The Covid-19 pandemic has fundamentally reshaped how people work, leading to significant changes in global workforce movements bringing opportunities and challenges to the international private medical insurance sector.
Trends include the rise of digital nomads, with companies increasingly embracing remote work and hiring local talent.
The shift has created both challenges and opportunities for international health insurance providers.
Decline of traditional expatriate assignments
One of the major findings is that there’s been a decline in traditional expatriate assignments due to factors like the pandemic and cost-cutting measures.
James Carrick, international senior manager at Engage Health Group told Health & Protection: “We’ve seen a decrease in the traditional ‘expat’ type of approach to providing cover.
“Instead, we’re now seeing many companies revert to hiring locally using a more localised approach.”
Kieran Brown UK general manager for SIPS, agrees, adding: “Global workforce movements have certainly changed in the last two years.
“International health insurance is still in demand but I think we are seeing a change – dare I say reduction – in what I would class as the ‘traditional’ expatriate assignments for typical SME’s and large corporates.
“Conversely, we are seeing new and emerging markets which have opened new distribution opportunities.
“Global workforce movements have been significantly impacted in several ways in arguably some of the most challenging times.
“For example Covid and the pandemic immediately saw a halt on new assignments with many companies maintaining a ban on international travel and assignments long after governments had relaxed their travel advisories.”
The rise of digital nomads
One of the trends hitting expatriate assignments is the rise in remote work.
The idea has been around for decades – people working from home or out of the office, but able to work as normal thanks to the internet.
This has now been extended to allow for the further development of the digital nomad, where employees can make their living working online from any global location.
Brown says: “We have seen the emergence of the ‘digital nomad’ and the digital and work life balance where global organisations accept that their employees can work literally from anywhere on the planet.
“The pandemic in itself helped to prove the point, that so many job roles can be done from home and so that also supports the argument that work can be done from any location, country or continent you wish to see.”
For the insurance sector, one aspect of the global nomad phenomenon is a shift towards local plans instead of global ones.
Carrick says: “Given remote working patterns many companies are in search for cost-efficient benefits. This has resulted in companies with economies of scale in certain locations opting for local benefits rather than global plans.
“There is also a challenge with the rising costs of medical inflation and insurers looking to mitigate these rising costs. Turkey for instance is a country which has seen astronomical increases with inflation.”
Areas of growth and challenges
The decline in expat opportunities has particularly hit big locations like the Middle East and Asia.
But some countries are doing better than others.
Amber Musson-Thorp, group commercial director for Lifecare International in Qatar, UAE and Kenya, says; “For those of us based in the Middle East region the biggest movements we are seeing is in the UAE and the Kingdom of Saudi Arabia.
“There is a trend for high value individuals moving to the UAE and a significant shift of projects, people and infrastructure to Saudi Arabia (KSA) due to the multiple mega projects that they have announced over the last few years.”
Carlo Anthony Palcon, head of UAE administration at Pacific Prime Middle East, says: “People who moved on have either relocated back to their home countries or migrated to another country such as USA, Canada and UK.
“I must say though, compared to our other offices, we’ve seen lower numbers of employees leaving the UAE in the last two years.
“People that stayed are prepared to look for better opportunities here to find work-life balance, flexibility, and the demand for employee wellbeing.”
Expat growth in some industries
Despite overall elements of decline there are still some also some industries that some industries are continuing to see growth for expat employees, particularly in technical fields.
Musson-Thorp says that in Saudi: “There is a huge movement for construction, healthcare, technology, entertainment, tourism and renewable energy and we are seeing our clients and prospects opening up offices or moving some of their workforce across the boarder from Qatar.
“These ambitious plans are welcomed as we have seen a slow down in these large projects in Qatar post the FIFA World Cup.
“But it does mean that as an intermediary, we need to find cross border solutions for local and international medical insurance.
“There are some difficulties for smaller businesses that are starting with one to 20 employees without budget for an international plan as local insurers only work with local brokers who do not tend to get involved below 20 employees.
“That results in offshore businesses that do not understand the compliance requirements without access to any real support.”
Brown agrees, saying: “We have surely seen a downturn in the traditional expatriate assignment, but for certain industries they do still exist and are needed – and I can think of several industry types including banking, law, pharma, manufacturing and of course key energy industries such as oil and gas, mining and exploration.”
But for Pacific Prime no particular industries stick out.
Palcon said: “There are no specific market or industries per se, at least on our experience.”
He noted that Dubai has maintained its level of expat workers, even with people leaving.
“We’ve seen Dubai experience an economic upswing during and after Covid due to the fact that UAE had one of the best responses to Covid globally, early lifting of restrictions while ensuring safety for its residents.
“People have left, but a lot have also moved in.”
Meanwhile, another danger, particularly for the Middle East, is the rise of compulsory local health insurance.
Brown says: “Some nations are introducing compulsory local health insurance – particularly in the UAE and elsewhere Middle East but we are also seeing this in other regions and including Africa.
“From the international health insurance perspective therefore, what was once a strategic location for growth is now seen as a compliant risk if not potentially off limits at all.”
Changes in recruitment policy
Over the past two years there have also been changes in how companies view recruitment.
According to Jacklyn Tan, regional director of employee benefits in Asia for Howden, their research shows “most multinational companies (MNCs), regardless of industries, spoke about diversity, equity, and inclusion (DE&I) and talent recruitment/retention as the major challenges for the next two years.”
And there has also been a shift based on generation.
Tan said: “Various studies have reported that the upcoming Gen Z workforce will prioritise flexibility, mobility, and inclusivity.
“Such expectations and mindsets are very different from those of Gen X, who are mostly/likely the current decision-makers in any organisation currently.”
But that’s not the only change in recruitment policy.
Brown says: “There are several other factors at play, which have also affected a change in global workforce movements since the pandemic.
“Climate change and carbon zero mean big business is taking much greater responsibility in reducing its global carbon footprint.
“The cost-of-living crisis affecting most developed economies is forcing employers to reduce costs and so employers will think twice before approving global assignments.
“There are multiple geo-political situations which undoubtedly will influence a company’s risk assessment on whether to proceed with strategic plans which involve the movement of the global workforce.
“We have multiple warzones, and also if there is not a war zone then for other countries where diplomatic and international relations are not what they used to be.”
Adapting their offers
But how are insurers and advisers dealing with the challenges caused by the changes in the expat market?
According to Carrick: “From an adviser perspective, a robust, trusted global network is vital.
“With the ever-changing compliance rules and regulations, a global adviser needs the ability to leverage a network to support local populations.
“From an insurer perspective, they are adapting to an everchanging industry where technology is playing a key role. Insurers are now introducing innovative products such as a cashless credit card for out-patient treatment, promoting telemedicine further and improving on claims reimbursement times.
“Some niche providers are also looking at cost-effective products to introduce, such as a reduced plan design in certain low-cost countries.”
Meanwhile, Pacific Prime is continuing to follow its established model.
Palcon says: “We offer international plans that are sustainable and have portability. This has always been our model.
“Having offices strategically located around the globe helps us guide our clients with their transition, choosing the right products, and just continuing the relationship.
“We continue to keep our dedicated service and support to our clients, wherever they are in the world.”
But that isn’t an option for all insurers or brokers.
Brown says: “The frustration for a consulting intermediary or insurer for the larger multi nationals is that it is increasingly difficult if not impossible for one insurer to provide one solution that covers all locations.
“As we see the evolution of greater influence of developed economies, we are also seeing the introduction of stricter regional and local in-country regulations.”
So the industry is facing interesting times when it comes to exploring mobile populations.
Brown says: “It is an interesting, exciting and challenging time to be an insurer or intermediary firm and helping a global employer with their workforce movements and the trends and global forces has certainly brought significant change.
“Such changes have certainly resulted in difficulties and challenges.
“But it has also created new opportunities and possibilities and we will continue to adapt.”