As the UK medical insurance market stagnates, advisers are looking further afield for new opportunities. Growth figures of anything from 10 to 30 per cent a year are making international medical insurance a popular option.
“We’re seeing year on year growth of between 10 and 15 per cent and regularly come across new opportunities in this market,” says Andy Seale, regional general manager for Allianz Worldwide Care. “The UK economy may be in the middle of an economic crisis but other parts of the world such as China and India are booming. Businesses are sending more people abroad to tap into this, with benefits for those selling international medical insurance.”
As well as filling a sales gap, international medical insurance offers a number of advantages to advisers. Because of the breadth of cover, and the higher costs of treatment in some countries, premiums, and therefore also commission, are higher. Average annual premiums are in excess of £1,000 and if someone wishes to be treated in the US or China they will pay significantly more.
Commission rates are also higher than for UK domestic business. Mary Lemmons, business manager at Expatriate Insurance Services, says that international insurers tend to pay a slightly higher level of initial and renewal commission. “Renewal commission rates are much closer to the rate for initial commission. Insurers want to keep business for the long-term,” she adds.
It can also be an easier sell than its UK counterpart. Unlike UK medical insurance, which provides an alternative to the NHS, international medical insurance is a necessity for anyone working abroad. Alison Massey, marketing and ecommerce director at Now Health International, says that she sometimes sees employers making do with travel insurance but points out that this can have serious limitations. “It will cover an employee for emergencies but it doesn’t offer the options and breadth of cover available on an international medical insurance policy,” she says. “You can’t choose where or when you’d like to be treated.”
Additionally, and perhaps most importantly, with business slow, selling international medical insurance could help to strengthen your relationship with clients and protect your business from other advisers.
“You’d be surprised how many companies have one adviser looking after the UK business and another doing international, or they simply make do with travel insurance as they’re not sure where to get international cover. Promote it well and you’ll generate business “
Although moving into the international market means getting to grips with different products and insurers as well as the healthcare and legislative requirements of potentially hundreds of different countries, the insurers say it isn’t as tough as it may seem. “The UK market is technical,” says Seale. “If you’re comfortable with that, you shouldn’t have any problems with the international medical insurance market.”
Advisers already active in the international market are also relatively confident about making the transition from the domestic market. Lemmons, who is currently expanding her business into the UK domestic market, says the barriers to entry into the international market are very low. “I’ve found it tougher setting up agencies with the UK insurers,” she explains. “The international insurers are much more welcoming.”
With new products, insurers and client requirements to get to grips with, training is a must and many of the insurers are happy to help in this area. As examples, Axa PPP International has developed a dedicated broker support and sales team over the last year and Bupa International has its online Bupa Academy. “This provides fully comprehensive training on the international market, looking at areas such as the regulation, products, legal requirements and trends,” says Tim Slee, sales director at Bupa International. “An adviser can complete the foundation course in two to three weeks and be confident to advise on international business.”
Training is particularly important as the complexity of the market means there are potential pitfalls. For starters, regulation can be an issue. Kevin Melton, sales and marketing director at Axa PPP International, says that regulation can vary from country to country and from month to month. “It’s not always straightforward,” he explains. “Take Angola as an example. We received three completely different legal views on what was suitable from a medical insurance perspective. This can cause concerns regarding professional indemnity but, even where it’s tricky, there is always a solution. Insurers can provide a lot of support in this area.”
Another marked difference from the UK market is the number of insurers. While the UK market is contracting, international is attracting more and more insurer interest and there are now 15 or so offering international products.
While this potentially means more work to select a provider, Massey says that the differences between the international insurers make it easy to align them to clients. “It’s relatively easy to segment the market according to the level of cover and service provided,” she says. “This can potentially reduce your choice to one of five or six insurers when selecting cover.”
For example, some insurers offer very comprehensive cover coupled with a strong service proposition, which can make them suitable if a client wants to cover executives. Others have built their cover to be more competitive on price, which might suit a younger, potentially healthier, workforce.
Because of all the different nuances in the market, tapping into the international sector can require a significant investment of resources. For instance at the PMI Health Group, a specialist team was set up to enable it to move into this market. “You do need to keep on top of the international market,” says Chris Beardshall, global account executive for the PMI Health Group. “Things can change quickly and although the insurers have people around the world, changes aren’t always communicated quickly to them.”
Seale agrees that the move to the international market has been dominated by the larger advisers. “I’d recommend having someone that focuses primarily on international business. You could recruit a specialist and train them on the domestic market while they train you and your other employees on the international side,” he explains.
Whether you go it alone or invest in new staff to court the international market, building a book of business from scratch can be a daunting prospect. However for advisers already active in the UK market there are some shortcuts. Beardshall recommends starting with existing clients. “It’s the logical first step,” he says. “It’s very likely that some of your UK clients will have employees working overseas so tap into this group first.”
In particular, it’s worth checking with existing clients who have expansion plans, as in the current market this tends to be driven by overseas opportunities; and for clients who outsource some of their operations outside the UK, as they may be sending someone abroad to oversee it.
Once you’re up and running, word of mouth is one of the most powerful ways to build a book of business. Massey says it’s not as difficult to get the word out as it might sound. “Expats tend to cluster together so if you’ve had success with one or two companies in an area, word will get around. It may be sensible to focus on growing your book in that area,” she explains.
It’s also important to promote your activities in the international market. Melton recommends stating that you cover the international market on your website and within any correspondence with clients. “You’d be surprised how many companies have one adviser looking after the UK business and another doing international or they simply make do with travel insurance as they’re not sure where to get international cover,” he says. “Promote it well and you’ll generate business.”
With its complexities and high value for those who are unfortunate enough to have to use it while overseas, international medical insurance can be a powerful tool for an adviser, demonstrating their understanding of the market and the value they bring.
But to achieve this, it’s important to really understand the client’s needs.
Nick Boynton, principal for health and risk at Alexander Forbes Healthcare, says you often need to ask questions that wouldn’t ever form part of the client meeting when discussing UK medical insurance. “You need to know exactly where they’re based, not just the country, but whether it’s close to a major centre or in the middle of nowhere as, especially in areas such as Africa, this will help to determine what cover they need,” says Boynton. “We’re lucky as we also arrange our clients’ travel insurance so we are given details of where they’ll be based over the year.”
As well as location based information, other details that can help to shape the cover they require include: information on the type of package they want to offer, for example is it executive cover or for more junior employees; and what cover, if any, is already provided to local employees.
But, although potentially more complex, Boynton adds that this shouldn’t be a deterrent. “There are plenty of opportunities in this market and, if you’re specialising in this area and they can see the potential for business, the insurers will provide plenty of support,” he says. “It’s definitely worth a look.”