The international private medical insurance (IPMI) market has undergone some drastic changes over th...
The international private medical insurance (IPMI) market has undergone some drastic changes over the past few years and these developments look set to continue. Products are becoming more flexible and major providers in the market are joining forces to deliver an efficient international service.
IPMI is an expensive commodity, so it is no wonder that customers often opt for minimal cover, to help push premiums down. But more customers are realising that IPMI can no longer be regarded as a luxury product. According to PPP healthcare, treatment for a fractured wrist in Portugal costs almost £3,000, reconstruction of a knee ligament in Austria costs over £9,000 and having an appendix removed in Greece costs over £2,000. Faced with costs such as these, more UK citizens living overseas are beginning to see IPMI as an essential purchase. This evolving demand has led providers to try and fill in the gaps traditionally found in IPMI products, and some providers are now delivering more comprehensive cover.
Cover for chronic conditions is one of the key areas currently being developed by UK IPMI providers. Unlike US products, where chronic conditions are included as standard, UK providers have been slow off the mark. IPMI products have for too long reflected the cover traditionally found in standard PMI products which have until recently relied on the NHS to provide basic health services and treatment for chronic conditions. With most countries offering little or no State provision, expatriates can find themselves with inadequate cover for conditions that are most likely to cause them to seek medical advice.
David Pryor, director of ExpaCare, says that covering chronic conditions is of vital importance to IPMI schemes. "Larger UK providers have historically dealt with IPMI in the same way as UK PMI, which relies on the NHS to treat chronic conditions. Customers seeking treatment abroad can not expect the luxury of state provision and it is unfair that customers buying an IPMI product should fail to receive long-term treatment," he says.
But to say that all UK providers have failed to pick up on the importance of covering chronic conditions would be inaccurate. ExpaCare, for example, has been covering chronic conditions for 17 years, and Cigna International has provided cover for the past eight years. PPP healthcare also provides chronic condition cover on some corporate IPMI schemes and according to the company it is set to continue evolving international products to cover the increasing needs of its customers.
Sheldon Kenton, director of international sales and client management at Cigna International, believes that more providers will soon be following suit. "Covering chronic conditions is a big issue at the moment in IPMI. There have always been gaps in coverage, such as restrictions on outpatient coverage and limits on maternity leave. We have been covering chronic conditions for the past eight years and it is time for other providers to do the same," he says.
BUPA is also looking to include chronic conditions on its IPMI schemes. Although no product has as yet been launched, the provider is confident that chronic conditions will be covered on a new product due for launch before summer 2001.
JP Clarke, business communication executive at BUPA, says the move was due to the UK market moving more towards the US model. "We are considering having chronic condition cover as part of a new product which is currently under development. I think we will see more products including chronic condition cover as the market becomes more like that seen in the US, providing more complete cover," he says.
Goodhealth Worldwide is also following this trend and is offering cover for chronic conditions as an optional module. Paul O'Sullivan, sales director at Goodhealth Worldwide, says the move towards providing more comprehensive cover reflects the changing attitudes and expectations of IPMI customers.
"More companies are now offering cover for chronic conditions, as add-ons or, as we provide, an optional module. I believe this will be a key feature for cover in the future, especially as there is an ageing population. Customers are becoming much more sophisticated and know exactly what they are looking for in cover, so the challenge for providers is to have less gaps in cover," says O'Sullivan.
Alternative medicines have also become part of the standard cover offered by most IMPI providers. BUPA offers a £3,000 outpatient limit for acupuncture, chiropractic, herbalist and osteopathy treatment on both its Lifeline Classic and Lifeline Gold schemes. PPP healthcare provides maximum cover of £300, with £20 excess, for acupuncture, chiropractic, homeopathy and osteopathy treatment with its Comprehensive and Prestige packages. Goodhealth Worldwide and Cigna International also offer a full refund for alternative treatments and Exeter Friendly Society provides four levels of cover on its Interplan and Interplan France schemes.
Other providers offer slightly less comprehensive cover for such treatments. International Health insurance Denmark, for example, offers £40 per consultation for acupuncture, £35 towards dietic guidance, speech therapy, osteopathy and chiropractic treatment; and Norwich Union Healthcare offers a full refund on a range of treatments on its Global Care Plus scheme, but only with specialist referral.
Another major development in the IPMI market is the growing number of major players teaming up to provide innovative products and improved service to customers. BUPA formed an alliance with Zurich Life in August 2000, to boost product and service levels. The move was aimed at the insurers' common customer base international employers sending staff overseas on assignments, individual expatriates and their families and high net worth individuals.
The success of this alliance has lead to BUPA joining forces with Old Mutual Healthcare in March 2001 to deliver a new international healthcare product called Worldwide CareNet. Old Mutual Healthcare has a 40-year history and is a major player in South Africa, giving BUPA valuable knowledge and experience of this particular market. The new product range is aimed specifically at South African companies and individuals living and working outside southern Africa, either in other parts of Africa or around the world.
Clarke says that more strategic alliances are occurring in the IPMI market as it helps to improve distribution on an international basis. "More providers are considering teaming up on a distribution level to increase distribution around the world by pooling each other's resources," he says.
The IPMI market is definitely evolving and developments in the industry demonstrate the strength and steady growth of its customer base. There are many contributing factors to this growth easier and cheaper access to countries through improved transport services and the increase of businesses basing new offices around the world, for example.
O'Sullivan says that particular growth can be seen in Europe and the Middle East. "There has definitely been much growth in the market over the past couple of years. There is more mobility in the EC as it is easier to travel and work in Europe. We are also expecting extensive growth in the Middle East as the Saudi Government has made private health insurance compulsory. Other areas of the Far East are also going through huge periods of growth as more businesses set up out there," he says.
Kenton says that this new mobility has changed the travel patterns of expatriates. Companies can now afford to let employees travel more frequently, so customers are more likely to live and work in several countries, rather than stay in one. "The type of people being sent overseas has dramatically changed over the past five years. Expatriate assignments have become more rotational, so clients are moving from one country to the next instead of staying in a particular place for a long period. Expatriate movement five years ago was much more static," he says.
The growth of the internet has also had a positive effect on the international market. Providers such as ExpaCare, which has a worldwide client base, with less than 25% British customers, have found that the internet is becoming an increasingly useful tool for accessing new clients. Pryor says: "Many countries in the world are not familiar with health insurance schemes and the internet makes it much easier for them to access cover. IPMI is a vast market and I do not think that many UK providers have fully capitalised on it yet."
As technology works to improve global communications, movement between countries is set to increase over the coming years. Kenton believes that technology will also be key to helping improve service and distribution levels of IPMI, making the industry more efficient on an international scale. "Technology will undoubtedly have a huge part to play in the future of service delivery in the IPMI market, I do believe that electronic claims handling will develop quickly over the next 12 months," he says.
There is no doubt that the IPMI market looks healthy. It seems likely that more providers will follow the handful of companies that are already providing cover for chronic conditions. It also appears that more companies will form alliances in a bid to improve both service and product levels. These new developments illustrate an evolving market. With new technologies also working to increase levels of travel and communication throughout the world, future demand for IPMI looks set to grow.
Kirstie Redford is senior staff writer
