Advisers in the international private medical insurance market can look forward to a glowing future as more Britons head overseas to sunnier climes. Georgina Kenyon reports
With more people looking for careers overseas the need for international private medical insurance (IPMI) has erupted.
And because the country they are moving to may have a poor health system - or one that is not available to foreigners, IPMI could be crucial.
This is particularly true in countries where medical insurance is required by the government.
Peter Rousseau, business development director of InterGlobal, says the market is huge, with about 30 million expatriates of all nationalities worldwide. And most of the business is made through intermediaries.
He says: "About 80% of all IPMI business comes from advisers. Independent statistics project that the market will increase in the next five years from US$3bn to US$7bn."
Gulf states
The Middle East, and in particular the United Arab Emirates (UAE), is forcing the growth in the IPMI market as the UAE government requires expatriates to provide proof of medical insurance cover when applying for residency permits. Several gulf states are expected to follow.
Another country proving lucrative for the IPMI sector is China.
Leslie Smith, chairman and managing director at Medibroker, says today's technology makes IPMI very attractive.
He explains: "Clients abroad are now far more aware of the need to have active IPMI and of what such plans can do for a family or company. Claims may be handled today online and crisis management administered at vast distances, very quickly, by the best medical teams available."
However, Smith says that offering advice to expatriate clients wanting IPMI "is not something for the naive, untrained or ill-informed adviser".
Especially since what is on offer could differ immensely. Some IPMI plans include evacuation, chronic conditions or terrorism cover while others do not.
Some will not cover local nationals but only expatriates, which also can present problems - making advice essential before taking out IPMI.
This provides plenty of opportunities for intermediaries, believes David Pryor, managing director of MediCare International.
He says: "The opportunities for advisers are considerable, as virtually all research into the IPMI market shows that only 50% of expatriates are covered. With the costs of a broken leg and a short hospital stay amounting to a full year's premium for many, this is simply not a risk worth running."
Expats
However, Pryor is cautious about the market growing, saying: "Yes, there is growth but it is hard to be precise. There are at least four million expats worldwide and some 400,000 emigrate annually.
"However, a high number return after two or three years. Overall, we estimate that this is a slowly increasing market, growing by perhaps by 1% per annum."
The biggest market for IPMI is in western Europe, the Middle East and North America. According to statistics from MediCare International, working expatriates are mainly in Europe, the US, Middle East and the Far East while retired people tend to be in Australia, Florida, Canada and southern Europe.
The internet is proving the most effective sales tool for advisers. While product distribution remains primarily through face-to-face sales, the internet is becoming a major promotional tool for many advisers due to it being fast and inexpensive.
For successful sales of IPMI, however, some obstacles need to be overcome. Andrew Apps, director of global sales and business development at Goodhealth Worldwide, says these include local licensing issues, currency exchange, distribution, cultural differences and insurance understanding.
"The adviser needs to carefully select his market rather than using a scattergun approach to marketing and to understand the local cultural differences that are often overlooked, what is available locally, and who the market players are, as not all IPMI firms are global players," Apps explains.
"The key for any adviser is to work with their provider, who will often have many years of experience in their chosen market," he adds.
However, the fact that the IPMI sector is a small market seems to be the major hurdle when selling the product.
Pryor says: "IPMI is a niche market for many intermediaries, which in itself presents different problems when advising, whether this is writing policies for small corporate groups or individual clients directly.
"As a result, many would consider using a packager or specialist 'super broker' who specialises in this area."
However, as more and more people continue to relocate abroad, PMI advisers are increasingly recognising the opportunities the IPMI sector is offering.
Because while PMI will remain their core business IPMI could offer them a new and relatively untapped source of customers, which can complement their existing business. And to ignore that would be foolish.
