QUARTERLY MARKET REPORT International PMI · 2019. 5. 4. · In association with 3 | December 2014 Quarterly Market Report | International PMI Editor David Sawers • ext.4154 [email protected]

December 2014 | www.healthinsurancedaily.com

Q U A R T E R LY M A R K E T R E P O R T

International PMI

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Quarterly Market Report | International PMI

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Keeping up to speed

As another year draws to a close, the international private medical insurance (iPMI) market is looking in as good a shape as ever.

In fact, as you can read on page 4 of this, the latest Quarterly Market Report on iPMI from Health Insurance Daily, the global iPMI market has trebled in size over the past decade – and that’s a trend that shows no sign of abating.

The sector remains as buoyant as ever, although, of course, there remain challenges and complexities to keep everyone involved on their toes.

As ever, the Quarterly Market Report features all the latest news from around the sector (pages 4-7), while there is also a round-up of all the most recent industry appointments. Check out who is on the move in the intermediary and insurer communities on pages

8-9 – and don’t forget to let us know of anyone who has recently joined or left your organisation by emailing [email protected].

Also in this issue are two insight pieces looking at key areas of the iPMI market. Premium and cost management is in the spotlight this time around (page 11), while we also ask an expert how insurer support and care management can extend beyond the obligations of the insurance cover in order to deliver improved outcomes for both individual members and their employers.

We also take a snapshot look at intermediary opinion on one of the areas of international consulting that looks set to come to the fore in the months ahead – group risk benefits (pages 12-13).

And finally, this issue also features an interview with the CEO of one of the fastest-growing brokers in the world of iPMI – Neil Raymond of Pacific Prime (pages 14-15).

I hope you enjoy this third edition of HI Daily’s iPMI Quarterly Market Report – we’d love to hear your thoughts, so please do get in touch at: [email protected].

And don’t forget to share it as a free download with industry colleagues too – and let them know they can register to receive free industry updates from HI Daily at: www.healthinsurancedaily.com/register.

Another year – and the iPMI market continues to flourish

ContentsNews Round-Up........................................................................Page 4All the latest from around the industry

Industry Appointments ..................................................Page 8Who’s moving where?

Provider Perspective ......................................................Page 10Obligations beyond insurance

Underwriting Focus ..........................................................Page 11Managing iPMI premiums

The Hot Topic ...........................................................................Page 12International group risk benefits

The iPMI Interview.............................................................Page 14With Neil Raymond, CEO, Pacific Prime

Health Insurance

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44


News

In association with

ALC Health signs claims deal with HealixInternational private medical insurance provider (iPMI) ALC Health has appointed Healix International to provide claims management and support for new and existing customers. Healix maintains medically-backed 24/7 and 365 capability via its centres in the UK, New Zealand and Singapore. The deal with ALC Health kicks in from January. Meanwhile, ALC Health is also extending its commitment to AXA PPP International as its main underwriting partner.ALC Health said that while bringing claims handling in-house would have been the cheapest option, it did not think it gave it “an edge”. Sarah Jewell, chief executive of ALC Health, said: “We believe that by partnering with Healix International we will be providing the most customer-focused claims handling service in the industry, with qualified medical personnel involved at the notification stage and proactive control and settlement throughout the process.”

Expacare and CEGA in assistance deal

CEGA, the global assistance, repatriation and claims management company, has been appointed by Expacare to support its international private medical insurance policyholders. Expacare policyholders will have access to CEGA’s 24/7 emergency medical assistance, worldwide evacuation and repatriation, cost containment and fraud investigation services. “Expacare’s medical assistance partner must not only offer value-added services for both brokers and members, they must also have a deep understanding of – and experience in – the international healthcare field,” said Beverly Cook, managing director of Expacare. CEGA also provides services to Aviva, Medicare, William Russell and WPA.

Global iPMI market now worthUS$9.8bn – and set to growAn independent industry analyst has estimated the total market for international private medical insurance (iPMI) to stand at a Gross Written Premium of US$9.8bn globally – and said that figure could be even higher.

In one of the few independent assessments that has been made publicly of the size of the iPMI market, McGrigor Group said that at the end of 2013, the market for iPMI globally, when taking into account the wider ‘definition’ of iPMI including ‘classic’ iPMI, ‘accommodated’ iPMI, and ‘regional’ iPMI, was US$9,840m.

Market analysts have struggled in the past to come up with an accurate picture of the actual size of the iPMI industry, which is notoriously difficult to analyse thanks to its sheer scale, as well as its complex and diverse structure.

But McGrigor Group, which has now published a far-reaching report on the market, said its analysis of the actual sales of some 60 players competing in the iPMI field reveals a market of US$9.8bn as of 31 December 2013.

The analyst said, though, that some observers may have a perception that the market could in fact be even larger, because they would tend to include a significant student, business and other short-term medical or travel component’ – factors that have been excluded in the McGrigor methodology.

McGrigor Group said that given the fact that the overall global private health insurance market, which is essentially US- domestic PMI plus around 20 others markets, is worth around US$1,200bn, an iPMI market of US$9.8bn could appear as a “niche” market.

However, given that the largest domestic PMI markets outside the US, namely the Netherlands, Germany, Canada and France, are sized in the US$18-58bn range in 2013, the global iPMI market then ranks as the sixth largest private health insurance market in the world.

And James McGrigor, CEO of McGrigor Group, said he believes that the iPMI market has effectively tripled over the past 10 years.

McGrigor said: “Once the sole preserve of Western corporate expatriates, iPMI’s current growth is now driven by returnees and aspirational local professionals from the Middle East, Asia and Latin America, demanding higher quality and borderless healthcare solutions.”

Analysts at McGrigor Group reviewed 60 iPMI providers in detail across seven global regions to come up with the analysis which forms part of a far-reaching report providing an overview of the size, landscape, dynamics, players and growth – historic and potential – within the global IPMI market. More details are available at www.mcgrigorgroup.com.

Source: McGrigor Group database 2013-14

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8,202m - Classic iPMI

625m - Accommodated iPMI

1,013m - Regional iPMI

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Global iPMI market, 2013

55


News

In association with

iPMI excellence on show at this year’s Health Insurance Awards

A quarter of expats ‘don’t think they need iPMI’A quarter of expats have no international private medical insurance (iPMI) cover in place because they do not think they need it, a survey has found. The poll by Now Health International reveals that many expats do not believe they need iPMI because they are currently healthy and will not fall ill. A further 29% said they have not taken out iPMI because it is too expensive, while 16.2% said if they fall ill they will pay directly for their medical treatment. The survey also found that 12% of expats thought they would be looked after by their new country’s state healthcare system. Of the respondents who already had an international health insurance plan, the services most important to them were 24 hour customer service helpline, fast service turnaround and cover for pre-existing conditions.

Confusion over cross-border advice, APFA says

New figures from UK-based trade body the Association of Professional Financial Advisers (APFA) reveal that as many as one in three advisers have clients who either reside permanently in another European state or who split their time between homes in the UK and elsewhere in the EU. Of those advisers questioned for APFA by NMG Consulting, 83% said they only give advice to those clients when they are present in the UK, hinting at a reluctance to secure the clearance needed to advise them when abroad, APFA said. Only 25% said they hold the regulatory passports required to deliver cross-border advice. APFA said that any advisers unsure of their position on cross-border advice should get in touch with it for more information.

The Health Insurance Awards is the industry event

of the year – for brokers and insurers alike

Catherine Galloway of Stackhouse Poland with Tim Slee of category sponsor Bupa Global (left) and celebrity host Russell Kane

Colin Boxall (centre) of ADVO Group from Richard

di Benedetto (left) of category sponsor Aetna

International and celebrity host Russell Kane Around 900 people attended the black tie event

Excellence in the international private medical insurance (iPMI) industry was rewarded at this year’s Health Insurance Awards, with providers and intermediaries celebrating the achievements of the sector over the past year in style.

Providers and intermediaries in the iPMI industry joined fellow professionals in the health and protection insurance industry at a gala dinner in London to acknowledge the sterling work that advisers and insurers do to help and support individuals and workforces across.

ADVO Group was named Best Group iPMI Intermediary of the Year, in a hotly contested category, judged by an independent judging panel of industry experts, that saw Jelf International and PMI

Health Group receive high commendations. Jelf International also received a high commendation from the judging panel, as did APRIL Medibroker, in the Best Individual iPMI Intermediary category which was won by Stackhouse Poland.

Provider excellence was also recognised at the event, with brokers voting Aetna International as Best Group iPMI Provider of the Year, while Bupa Global secured their nomination as Best iPMI Provider of the Year.

The event was attended by around 900 people at the Grosvenor House Hotel on London’s Park Lane. Full details, including all the winners and the photos from the evening, are available on the dedicated Health Insurance Awards website here.

66


News

In association with

Global benefit managers ‘tied up in red tape’Nearly two-thirds of global pension and benefit managers say that day-to-day red tape is hindering their strategic contribution to their company, according to a survey. Two thirds (62%) of those surveyed by Towers Watson, the global consultancy firm, claim that day-to-day operational activities are limiting their ability to add value and it gets in the way of their strategic contribution to the company. Towers Watson’s latest Current and Emerging Global Benefit Themes survey shows that three-quarters (75%) of respondents felt that there is increasing pressure for them to do more with less, suggesting they are going to have to change the way they do things if they are to create the time to focus on more value added activities. Respondents also named the UK, US and Germany as the top countries to focus on in 2015 for financial and strategic pensions and benefits review reasons, the Netherlands owing to pension legislation changes and Brazil, China and India for more operational reviews.

International arm boosts Jelf revenues

Revenues at Jelf Group’s international healthcare arm grew by 29.8% to £1.3m in the year to September. The UK-based national intermediary said that overall revenues for the group were up 8.4% at £82.6m, while EBITDA rose by 32.4% to £14.6m. Profits after tax increased by 40.4% to £6.5m. In a statement the group said its employee benefits operations continued to generate strong margins in the year to September, delivering EBITDA of £4.8m. Adviser productivity in the financial planning business, meanwhile, increased by 8.4%.

Canadian mother faces bankruptcy over uninsured US$1m medical bill

A Canadian mother who thought she would be covered by insurance has to pay US$1m in medical bills after she unexpectedly gave birth in the US.

Jennifer Huculak was nearly six months pregnant when her waters broke while on holiday in Hawaii in October 2013. After a lengthy hospital stay, Huculak’s daughter was born prematurely and required a two-month stay in a neo-natal intensive care unit.

As a result, she is facing more than US$900,000 in medical bills and has been told the costs will not be covered by insurance. Before her trip, Huculak purchased Blue Cross insurance and

her doctor had said it would be fine for her to travel despite having previously suffered a bladder infection and briefly haemorrhaging.

She said her family now faces bankruptcy: “We were told we were covered. We paid our premium. We obviously still feel that Blue Cross should cover the bill.”

The total bill of US$950,000 included more than US$160,000 for Huculak’s hospital stay and US$40,000 for a medical evacuation, she said. The rest of the cost went to care for Huculak’s daughter.

Her insurer Blue Cross denied her claim, citing a pre-existing condition. The woman’s doctor sent a letter to Blue Cross confirming that her pregnancy was stable at the time of her holiday, but the claim was still denied.

Huculak said she wants to warn people that “when you think you’re covered, you may not be.”

She said if a doctor told her she had a high-risk pregnancy, she would not have travelled to Hawaii.

Allianz Worldwide Care announces 100 new jobs for Ireland on back of IGO success

International health and life insurer Allianz Worldwide Care is to create 100 new positions in Dublin and move into a number of newly purchased offices in Park West Business Campus, Dublin 12, where its Irish branch is currently based.

The new roles will span the entire business which is focusing on claims, helpline and client services, medical services, underwriting and pricing.

The new jobs follow successes in the Intergovernmental Organisation sector, which accounts for a significant proportion of the health and life insurance company’s client portfolio. The 100 new jobs will add to the 700-strong workforce currently

operating at Allianz Worldwide Care’s operational hub in Park West, Dublin. The company has already created 74 new jobs this year and the recruitment drive for the newly announced 100 additional jobs is now underway.

Ron Buchan, chief executive of Allianz Worldwide Care, said: “The investment in the offices at Park West, together with the creation of these new roles, sends clear signals about our confidence in Ireland’s economy.”

Allianz Worldwide Care was recently recertified as having won the Excellence Through People Award by the National Standards Authority of Ireland.

Case underlines need for comprehensive cover

77


News

In association with

Willis completes Swedish acquisition

Willis Group, the global risk adviser, insurance and reinsurance broker, has completed its acquisition of a 75% controlling stake in Swedish adviser firm Max Matthiessen. The deal, which was first announced in May, creates the biggest risk adviser and broker in the Nordic region and the largest international adviser in Sweden. Max Matthiessen advises on retirement savings, health plans and personal insurance. It has 420 employees in 23 locations across Sweden. Willis Sweden and Max Matthiessen have held a strategic partnership since 2009. The Max Matthiessen brand will be retained and will run alongside Willis Sweden.

International SOS

launches Ebola advice app

Medical assistance and travel security risk services company International SOS has released a new mobile app designed to share its health and travel information on Ebola. International SOS said it has made the app available on iOS and Android smartphone devices and it provides instant access to the company’s dedicated Ebola website. The app includes news and developments on the Ebola outbreak, maps of the affected areas, a video on what business travellers need to know, plus a live Twitter feed. International SOS has clients from more than 700 locations in 89 countries,

56% The proportion of multinational

employers that have a global health promotion strategy in place

52% The proportion of multinational

employers that measure outcome of wellbeing strategies

Multinational employers ‘globalising’ approach to health and wellnessAn increasing number of multinational companies are ‘globalising’ their approach to employee health and wellness, according to a major piece of research.

More than half (56%) of the 1,041 multinational employers surveyed by Buck Consultants at Xerox, the global consultancy firm, now have a global health promotion strategy in place, up from 34% in 2008.

Among the main reasons for not having a global strategy are differing cultures, laws and practices in different locations.

The survey – the sixth of its kind carried out by Buck at Xerox – shows that while the main reasons for multinational companies to implement wellness programmes are to reduce sick leave and presenteeism, improving workforce morale and engagement are factors that are becoming increasingly important, especially in Europe and Australia.

However, managing healthcare costs remains the top objective in the US, while improving workplace safety is the priority in Asia.

Almost a third (29%) of responding organisations have a fully implemented wellness strategy. But while this number continues to increase every year, 62% of organisations have had their wellness strategies in place for only five years or less, showing that they are still relatively new for many employers, Buck at Xerox said.

The survey also found that increasingly, companies see the value in making spouses, domestic partners and children eligible for health promotion and wellness programmes and associated incentives. More than two fifths (62%) of programmes now include spouses, while more than half (52%) include domestic partners and 43% include children.

However, too few companies properly measure outcomes when it comes to the success or otherwise of their wellness programmes, Buck at Xerox said. While a growing number of respondents to the survey (52%) report measuring outcomes (up from 36% in 2012), the majority of US respondents for example (59%) indicate that they do not know if their strategies are reducing healthcare cost trend.

Depression higher up corporate healthcare agenda in UK than other countries

Mental health issues such as depression factor much more prominently in workplace wellness programmes in the UK than in other countries around the world.

Martyn Anwyl, head of health and productivity at Buck Consultants at Xerox, said that while for most other countries globally, depression does

not feature in the top five drivers for implementing wellness strategies, there is a “growing awareness” in the UK of the impact to businesses that mental health issues can have. Employers there are increasingly aware of the need to address mental health issues in the workplace through targeted campaigns, support services and manager training.

In association with

IMG Europe appoints sales director

New role for former Globality Health exec

International private medical insurance provider IMG Europe has appointed James Dwyer as sales director. Dwyer (pictured) succeeds Carl Carter, who recently joined travel insurer Voyager. In his new role, Dwyer will be responsible for driving sales and marketing strategy, new business development, and

management of key accounts. Dwyer brings over 12 years of experience in international medical insurance sales and account management, and holds an IF7 insurance certification. In his previous role with Globality Health, Dwyer was responsible for key accounts and business development in Asia and Europe.

Medibroker appoints business development director

David Castling joins from Engage Mutual

Medibroker, the specialist international private medical insurance brokerage, has appointed David Castling to the position of business development director. Castling (pictured) joins the firm having held senior sales management roles with Engage Mutual and National Friendly and 12 years in intermediary financial services.

Reporting to Elodie Rambert, CEO of April International, his remit will be to develop new partnerships and distribution routes.

ALC Health makes appointment to develop business in Southern Spain and Portugal

Newly created role at iPMI provider

International private medical insurance provider ALC Health has recruited Karen Bailey in a newly created role to develop the company’s business in Southern Spain and Portugal. With over 22 years’ experience in the PMI industry both as an insurer and intermediary, Bailey has a “strong connection” with the region, having owned a house in Spain for the past 11 years, ALC Health said. Stephen Godbold, managing director of ALC Health, added: “We are delighted that Karen has joined ALC Health. Her experience as a specialist PMI intermediary brings not only a wealth of knowledge to the business but a real understanding of what our customers and brokers actually want and how to deliver the service they demand.”

Collinson Group appoints head of marketing for insurance and assistance

Former Cigna exec takes on new role

Collinson Group has appointed Graham Hollebon as head of marketing for insurance and assistance. Hollebon (pictured) joins Collinson Group with 26 years of experience in the insurance industry, most recently gained from his previous role as head of direct for Cigna Insurance in the UK. Prior to this, he has also held senior

roles at FirstAssist Insurance, FirstAssist Legal Protection and More Than Insurance, as well as several marketing and business roles at RSA. Reporting to David Evans, managing director, insurance and assistance, Collinson Group, Hollebon will develop and execute the marketing strategy for Collinson Group’s wholesale insurance and assistance brands, Astrenska and Intana as well as supporting overall brand awareness, business growth and client retention.

Punter Southall Health & Protection Consulting appoints specialist iPMI adviser

Consultant sets sights on growing iPMI market

Punter Southall Health & Protection Consulting (PSHPC), the specialist adviser, has appointed Audrey Rowley as a senior consultant to head-up the development and growth of its international healthcare portfolio. An international private medical insurance specialist with more than 10


Appointments

Industry appointmentsPeople on the move

In association with

years’ experience in both the provider and advisory community, Rowley (pictured) has worked at both Lorica and William Russell. Soraya Chamberlain, PSHPC’s head of healthcare consulting, said the trend for global expansion is “ever-increasing” and with it comes the challenge of providing suitable and compliant benefits to employees working overseas. She said: “At PSHPC we take pride in giving our clients truly professional, expert and creative consultancy, working with them to design appropriate international benefit solutions. For that we need experienced and knowledgeable advisers, and Audrey brings both to the position in abundance.”

Globality Health appoints CEO

iPMI specialist names successor to von Kiaer

Munich Health, the health segment of Munich Re, has appointed Roman Beilhack as new CEO for Globality Health. Belhack (pictured) succeeds Martin von Kiær, who left Globality Health, the international health insurer with a special focus on expatriates within Munich Re, earlier this year. A spokesman for Globality

Health said Beilhack will lead a development programme in which the major objectives are to safeguard the organisation’s future operational excellence and to provide superior service towards clients, sales and cooperation partners. Beilhack has been with Munich Re since 1998.

IMGEurope’s Carl Carter to join travel insurer Voyager as director

New role for AIMIP chairman

Carl Carter, the managing director of IMGEurope, is to leave the international private medical insurance provider to join travel insurer Voyager Insurance as director. Carter, who is the current chairman of the Association of International Medical Insurance Providers (AIMIP), joins Voyager this month.

He will remain chairman of AIMIP as he takes on the new role. Voyager Insurance provides bespoke travel insurance schemes to insurance brokers, third party intermediaries and affinity groups. These include tour operators, travel agents, ferry companies, affinity groups and online insurance specialists. Its product offering spans the full range of travel insurance from single-trip, long stay and annual multi-trip to winter sports and European vehicle breakdown assistance. In addition to his most recent role at IMGEurope, Carter’s 20 years in the insurance market has seen him in a number of managing director or sales & marketing director positions for brokers, international assistance and a claims administrator.

Now Health International appoints Hong Kong based chief commercial officer

Senior appointment at iPMI provider

International health insurance provider Now Health International has confirmed the appointment of Damian Delaney as chief commercial officer. Delaney, who is based in Hong Kong, has worked for a number of blue chip brands in insurance, banking and wealth management, including local, regional and

global roles across product development, sales, distribution, corporate strategy, new market entry as well as mergers and acquisitions. His most recent role involved collaborating with a specialist digital marketing agency to provide digital strategy, consulting and commercialisation services to their insurance and banking clients in Asia, covering both direct–to-consumer as well as intermediated distribution.

Avanti appoints head of marketing

Travel and health insurance provider will target TV, radio and outdoor ads in 2015

Avanti Group Solutions, a group of travel and health insurance companies based in Braintree, has appointed Laura Maddison as head of marketing. Maddison will manage marketing, PR and advertising on and offline. Maddison has worked in the insurance sector since 2008, including a role at the largest independent insurance broker in Northern Ireland. Avanti is planning to develop its marketing remit in 2015 with a focus on TV, radio and outdoor advertising as well as new online marketing activities. Glen Smith, group chief executive, said: “Look out for some exciting new advertisements – our marketing efforts reflect our uniqueness. We are continuing to develop our products to offer our clients high-value benefits at an affordable price.”

Now Health recruits Beijing director

General manager for provider’s newest branch

International health insurance provider Now Health International has recruited Patrick Meng as director and general manager of its newest branch in Beijing. Meng has over 15 years’ experience in the China market, working both with local Chinese and international companies. During the last seven years, he

established a travel and health business module including the set-up of branches in Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu and Chongqing.


Appointments

9

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10


Provider Perspective

iPMI protection - Widening the care net

We all know that accidents and disease can have a devastating effect. For example, 2012 saw over 14 million cancer diagnoses and 8.2 million cancer-related deaths globally according to Cancer Research UK. Other, more day-to-day diseases can also be catastrophic. The World Health Organisation indicates that flu infects 5%–10% of adults and 20%–30% of children annually, resulting in around 3 to 5 million cases of severe illness, and 250,000 to 500,000 deaths.

Health problems like flu can also affect employer productivity. A study published by the National Centre for Biotechnology Information in the US found that between 1.5 and 4.9 working days for each flu case were lost across the developed world to flu alone.

Providing access to the right treatment is central to any insurance programme but, whatever the medical problem, insurers should also make the process of accessing care hassle free and provide the necessary support to patients post-care. Insurers support members either side of their treatment in different ways with technology and personal interaction making a real impact.

Technological InnovationTechnology has made the process of finding appropriate treatment facilities quick and easy; particularly important for employees in more remote or unfamiliar locations. Innovations of this nature can both speed up and simplify the process of accessing care.

Mobile applications, for example, streamline the process of identifying a medical facility with some apps providing names and addresses of providers and map technology to easily locate and calculate the distance to each. Apps may also indicate which providers offer direct settlement so members don’t have to pay in advance for treatment, and can link up to the user’s digital calendar to record any medical appointments.

Personal InteractionPost-treatment support can be crucial to rehabilitation. Aetna International, for example, has a dedicated team of doctors, nurses and other clinicians who provide crucial post-treatment support to recovering members.

With practical experience in a broad range of medical specialties the team is able to provide invaluable support including proactive contact from clinicians to members during their recovery period. Support is available at the point of diagnosis, throughout treatment and during the recovery period. Members are helped to fully understand their health condition, the treatment they have been prescribed and their doctor’s follow-up recommendations. Being more aware of their medical circumstances allows individuals to make more informed choices about their treatment.

Recovering members are also offered health coaching and wellness advice, which can be particularly useful with

chronic conditions. A number of effective tools are used in this process, including motivational interviewing. Instead of simply recommending more exercise or better eating habits, members are encouraged to agree the changes they are willing to make which increases self-motivation and usually yields better results. For many, moving from thinking about a wholesale change to their lifestyle to contemplating simple steps to healthier living can make a huge difference.

At Aetna, the same team also offers pre-trip assistance before an expat moves abroad to make sure the health essentials are in place for individual members. Assistance ranges from pre-trip planning to obtaining the right prescription medications. The team can also source medical equipment and identify specialty medical providers.

International health insurers can improve patient experience and outcomes by providing pre- and post-treatment support services, from finding an appropriate medical facility to managing conditions once treatment has taken place.

Employers, brokers, medical providers, patients and insurers are all investors in the healthcare process. Outcomes for both individuals and groups as a whole can be improved by all parties better understanding the issues involved and working together to make improvements at every stage of the process. Partnering in this way, and linking insurance and wellness issues, can ultimately help employers improve workforce moral and boost productivity.

Accidents and diseases of any kind are unwelcome and when problems strike abroad, distress levels can be exacerbated. David Healy, general manager for Europe at Aetna International, examines how insurer support and care management can extend beyond the obligations of the insurance cover and deliver improved outcomes for both individual members and their employers.

In association with

11


Underwriting Focus

Managing iPMI premiums

Three interrelated factors are the main influencers of premium levels in the IPMI market: medical inflation; claims experience; and insurers’ costs.

Medical Inflation Medical inflation is a global issue. Drug and treatment innovations can cause inflationary pressure and when expensive new drugs or medical treatment innovations are launched into the marketplace, medical inflation can be pushed higher still.

More infrequent, but no less dramatic, is the inflationary effect of a new medical facility. The launch of a new hi-tech hospital in Dubai that quickly becomes a popular expatriate destination, for example, can spike insurer costs in that area and exert pressure on renewal rates. Insurers look to minimise the effect on premiums of this every day by encouraging members to use medical facilities in its network of providers, if possible.

Claims experience A poor claims experience across individual groups, products or regions can reduce underwriting profits and put pressure on rates. Raising premiums can help to align profits but tackling the root cause of the issue often leads to a more satisfactory outcome for all. Introducing higher co-pays, encouraging the use of networks and implementing targeted wellness programmes are strategies that can make a big difference.

Staff in schemes with higher co-pays are encouraged to take more responsibility for their own insurance costs. A lower incidence of smaller claims is often the result which reduces the administrative burden and cost of managing a scheme for insurers.

Educating staff on how to best use their insurance cover can have a significant impact on moderating premiums. Using medical facilities within networks, for example, helps insurers to manage the cost of treatment, improves communication between all parties and reduces insurer administration. The standard of care experienced by members is also likely to be more certain so insurers encourage the use of in-network facilities wherever possible.

Where schemes are experiencing a high level of claims, applying sophisticated data analysis techniques can often highlight a specific issue that needs to be addressed. Claims emanating from a mining client of Aetna International in Sierra Leone, for example, were analysed. Costs were then reduced through a programme of vaccinations, education around specific diseases and the introduction of an on-site nurse. The result was an improved claims experience, fewer infections and a more productive workforce for the client.

Insurer costs Technology has helped insurers manage costs whilst maintaining, and even improving, customer service. At Aetna we have developed an application for smart devices that allows members to locate their nearest medical facility and quickly make contact to book an appointment. A new, secure online claims facility means members can avoid the use of paper altogether by completing an electronic form from their computer or mobile device. With the added benefit of pre-populated fields that allow members to view important historical information such as reimbursement payments, we can see how technology has helped to take the hassle out of healthcare for members as well as streamlining insurers’ processes, leading to cost savings.

Of course, an insurer’s expenses are affected by a wide range of issues. This includes the use of hospitals and encouraging members to the appropriate facility for their care. More expensive facilities can be popular with expatriates; however, less costly facilities may be able to offer more effective treatment for specific conditions. Where a member calls the insurer to seek advice on where to go for treatment it can often lead to better care, cost savings and an improved claims experience for the scheme overall.

Costs are also affected by network negotiations and fraud. Agreements with providers in an insurer’s network are typically re-negotiated every couple of years and cost pressures can occur where facilities look to push through higher prices.

Fraud too can be an issue and can occur in a number of ways such as overcharging by a medical provider or fictitious claims submissions. Insurers go to great lengths to combat fraud – Aetna, for example, has a dedicated unit to tackle the issue – although it still remains an industry-wide concern.

High quality iPMI is essential protection for many expatriates around the world. Organisations will be keen to keep their employees protected but with one eye on the cost of the insurance provision. The iPMI industry goes to great lengths to offer access to excellent standards of care whilst introducing innovative ways to keep premiums affordable. Customers too can influence premiums. By educating staff on how to minimise the cost of their care while still getting the level of treatment they need, premiums can be managed more effectively not only for individual schemes but across the industry as a whole.

How insurers, brokers and clients can partner to manage insurance costs

Alan Parker, head of Europe and Asia underwriting at Aetna International, discusses the factors affecting premium inflation and the cost containment strategies available to both insurers and insureds.

In association withwww.healthinsurancedaily.com | December 2014

The Hot Topic

Understanding the options available when providing benefits to expatriate employees demonstrates the role and importance of international plans. There are a number of ways employers can do this, with the choice often dependent on regulations, tax implications and benefit terms and conditions as well as the nature

of the employee’s assignment. First up is to keep them on the domestic plan. This is the simplest approach but also the one most likely to cause problems.

Linda Torr, principal, global benefits at Aon Hewitt, explains: “UK employers do tend to keep their expatriate employees

on the domestic plan but if their contract changes and they’re localised they wouldn’t be able to stay on it.”

Not every employer will look to change its expat contracts but in some professions it would be required. For example, Torr says that partners in a legal

Talking point: International group risk benefitsWhile complexities around international private medical insurance requirements have turned it into a key area for benefits consultants, international group risk benefits have often been left in the shadows. But it is an area that intermediaries can no longer ignore – so where should they start? Sam Barrett reports

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The Hot Topic

firm would often need a local contract to be able to practise.

Even if steps are not taken to change employment contracts, employers can also run into problems with the terms and conditions on a domestic plan. Some insurers will only provide cover in the UK, or will limit it for a set period. In the worst case scenario this could mean a claim being declined with the employer forced to settle it themselves.

There can also be issues with local tax and regulation as well as currency and exchange rates.

“One of the biggest risks for organisation operating internationally is ensuring the right level of compliance,” says Mike Lewars, commercial lead and head of international at Buck Consultants at Xerox. “You need to navigate through an increasingly challenging compliance landscape.”

Going localMoving an employee onto a local scheme can solve many of these problems. This can be achieved either by arranging cover locally or through a multinational pooling arrangement.

Which is most suitable will often come down to the size of the organisation. While it is possible for smaller companies to access multinational pooling through one of the multi-employer pools, the

administration required to set up a pool means it is more suited to large corporates with operations around the world.

But, whether bought directly or through a pooling arrangement, there can still be complications with a local scheme. Torr says that benefit levels can vary around the world and this might be reflected in a local scheme. As an example she says that in the UK it might be the norm to have life assurance cover equivalent to four times salary but this drops down to three times in Nigeria and two times in Asia.

While this can make for difficult conversations with employees, convenience can also make the local route less attractive. Richard Colver, head of healthcare and wellbeing at JLT Employee Benefits, says that, wherever possible, he would look to put an employee on a local contract as this is usually the best option from a tax perspective.

“This isn’t always possible,” he adds. “If you have small groups of expatriate employees spread all around the world, they cannot be retained in the UK plan and the client doesn’t have a multinational pooling arrangement, they’ll struggle to get local cover. In these cases an international policy is the best, if not only, option.”

International jet setThere are a number of advantages to providing an international plan. Importantly, they remain in place wherever an employee is based. It is also perfect where there are only a small number of expats or they are spread thinly around the globe. Rather than attempt to arrange a series of local policies, all expats can be catered for through one scheme.

But while international benefits give this reassurance and convenience, there is a downside – cost. With an employee potentially based anywhere in the world, there is a higher risk of a claim. On top of this, as there are not many players in the market, competition is relatively muted. Torr says that, because of this, she would look to move employees back on to a domestic plan when they returned to the UK.

Market overview

But the number of players in the market may grow over the next few years. Allianz Worldwide Care, for example, recently announced plans to enter the life and disability market. And with companies increasingly looking overseas for opportunities, there are plenty of opportunities for international benefits – and that could mean other insurers could follow suit.

James Spencer, international development manager at Jelf International, says he has seen increased interest from employers looking to do the right thing for their expatriate employees.

“They’re not saying ‘what’s the minimum we can do?’ Packages include health and risk benefits but also health checks and other ways to ensure they stay fit for their assignment. There are plenty of opportunities.”

In addition, while the large multinationals are wise to the benefit requirements of their expatriate employees, Ludovic Bayard, chief commercial officer at Generali Employee Benefits, says that the medium sized companies are less likely to be aware of the need for different cover.

“These firms may only be sending a handful of employees overseas but different rules and customs around the world can create problems if they don’t have the right benefits in place,” he explains.

“Other medical insurers will be watching closely to see how AWC does,” says Lewars. “There are challenges to entering the market but it’s the next logical step in the international market.”

“UK employers do tend to keep their expatriate employees on the domestic plan but if their

contract changes and they’re localised they wouldn’t be able to stay on it.”

Linda Torr, Aon Hewitt

“You need to navigate through an increasingly challenging compliance landscape”

Mike Lewars, Buck Consultants at Xerox

In association with

Neil Raymond, CEO, Pacific Prime

Neil Raymond was born and educated in the UK until 1990. He was educated at Warwick and Cambridge University in Engineering and Management and graduated with a first class honors degree. He travelled extensively before joining Shell Exploration and Production in 1992 working on Oil and Gas Field development around the world and qualified as a Chartered Engineer.

In 1997 he attend INSEAD business school in France to complete an MBA, after which he joined a boutique management consultant firm (Marakon Associates) and was based in France, Spain and London.

In 1999 he moved to Hong Kong and founded Pacific Prime, an insurance distribution company focused on the automotive and health insurance sectors. The company has grown to become one of Hong Kong’s leading motor insurance distributors and the leading global distributor of international private medical insurance to individuals. The company has offices in Hong Kong, Singapore, China, Dubai and Abu Dhabi. In 2012/13 and 2013/14 the company was awarded Bupa International’s Top Global Distributor award.

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Interview

Much is made of the huge opportunities on offer for brokers willing to make the leap into the world of international private medical insurance (iPMI).

Health Insurance Daily, for one, has long banged the drum about the fact that the iPMI market is one of the fastest-growing sectors of the health and protection insurance industry.

In fact, the most recent independent analysis – you can read more on page 4 – suggests that the iPMI market has trebled in size over the past decade. And if there was ever the personification of the potential for brokerages that grasp the iPMI nettle – and get it right – Neil Raymond is it.

After setting up Pacific Prime from a standing start in 1999, Raymond now majority-owns and runs a brokerage with around 300 staff and offices in Hong Kong, Singapore, China, Dubai and Abu Dhabi. Not only that, but Pacific Prime is now thought to be the industry’s biggest individual iPMI brokerage and has been recognised by Bupa Global as its top iPMI distributor for two years running.

Not bad for someone who is the first to admit that he is far from your typical ‘insurance man’.

A Chartered Engineer by training, Raymond’s path to Pacific Prime began at Shell Exploration and Production, working on oil and gas field development around the world, before he completed an MBA at INSEAD business school in France.

And while, after a spell at a boutique management consultant firm, he did

spend some time working with Mark Tucker – later the CEO of Prudential – on life distribution, Raymond’s interaction with the world of insurance had been limited to say the least.

Getting startedIn fact, Raymond is the first to admit that when he arrived in Hong Kong in 1999, aged 31, to set up a brokerage focusing on the motor sector, his understanding of the world of insurance was somewhat patchy to say the least.

“I’d started a brokerage and three months later I discovered we got commissions on renewals,” he says. “That shows you what I didn’t know, which is a lot. That’s how little I knew. But the important thing I did know – which other people didn’t and which was actually far, far more important – was that general insurance distribution was inefficient. I knew if you could make it efficient that you could earn money. In other words there was a lot of cost/profit consumed in the distribution part of general insurance and the bottom line is if you can get into that and work out a strategy you can make money.”

In many ways, the fact that Raymond had only had had limited exposure to the world of insurance was to his advantage.

“There were advantages in that I didn’t come from a life insurance background or a big general insurance background where I came with all the baggage,” he continues. “The disadvantage was that I had to learn the industry.”

For Raymond, that in itself was not the difficult part.

The iPMI ProfileNeil Raymond, CEO, Pacific Prime

From setting up his own brokerage in Hong Kong from scratch some 15 years ago, Neil Raymond now runs one of the largest distributors of individual iPMI in the world. He tells Health Insurance Daily editor David Sawers how it all came about

In association with

15


Interview

“The reality is insurance is incredibly logical and structured,” he explains. “I’m an engineer by background and insurance is just a product that fits my mind. If you want to go off the deep end and talk actuarial stuff, particularly on the large side, it can get quite complicated but generally speaking, talking about general insurance products is not that hard, it’s pretty straightforward.”

Certainly, most insurance specialists would agree that the commoditised world of motor insurance – Pacific Prime now has 20% share of that market in Hong Kong – is relatively straightforward. But it is also, as Raymond explains, hugely competitive.

“Motor insurance is a cut-throat market where you can lose volumes very quickly,” Raymond explains. “And, unfortunately, Hong Kong is a very small market, it’s half a million cars max, including commercial vehicles and taxis and everything else. It’s a small motor market so although we’re very successful in that motor market I realised in about 2003/2004 after one or two years that motor was never going to be ‘it’ because the market was just too small. So we got into health insurance.”

And while medical insurance now accounts for 90% of Pacific Prime’s business, Raymond acknowledges that he was fortunate – to some degree – to find himself in Hong Kong when he did. The world of iPMI back then was less onerous in terms of regulatory and licensing requirements, for a start.

“Hong Kong was fortuitous,” he says. “That was serendipity. I didn’t see that or plan it, I just happened to be in a place where it was relatively easy to get the licence. The world of compliance in Asia has come a long way in 15 years. When I started off, Hong Kong was a pretty relaxed place – and it still is one of the most relaxed places in the world today in terms of compliance. So when I started off it wasn’t that hard to get a licence. Today the barriers on that are far more significant.”

A world of opportunity

Fortuitous or not, Raymond is clearly pleased to have forged his way in the world of healthcare – a sector of the insurance market that he believes is infinitely more rewarding from a professional point of view than many other lines of business.

“The principle reason I love the medical business is that as a broker you can truly add value,” he says. “It’s almost impossible for the average client to read and understand a policy, and even more impossible to read and understand policy A versus policy B versus policy C.”

According to Raymond, he is “not particularly interested” in other financial service products as he still sees “a lot of headroom on medical insurance”.

So where, then, is that headroom? Raymond agrees that the emerging middle-classes and proliferation of ‘globally-mobile’ high-net-worth individuals provide huge opportunities.

Geographically-speaking, meanwhile, aaround 70% of Pacific Prime’s health insurance business is Asia Pacific-based, with the remaining third attributed to the rest of the world.

“Singapore and Indonesia are doing pretty well, Africa is on the up big time, the Middle East is doing really well,” Raymond says. “South America’s doing quite well, although we’re not really in there yet.”

What about the promised land of China, though? Insurers aplenty are ploughing huge amounts of time, money and effort trying to tap into a market which has yet to show its full potential in terms of iPMI – but Raymond urges caution.

“The reality is the market in China is moving very slowly,” he says, adding that the decision by iPMI providers to go into China is being driven by boardrooms on the other side of the world.

“The market’s not that big, it’s not growing that fast, the healthcare providers are brutally expensive, so making money there is incredibly tough,” he warns. “There’s a disconnect between the practical realities of what’s going on

on the ground and the desire for these mega health insurance companies to be present in China so that they can tell their shareholders they’re in China. To a certain degree the business strategies are being driven by the requirement to have a China policy as opposed to the realistic opportunities today.”

Leaving the undoubted complexities of the China iPMI market to one side, however, there is no doubt in Raymond’s mind that the broader world of iPMI has huge potential.

“The world of iPMI is an exciting world, it’s a changing world but it’s a world that has a lot of potential to grow,” he says.

Like any industry, though, the world of iPMI has its frustrations – and for Raymond, top of that list is recruitment.

“There’s nobody who’s going to come to you with iPMI-relevant experience,” he says. “You can get people come in with life insurance experience but that’s irrelevant to me, I don’t want those sales techniques anyway. We don’t recruit anybody with insurance experience, or if you do have it’s irrelevant to me. We recruit based on intellectual capability and personality. Everything you need to know about insurance we will teach you.”

As Raymond’s own experience demonstrates, for those willing to learn the ropes when it comes to iPMI, the rewards can be significant.

“It’s a great industry,” he says. “It’s got some significant challenges coming. The cost of healthcare provision is the real challenge. The 10% medical inflation year-on-year is going to be a big problem. There are also tremendous compliance challenges and more and more countries are putting up barriers. There’s lots of challenges but the reality is there are good opportunities as well.”

“The principle reason I love the medical business is that as a broker you can truly add value”

“There were advantages in that I didn’t come from a big general insurance background with all the baggage”

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Documents

QUARTERLY MARKET REPORT International PMI · 2019. 5. 4. · In association with 3 | December 2014 Quarterly Market Report | International PMI Editor David Sawers • ext.4154 [email protected]