The market for products which are specifically geared to expatriates is not one to be entered into lightly and international private medical insurance is a case in point.
Not only is it a difficult market in which to get a solid footing, unless you are tapped into the right market, it is difficult to put through the volume of business required to make it a sustainable stream.
That said, for many IFAs with a growing list of clients moving overseas for either retirement or work, it has more and more become an essential part of holistic financial advice.
Although the market waned in the latter part of last year with the Middle East weighing on people’s minds, it has slowly started to pick up again in recent months and most providers believe they will make their yearly targets.
SPS Wellbeing head of international accounts Steve Desborough says the market has been growing year on year at around 10 per cent, much higher than the UK PMI market.
Medical Insurance Services director Stephen Walker says the market has been quite buoyant this year.
For the generalist IFA, Walker says there is a lot of difference in price or offerings from provider to provider. Even though most providers offer a variety of different levels of healthcare – for instance, specialist Medicare International offers basic, intermediary and full cover options – premiums and what each level of cover entails can vary dramatically.
Provider Interglobal international sales manager Andrew Sandilands says that in the late 1990s, the market saw a surge of new providers that have brought more competition to the sector and there is now around 15 providers in the UK.
Sandilands says it is key that brokers look at the raft of products on offer from provider to provider as there are substantial differences.
He says: “We are the only ones that will bring the whole family out if the policyholder needs to be bought back to the UK. Additionally, we were the first to offer compassionate home visits for a family to come out and see a family member who is critically ill. These innovations are what brokers need to look for to make sure they match the client’s needs.”
But research suggests that consumers are more likely to buy full cover packages rather than packages that offer less cover.
Medicare International managing director David Pryor says although price is usually the main sticking point for most consumers – they see international PMI as expensive – they are often unwilling to look at other alternatives to top cover.
He says: “Often, the lower-cover products may be more appropriate but consumers seem not to believe that it will be appropriate for them.”
Conversely, Medicare’s research indicates that brokers see top-cover packages as more value for money.
Pryor believes there is a solid case for greater education of the consumer.
He says: “There needs to be education of the consumer by the broker to try and help them out of their preconceptions about what is appropriate cover and how much should be paid for it.”
International PMI seems to be a relatively small part of most people’s portfolios and subsequently there are a lot of brokers that only do a small portion of international PMI business. There are, however, also a number of brokers which specialise in the sector.
Pryor believes there is scope for the more specialised brokers to form packaging arrangements. He says: “It would be possible for big brokers to pick up smaller brokers’ business and share the commission. In this way, smaller brokers may find the work less complex and easier to put through.”
Walker says his business already runs as the “PMI wing” of a number of IFAs, working in a non-competitive partnership where leads are interchanged between each other.
He says international PMI is too complex and specialised for many generalist IFAs to compete in while also managing their own areas such as pensions and investments.
“A lot of people will try to dabble but it is an area where you really need to know what is going on otherwise it is hard to find the right deals for your clients,” he says.
Pryor says most brokers feel they do not get the technical support they need to sell policies and service their clients. While 75 per cent of brokers in the Med-icare International research agree that policies still represent good value for money, Pryor says that, in general, international PMI is seen as complex and definitely something that needs to be sold.
Around 62 per cent of brokers surveyed say the technical support available to them is not sufficient while more than 60 per cent agree that policies are too complex, have too many exclusions and that insurers need to improve the efficiency of claims’ handling.
Pryor says: “Setting this against the 87 per cent of brokers who feel that back-office admin is more important than price alone when considering policies, these survey results are sending a loud message to providers. Brokers are giving voice to the sharp-end concerns they face every day, where brand domination is no longer the name of the game and clients know what they are looking for.”
Desborough says factors other than price are important but he thinks much of the international PMI business is still being placed with the big names because non-specialists do not know how to get inside the different products.
He says: “Although many of the big names have some good products, you need to look at everyone to come up with the right deal for your client.”