Hub International has raised concerns about the low barrier to entry for insurers or firms wishing to act as insurers in the international private medical insurance (IPMI) market and urged advisers to be aware of the differences between providers.
The advice firm’s executive president Patrick Gallagher told Health & Protection he believed this was IPMI’s biggest concern at present and he had witnessed issues during the pandemic because of the ease of access to the sector.
This was particularly so with those firms which cede 100% of the risk being carried to reinsurance markets or Lloyds, he highlighted.
Gallagher (pictured) explained it is quite easy for firms to set up as a managing general agent or managing general underwriter and appear to act as an insurer.
“It is also quite easy to set up off-shore insurance companies in havens where policies do not need to be filed, or the filing is lackadaisical,” Gallagher added.
“These off-shore companies can be set up as new companies or as a subsidiary of well-known insurance brands.”
According to Gallagher, while these firms tend to offer lower cost products, the consumer and often intermediaries are not savvy on the associated risks or lack of coverage.
He added that when he encounters consumers having an issue with these programs, the consumer is typically a corporation and the problem he says is that they have received bad advice from their consultant or intermediary.
“As Covid unfolded, we were barraged with clients whose coverage was changed mid-policy as a result of reinsurance changes and exclusions; members were left without proper coverage,” Gallagher said.
“Today, we find that many countries are requiring proof of coverage relative to Covid and top-tier insurers are providing best in class cover including for Covid. This typically provides a per-diem allotment for confinement to cover charges related to quarantine, hotels and so on.”
Last month, Linda Beavis, principal of global benefits at Aon, told Health & Protection that she was increasingly seeing providers exploring the design of IPMI products that accommodate home-based workers who wish to spend some of their year in the UK and some of it overseas.