Ipmi - the perfect mix
Philip Wright heads the soon to be opened UK Branch of DKV Globality the international medical insurer of the Munich Re Group.
The global healthcare market is one of the fastest-growing sectors of the economy (insurance and care provision). This trend will become even more pronounced due to advances in medicine and increases in life expectancy.
More than 30 million expatriates are currently living and working worldwide. The market volume exceeds €2.5bn. Expatriates are typically young, well educated and financially independent. They represent a low risk and are often double insured. Business placed from the UK is largely driven by well established companies (sectors include oil and gas, defence, professional services, financial services and mining) which have significant operations abroad. Governments worldwide have concerns over health budgets and are seeking to control usage. More and more are bringing in legislation making international private medical insurance (iPMI) mandatory for expats. The quality of state health care is falling worldwide due to reduced budgets. Demand for PM treatment continues to rise while costs are increasing. The need for iPMI continues to grow as a result of all these factors.
So what factors are needed to be a successful iPMI provider?
Service quality and cost containment
The high level of utilisation, cost increases in health provision and the boost in volume of large cases are driving the level of medical inflation, running currently at 15-25% a year. The insurer needs a claims process and provider network that can mitigate the rise in costs. Brokers need a partner who is familiar with the healthcare system of the host country and the key players in the market. This can only be achieved with a near local presence expert claims staff. This requires both resources and backing - an international approach with local presence.
Strategic partnerships and in-house expertise
The iPMI sector is a sophisticated market with demand evolving from global patterns of trade. That is why the activities of an insurance provider cannot be limited to a few countries or regions. The implementation of a high class provider network across the globe is a must for every insurance company. In some countries a local partner will be required to meet compliance rules. Insurers without these partnerships are exposing themselves and ultimately their clients to a risk.
The challenge for the iPMI insurer is to manage a combination of in house and third party suppliers on a global scale. Large international companies like DKV Globality with a group-wide access to 5,000 health focussed employees in 26 countries, are well placed to understand and meet this challenge.
Quality of information and global best practice
What drives the business and creates real value for the customer and all other involved parties is the efficiency of sharing information; the bringing together of experience, ideas and technology. Corporate decision makers and the policyholders may be continents apart, operating in different time zones. Add to this multiple languages and cultures and the need for good communication and shared systems becomes clear. An iPMI provider will need consistent and robust working practices that can cope in a range of situations.
Future business potential
iPMI has proven itself to be crisis-proof. Economic down turns are less problematic since brokers don’t depend upon specific geographical markets. Brokers can expect not only a higher degree of customer loyalty than local PMI but higher base premiums and higher commission terms than from traditional local business. The saturation level of broker involvement is currently approximately 75 percent in UK. Link these factors to the fact that many of the policyholders will be more senior high net worth executives and the huge potential for developing IPMI from clients becomes very attractive for all advisers. Director UK - DKV Globality