As the world begins to open up for business again, the international medical insurance (IPMI) sector is watching to see how the pandemic will affect appetite for overseas assignments. After adapting cover to meet expat needs during the pandemic, further change is expected.
When the World Health Organisation (WHO) declared Covid-19 a pandemic, insurers moved quickly to ensure members had the cover and care they needed. Pandemic exclusions were lifted so treatment for Covid-19 could be accessed and new covers added. For instance, Allianz Partners added a symptom checker and, when they became available, William Russell extended cover to include Covid-19 vaccinations.
Tele time
Social distancing during the pandemic also meant that telemedicine came to the fore, with insurers seeing demand for services such as virtual GPs and online counselling escalate. “The pandemic really kickstarted the use of telemedicine,” says Inez Cooper, managing director and co-founder of William Russell. “It’s a really interesting development as members can access expert support and advice but it also enables insurers to offer more directional care. This is positive for all parties.”
As lockdowns were announced and borders closed, insurers had to respond to the disruption many members were experiencing. Peter Gibbons, global head of individual and small groups for Allianz Partners, Health, explains: “Some members were travelling from their expat country of residence and found themselves unable to return so we extended the period for ‘out of region’ cover so they could continue to access healthcare during that time.”
Perhaps because of all these adjustments, Adam Harding, divisional director, international benefits at Howden, says that some insurers struggled from a service perspective. “They all started well but there were some issues,” he says. “It’s understandable: employees were working from home, where there’s much less opportunity to share ideas and information on claims. Many will have lost staff during the pandemic too, as claims levels dropped. Things are returning to normal again.”
Claims lockdown
While the provision of private hospital facilities to the NHS to fight Covid-19 meant elective treatment ground to a halt in the UK during the first wave of the pandemic, it was a more mixed picture around the globe with many countries still providing treatment.
Although private treatment could still be accessed, insurers saw claims volumes fall. “There’s been a reduction in claims over the past couple of years as a result of the sharp decrease in global travel,” says Gibbons. “There’s also been a reduction in elective and non-urgent procedures during that time as providers focused on treating Covid-19 cases. Going forward we expect to see a lot of that pent-up elective treatment starting to take place.”
Delaying treatment could prove costly for insurers. While some musculoskeletal and joint issues may have resolved themselves over the pandemic, others will now require more extensive treatment. Similarly, missing regular monitoring may mean that chronic conditions have worsened, requiring additional treatment. “There will also be missed diagnoses for serious conditions such as cancer and no one really knows what the long-term implications are for Long Covid,” adds Cooper. “Insurers need to be cautious on pricing; the next few years are very uncertain.”
Pandemic pricing
These concerns are already appearing on pricing. Harding says that higher renewal rates are coming through, with premiums up between 9 and 15 per cent depending on insurer and location. “It’s driven by medical inflation,” he says. “Healthcare providers have had to invest in additional PPE and signage and implement social distancing. This pushes up the cost of treatment.”
Iain Laws, CEO of Towergate Health & Protection, agrees. He says it’s a very uncertain landscape from a pricing perspective. “There were fewer claims during the pandemic but insurers will also have picked up some Covid-19 claims, which can be expensive. These will put pressure on costs.”
Fraud has also been an issue during the pandemic, with William Russell discovering more than $100,000 of fraudulent Covid-19 claims during the pandemic. This Covid-19 fraud took the form of phantom claims, with members overstating the severity of an infection; double claiming, where identical claims were lodged with two or more insurers; and collusion claims, where members worked with a medical provider to falsify a claim.
Return to normality
There’s also uncertainty around future demand for IPMI, with video calls making some organisations question the need for face-to-face meetings in other countries. “It’s still not clear whether employers will be sending everyone back,” says Laws. “Employers are taking more considered risk assessments before sending people overseas. We’re not entirely out of the pandemic and there are still large parts of the world where Covid-19 is a real issue.”
Appetite for the traditional expat assignment may be more subdued post-pandemic but demand for IPMI may be driven by a new trend, as Gibbons explains: “The pandemic has highlighted the ability to work from home, which means employees can technically work from anywhere in the world. We do expect to see a rise in the number of employers seeking expat insurance for their staff.”
As well as dealing with changes in potential demand, insurers’ propositions must also cater for differences in countries’ success in controlling the virus and opening up again. For example, two years on from the WHO’s pandemic announcement, while many European countries have lifted all their restrictions, millions of people across China have returned to lockdown.
Flexible proposition
Some of the changes implemented during the pandemic will address these differences and ensure that members can access the care they need, wherever they are. In particular, Gibbons expects members to continue using virtual offerings such as telehealth, mobile apps and other digital services. “These offer convenience but they also ensure that if a member cannot access medical treatment in their location, they can still receive expert treatment and guidance,” he says. “If someone can’t access medically necessary cover, we will fly them to where they can get that care.”
Appetite for these types of digital services is likely to accelerate product development in this area too. As an example, William Russell has recently launched a personal security app, giving its members access to a helpline and real-time alerts to any issues in their location.
Future innovation
Cooper expects to see more innovation in this space. “The public perception of medical insurance is changing, with much more demand for digital services,” she says. “We want to offer more of these services, especially around mental health, which has come to the fore during the pandemic.”
As well as enriching products, Harding would like to see insurers focus on new propositions. “I’d like to see a lower cost top-up product to give greater flexibility,” he says. “Premium increases are making some employers question the need to send employees overseas plus we’re seeing more people choosing to work from home abroad. I’d like to see this type of top-up product available now; if it’s put off for another year, we’ll start to see shrinkage in the market as employers are put off by the cost of overseas assignments.”
Although some normality may be returning to the IPMI market, there’s still plenty of uncertainty around demand and future claims costs. Having adapted to the needs of members during the pandemic, focusing on their post-pandemic requirements will ensure that cover remains relevant to today’s international employee.
