Post Covid demand for international PMI is surging again, but Sam Barrett says corporate requirements are changing
With appetite for business travel and overseas assignments back to pre-pandemic levels, it’s hard to believe that most of the world was in lockdown just a few years ago. But, while international medical insurance (IPMI) sales are back with a vengeance, insurers are having to adapt to a shift in customer requirements.
Demand for IPMI is strong according to Sebastian Judez, global head of product and proposition at Axa – Global Healthcare. “We’re seeing double digit growth,” he explains. “The pandemic has made people more aware of the need for cover, especially when they’re abroad. It’s a societal development that’s opened the way for IPMI.”
And with more companies looking for overseas expansion, this appetite for cover is unlikely to abate. Valentina Rocchi, senior director, integrated and global solutions at WTW, says that 80 per cent of multinational companies expect the expatriate population to increase further this year. “Geopolitical instability is causing employers to shift away from certain regions but the increase in internationally mobile employees and hybrid expat assignments is leading to greater demand for international medical cover.”
Destination detail
These geopolitical influences mean that several regions and countries are less popular destinations for business travellers. “In Asia, we’ve seen Hong Kong being replaced by Singapore for expats and, following restrictions during the pandemic, the Chinese market isn’t as strong as it used to be,” explains Alex Bender, global head of client and broker relationship management – health at Allianz Partners.
Some regions remain as popular as ever though, including the US, South East Asia and the Middle East. As an example, Adam Harding, divisional director international at Howden Employee Benefits & Wellbeing, points to the Neom project in Saudi Arabia, which is building a huge new city in the desert. “The government has had to loosen up business regulations to encourage people to go out there and work on the project,” he adds.
Cover change
Alongside shifts in destinations, insurers are also reporting different requests for cover. Changes in the type of person travelling for work means that Judez has seen increased demand for short-term coverage. “There are fewer long-term expats now. Instead, as a result of the pandemic, there are more digital nomads. This has pushed up demand for short-term comprehensive cover.”
IPMI is also appealing to organisations wishing to provide their employees with richer benefits. There are several drivers behind this shift from domestic to international cover, as Rocchi explains: “Increased demand and longer waiting times for medical treatments mean there’s a greater need for medical cover that goes beyond traditional domestic cover. These plans can also help to attract and retain key talent.”
Digital demand
Internationally mobile employees – and their employers – also expect their plans to include a broader range of benefits. Digital services such as GP helplines and mental health support have always been a valued benefit on international plans, providing expats with the ability to talk to a medical professional with the same language and culture, but their popularity has rocketed post-pandemic.
Anthony Cabrelli, managing director at Bupa Global, says its global virtual care services are in high demand. “We’ve seen nearly a 30 per cent increase in usage year on year and expect that will continue to rise,” he adds.
This digital approach is also influencing other aspects of the product proposition, especially around payment. As an example, in February, Axa – Global Healthcare launched the rollout of its virtual healthcare payment card. This gives employees a digital wallet which stores policy information but also enables them to pay for eligible outpatient treatment. “Having to claim back money for lower cost items such as drugs at the pharmacy can be a major pain point for employees, especially when different currencies are involved. This improves the user experience,” says Judez.
Benefit expansion
As well as harnessing the power of digital services, insurers are also responding to employer demand for new areas of cover. “A lot of clients are asking about diversity, equity and inclusion (DEI), both in terms of the insurers’ agendas but also the benefits they offer,” says Harding. “Plans can now include cover for areas such as menopause, gender reassignment and fertility. This can make an international plan more comprehensive than a domestic one, especially in countries where these areas of health aren’t recognised.”
Possibly as a reaction to the chaos that was seen at the beginning of the pandemic, benefits that focus on the employer’s duty of care are also gaining traction. Rocchi says that employers want to be sure there is support for employees working overseas, especially where they find themselves in areas affected by conflict or natural disasters. “In these cases, it’s essential to have assistance services, including evacuation, for medical emergencies, but also adequate mental health support,” she adds.
Regulatory challenges
Regulation is a challenge for insurers dealing with one or two sets of rules but it can become a real headache where hundreds of regulators are involved. “Many countries are tightening the rules around healthcare, including in popular expat destinations such as Saudi Arabia and Bahrain,” says Bender. “As clients increasingly want a global proposition, this means insurers often work with local partners to ensure cover
is compliant.”
Adapting to these changes requires close attention to detail from insurers but also brokers. Harding says that where a client is concerned about the practices of their supply chain, it requires transparency around the activities of an insurer’s fronting partners. “More organisations want to be sure the companies they deal with share the same ESG credentials. Some are more focused on ESG than others,” he says.
Financial pressures
Cost is also an issue, with broader inflation adding to already eye-watering medical treatment price increases. WTW’s 2024 Global Medical Trends survey reported a 10.7 per cent increase in the cost of medical care in 2023 and, while it expects factors such as a fall in global inflation and a drop in demand for medical treatment after the post-pandemic spike to ease inflation, it forecasts a rate of 9.9 per cent for 2024.
It’s positive that inflation appears to have peaked but Harding says insurer sentiment is fuelling some significant price hikes. “Insurers are getting more risk averse,” he explains. “They don’t want the poor risk so we’re seeing more instances of insurers factoring in claims performance across their book-rated business. This can mean increases of up to 45 per cent based on claims. Alongside this, we’re also seeing some aggressive pricing where insurers are looking to gain business. There’s a lot more movement.”
Technology fix
Price increases may be an unpleasant side-effect of medical insurance but greater use of technology may help to ease some of the pain. Bender says that where costs are high, digital services can be used to triage employees. “Some providers are looking to maximise revenue and will send a patient for lots of tests. This can be controlled by using a video GP consultation,” he adds.
As technology advances, its ability to control costs will
become increasingly sophisticated. Cabrelli explains: “AI is going to play a vital role in empowering customers to look after their own health, enabling earlier interventions before more serious symptoms arise.”
To illustrate this, he points to an AI-powered eye test that’s offered to Bupa’s business customers in Australia. This can spot health issues such as diabetes, aneurysms and hypertension much earlier, when they’re easier – and cheaper – to treat.
And, with more people expected to work overseas, this type of innovation will ensure international medical insurance remains a relevant and affordable proposition.
