tristan Cleaver.
“This year we’ve seen, for me, a record amount of growth in that area with people upgrading to IPMI.
“And it’s about knowledge as well. I had one case the other week where a client was unhappy about things not being covered by their insurer.
“So I said the answer is IPMI and that’s where we went with it. I’m just seeing a lot more of that going on as well, which is great for growth.”
Partners& client director James Henson is experiencing similar demand.
“A lot of the growth we’re seeing is in the domestic book, the senior teams wanting something better,” he said.
“They want to just be able to walk into somewhere and get things sorted and not have to think about it.”
He also identified a growing demand for more underwriting approaches.
“We have a lot of startup clients too,” Henson continued.
“They get their employees from the bigger companies where they are used to these benefits. They want medical history disregarded (MHD), they want flexibility, they may want maternity.
“They’re generally at an age where they may not be here for a long while, or they may be based somewhere else. So we’re seeing a lot of growth in the smaller SMEs benefit-rich MHD schemes we weren’t seeing before,” he said.
Mercer’s Hilton has also seen this trend creeping into parts of Europe and the UK with clients wanting better provision than they can get locally.
“We’re seeing demand growing among executive high net worth (HNW) clients,” he said.
“They’re buying two things. They’re buying the no boundaries, best benefits in the world, but more importantly they’re buying time.
“These people are time limited, money rich – they want to spend more time on decision making, strategic elements or just their life.
“And they’re happy to pay more, not just because they get a better plan but because the solution is boundaryless, it has a concierge element and that saves them time,” he added.
The end of ‘international’ IPMI?
This local buyer trend has become so prominent it has triggered the potential for dropping references to international in the product as Cigna’s Martin explained this could better target the product at the appropriate consumer base without confusing them.
“We’re having a debate internally about if we should continue to use the word international or global in these products?” he said.
“One of our biggest markets in Europe is the UK, but that’s mainly UK nationals buying international products as they like the richer benefits and flexibility.
“So we wondered, if we’re limiting that education to people who are saying they don’t need that [international cover] and so shouldn’t buy it, but what they actually do want forms part of the product we offer them.
“It’s an interesting one for us to continue thinking how we repackage and rebrand those types of products.”
Demand for short-term IPMI contracts
Clients are also looking for more flexibility with their IPMI cover with not everyone wanting an annual policy.
They may want a shorter policy which providers need to cater for, explained IMG global head of IPMI Kevin Melton.
“One thing we’re seeing is increasing popularity for our short-term healthcare plan,” Melton said.
“The days of having an annual contract are effectively in the past. Insurance providers just expected to fit everybody into a square box and now there’s a realisation we can’t do that anymore.
“So if somebody’s going on a trip or only wants cover for seven months, don’t try and sell them a 12-month policy. Sell them a seven-month policy.
“That’s the way the market is evolving; we’re certainly seeing this in the SME and the individual sector,” he added.
Global growth
Europe is becoming a market with increasing demand as people look beyond their domestic market for coverage, particularly for locations where even domestic private healthcare may not be very good.
And the US market is also seeing major changes.
“Increasing numbers of people are thinking about the geopolitical situation there and leaving the country,” said ExpatInsure CEO Chris Carter.
“Often they do not go far, such as to Mexico or Panama, and this has created a whole spectrum of virgin buyers for IPMI.
“We’re trying to bring in this new cohort of people that we haven’t necessarily seen before and we’ve also got big corporates where people are leaving the schemes.
“In some cases, they’re moving out of country, so they don’t want to be in the domestic schemes, but they want to have coverage elsewhere,” he said.
And Carter added older HNW clients were a growing trend which had their own concerns.
“We’ve got high net worth retirees who downsize, release equity and move outside of their country, sometimes for geopolitical reasons or for tax reasons,” he continued.
“The question is how long are they going to become stay-pats or are they expats in the true sense of the word?
“There are some interesting scenarios that could play out in the next five to ten years with the whole drive to move away from your home country,” he said.
Remore workers
Another growth area is the remote global nomad workforce, said Engage Health Group head of international benefits Penny Pemberton (pictured), but they can create headaches for organisations to manage.
“These clients are often young and mobile. They work for companies that do not have an office so can base themselves anywhere they choose,” Pemberton said.
“One minute they might be working in Brazil for six months and then they decide to go over to Spain.
“How do you manage that remote workforce? It’s tough because of course the policy is work from anywhere, but that’s a company policy.
“But if they work in Brazil and they’re a non-national, how do they access local healthcare there? This is where the IPMI market can be a good lever and help these people,” she concluded.
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