According to the recent International Private Health Insurance Market Insights Report 2023 from market insights firm Research and Markets, the industry is in a strong position, with both insurers and brokers forecasting a period of increased growth over the next few years. While the number of long-term assignments for globally mobile employees has yet to recover to the levels observed before the onset of the Covid-19 pandemic, shorter-term and flexible assignments have risen steadily – and the report suggests that employers are adapting, tending to favour a ‘decentralised’ approach over more traditional expatriate models.
In addition to this, the number of self-employed ‘global citizens’ has also risen, alongside a new generation of students. And with these shifts come interesting challenges – and opportunities – for the insurance industry.
Change is in the air
“The audience is diversifying to encompass more of those who are self-employed on a work assignment abroad, and younger digitally savvy individuals,” Joe Thomas, Managing Director of APRIL International UK, told ITIJ. “This shift is increasing demand for short-term IPMI policies, and [insurers] need to innovate in order to cater for rapidly changing needs. Students have access to specialised plans tailored to their needs … and employers have adapted by sponsoring insurance costs, while granting employees the autonomy to choose policies that align with their preferences. This approach fosters a sense of individuality and personal choice in an otherwise corporate-driven process.”
Other industry figures noted that as the customer base has expanded and evolved, competition has also increased, with far more entities offering IPMI policies than in recent years. But while this does represent a hurdle to overcome – particularly for smaller providers – it doesn’t mean that everybody is struggling for business.
“Despite the competition, we’re seeing more traffic, leads, and sales in the individual channel than ever,” said William Russell’s Marketing Director, William Cooper. “Google Trends shows a 182 per cent increase in searches for ‘international health insurance’ from October 2013 to October 2023.”
But what does this new generation of customer want from their IPMI policies – and what type of policy suits them?
Is the customer always right?
Broadly, an individual policy is purchased directly from an insurer by a single customer, with all the personal tailoring and risk assessment that implies. A corporate policy, meanwhile, is purchased by an employer as blanket coverage for all its employees.
It’s easy to see from the evolving landscape why the former type of policy might be seeing a boost in demand – and why an individual policy might sound preferable, though there are of course pros and cons to both options.
With a corporate policy, an employee has less freedom to choose, and will simply have to accept whatever benefits – or lack of same – their employer is willing to provide. There may also be limits on the number of family members and dependants that can be added. However, many individual policies also stipulate a waiting period for certain ailments or conditions, meaning that customers won’t be able to claim for those during that initial period. This is something that is frequently waived with corporate policies.
The report suggests that employers ... favour a ‘decentralised’ approach over more traditional expatriate models
“Customers increasingly want healthcare that’s convenient and accessible, but also expect it to be personalised,” Bupa Global’s Managing Director, Anthony Cabrelli, told ITIJ. “This comes with its own challenges, as many local healthcare services lack [the] truly global capabilities required to give us a total picture of our customers’ health so we can be proactive in the service and care they can access. A data-driven approach to healthcare is needed to provide more seamless, easy-to-access and personalised journeys, with customers able to be more engaged in their healthcare.”
Cabrelli also cited strong and tailored mental health support as something that both customers and their families value highly in a policy: “The monumental shifts in home life and working practices following the pandemic, combined with cost of living pressures, have created unprecedented demand.”
Personalisation and consumer focus were recurring themes among those who commented for this feature – after all, customers are increasingly used to a world in which everything from their smartphone contract to their children’s TV viewing options can be microscopically tailored. Why wouldn’t they want the same for something as crucial as health coverage?
Technological changes have also fed into attitudinal ones, with telehealth, app-based, and digital payment options rising as a consequence of demand – and once such options become common, demand gives way to expectation.
That being said, there are other factors afoot, including specific market forces, as Thomas pointed out: “Localised pricing and expanded underwriting options have become standard, ensuring that insurance products align with the specific needs of expats in different parts of the world. For instance, in Africa, insurance solutions are designed with regional pricing, catering to the unique requirements of different territories within the continent. Moreover, there has been a significant emphasis on how to accommodate individuals with certain pre-existing medical conditions, perhaps through loading premiums.
“In essence, the expansion of more onshore and admitted insurance solutions, coupled with localised servicing, direct billing options and tailored products, signifies a consumer centred shift. This evolution not only meets regulatory requirements but also enhances the overall experience for insurance consumers, ensuring accessibility, choice, and flexibility in an increasingly complex market.”
Paying it forward
So, does this focus on targeted, individual approaches mean that the corporate market is lagging behind the individual market, or that the latter has key lessons to teach the former? Perhaps surprisingly, IPMI professionals don’t necessarily think so.
“Often, it’s the other way around,” said Cooper. “Corporate policies are more customisable and flexible on price than individual policies. [Additionally], individual policies are quite often not brokered, meaning it’s important to keep the product simple, easily understandable, and fairly priced. Changes such as the FCA’s Consumer Duty are making this more of a priority than ever.”
Cabrelli agreed that the flexibility of corporate policies was often superior to that of individual policies, to the extent that it was that segment driving innovation in the market – sentiments that were echoed by Thomas.
“In our experience,” Thomas said, “the dynamics of innovation in insurance policies have taken the opposite trajectory. It is the SME [small and medium-sized enterprise] and corporate schemes that have catalysed advances in individual policy development. The demands and complexities of corporate schemes have paved the way for a more inclusive and accessible insurance landscape for individuals.”
One example Thomas noted is the improved access that individual policyholders now have to crisis support, which is a direct consequence of companies seeking to improve that side of their offering for corporate clients. By taking on board the insights gained from managing larger, diverse groups and incorporating them into the development process, providers are able to augment and upgrade their individual policies.
“This model not only ensures that corporate clients receive tailored, comprehensive coverage,” said Thomas, “but also extends the benefits of these innovations to individual policyholders, fostering a more equitable and progressive insurance environment.”
The future is bright
Between the positive forecasts from analysts and the comments from industry figures, it seems that those in the IPMI sphere have good reason to be bullish. But complacency in the face of an uncertain future would be unwise, and those we spoke to were keen to highlight the challenges ahead, as well as the innovation going on behind the scenes.
“There are generational shifts happening in the IPMI industry,” said Cabrelli. “We’re at a crossroads where evolving customer demands, claiming behaviour and digital technology are meeting the traditional systems of the healthcare industry and organisations that were built for a different time.”
Thomas cited an increasingly complex and varied regulatory environment as a headache for providers – though not necessarily for policyholders, as improved regulatory compliance has paved the way for more localised servicing, direct billing processes and smoother integration of health insurance into visa procedures.
Both Cabrelli and Cooper also pointed to rising healthcare costs – including medical inflation and increasingly expensive speciality drugs and equipment – as a persistent issue for which smart cost containment strategies are a must. Ageing populations with chronic conditions will also continue to pose difficulties, along with – in the UK at least – the seemingly never-ending saga of Brexit.
The market demands constant adaptation to new trends and customer needs, requiring a dynamic approach to product development and customer service
“Increased competition will also make it hard for providers,” Cooper added, “but great for consumer and corporate choice. Perhaps that’ll put some downward pressure on premiums, but it seems unlikely in the current inflationary environment.”
As with most industries, new technology is a key variable, especially artificial intelligence (AI). Some companies have already dipped their toes in these waters in the form of virtual assistants and more efficient data analysis – although, said Cooper, “IPMI providers aren’t well known for embracing technological innovation … it’s difficult to say how it will pan out, but there are AI and machine learning products that promise to improve underwriting and fraud detection.
“We’re witnessing a golden age of medicine,” he said, “with astonishing breakthroughs in gene editing, immunotherapy, and the use of AI in an increasingly broad range of treatments. While these breakthroughs improve clinical outcomes for patients, they drive up the costs of treatments … [and] higher costs mean more expensive claims for health insurance providers.”
The complexities of AI necessitate a certain level of caution, said Cabrelli: “We need to work together to ensure we create an environment that nurtures the possibilities of AI and encourages innovation. 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. This will help us meet the growing demand for healthcare and have a positive impact on chronic disease management, which is expected to increase as the global population ages.”
“Navigating the global IPMI insurance landscape presents significant challenges,” said Thomas. “To stay ahead, providers must continually evolve their skills and capabilities, improve their offers, services and support, and offer competitive pricing. The market demands constant adaptation to new trends and customer needs, requiring a dynamic approach to product development and customer service.”
With competition fierce, prices showing no signs of dropping, regulations becoming ever more complex, and consumers demanding increasingly tailored, flexible and responsive products, the route forward is not a simple one. Providers will need to think strategically in order to flourish, and all the respondents ITIJ spoke to seemed to agree that bigger providers with more resources to draw upon will find it easier to navigate such a landscape. Looking at the insurance industry in general, though, bigger legacy institutions aren’t always best placed to be flexible.
As hardened strategists tend to say, take nothing for granted…