Keeping it simple is the motto for this UK-based IPMI specialist – and it helps to keep the costs down for its policyholders, Charlotte Beugge discovered, when she spoke to the company’s founders recently. Below, she shares this and other secrets of the Expatriate Group’s success.
Back in 2003, Lee Gerry and David Bond decided that what the world really needed was another private medical insurance company, but one that was aimed specifically at expatriates.
So they launched one.
That it is still going 14 years on – and evidently flourishing – is probably due to a number of factors, including Gerry and Bond’s previous experience in the insurance industry, they say.
They both joined Strategic in 2003 from Primary Group, a registered Lloyd’s broker, where Bond was joint managing director and Gerry was international underwriting manager, (and which no longer exists under the Primary Group name, as a result of an acquisition).
They were employed by Strategic mainly, they say, to develop and grow the accident and health business, and to create a new IPMI company.
“Our vision was to develop a book of international healthcare business, focused on excellent customer service and protecting our policyholders from the swingeing annual premium increases that have become so commonplace in the market,” says Gerry.
“We wanted to offer simple, reliable products with excellent customer service.”
The fact that although they didn’t buy an existing book of business, they did enjoy the backing of a Lloyd’s of London broker, which Strategic Insurance was as well, would no doubt have helped.
Still, the partners say their business has grown steadily every year since they opened their doors, as measured by both premium growth and customer numbers, in spite of their not having the scale or the global presence of some of their major rivals.
These days, Bond is no longer involved with Expatriate on a day-to-day basis, as he is the head of the parent company, Strategic Insurance Services, which is based in central London.
Today, Expatriate Healthcare has just 20 staff in its UK headquarters in Haywards Heath, West Sussex; it doesn’t have a sales force, and much of its business is from customers renewing their policies and adding on new types of coverage, and from personal recommendations.
Its policyholder base is roughly split 75% individuals and families and 25% groups, according to Gerry, who adds that Expatriate “currently insures people from 94 different nationalities in 180-plus countries”, about 65% of which customers are British nationals.
Because Expatriate Group is a private company, its sales and earnings data aren’t published. But Gerry isn’t shy about revealing one number he regards as significant – the company’s average annual premium increases percentage, which he notes they’ve managed to keep below 5%.
As Gerry, whose title is director, points out, this compares with an industry-wide annual premium increase average over the past 20 to 30 years of between 12 and 14%.
“This allows us to enjoy an excellent renewal rate: which is exactly what we set out to do,” he says.
Range of products
While Expatriate Group’s annual premium may not have increased by much over the years, one thing that has changed dramatically since he and Bond launched their business, Gerry says, is the range of insurance products Expatriate carries.
As well as international private medical insurance (IPMI) and travel cover, it also offers income protection insurance and, new this year, it’s to begin writing regular premium, 30-year term life insurance – a product, the partners say, that’s been difficult for expats to get in the past.
In conjunction with an international underwriter, it is also now writing insurance that covers funeral expenses – thus enabling it to say more than ever, Gerry notes, that it offers expatriates a “one-stop personal protection insurance solution”.
Unlike some of its larger competitors, which underwrite their own insurance policies, Expatriate Healthcare is a “managing general agent”, which means that the policies it writes on behalf of its clients are, in turn, underwritten by under-writing providers, including Lloyd’s of London.
Unusually in the industry, Gerry says, it has long-term relationships with its underwriters, so it doesn’t have a need to rearrange its underwriting every year or so. This, he explains, helps with continuity for all parties.
“A variety of carefully selected underwriters provide us with the capacity to support our products,” he explains.
“We chose the underwriters based on their knowledge and understanding of specific markets and products.
“We have worked with them all for many years, so we are all familiar and comfortable with each other’s businesses, and know what each partner is able to contribute to our customer service.”
Keeping it simple
One way Expatriate Healthcare is able to keep its premium increases low is that its offering is simple.
For IPMI, there are just three options – and a choice of three levels of excesses at each level. They consist of:
• Select Plan, which Expatriate Healthcare claims is one of the most comprehensive on the market, covering dental and maternity treatment as well as in-patient, outpatient treatment and emergency repatriation and assistance; it also covers elective treatment such as vaccinations and check ups;
• Primary+, which is described as being like the Select Plan, minus the elective treatments; and
• Primary Plus, which covers for inpatient, day patient and follow up outpatient treatment and emergency assistance and repatriation.
What Expatriate Healthcare plan-members can’t do is bolt on optional extras to the plans: they have to opt for one of the three plan types.
They may, however, choose whether to have an excess, and how much this should be.
Packaging the benefits in this way, Gerry says, makes the underwriting more predictable, and crucially, it also makes it a much simpler product to administer, thus cutting the costs – and keeping the annual premium increases below 5%, as mentioned previously.
It also makes it easy to sell, they report, since as buyers can see easily what’s for sale.
Expatriate Healthcare Group
The most popular policy is Primary Plus, but, says Gerry, “If you’re a young person wanting low cost cover, then you go for Primary with a big excess – you’re getting good cover at a cheap price”.
At the other end of the scale, high-net-worth individuals and corporates often opt for Select, with no excess at all.
Corporate clients tend to choose top levels of cover because they want a simple claim process, and cover such that the policyholder will be back at work quickly, Gerry explains.
And he says that the level of claims is highest on Select sorry Select not Select Plus because of the range of treatments covered.
Model going forward
As for the future, Gerry suggests he and Bond are unlikely to tinker much with their business model, which has worked for them thus far, and, given the sheer number of expatriates who need insurance coverage, is unlikely to need to be changed, at least for now.
(If all of the world’s expatriates were to suddenly all move to a single country, with no other inhabitants, it would be the world’s third largest in terms of population, as well as its second largest in terms of GDP, Gerry is fond of pointing out.)
“We are growing in the way we want to grow,” he explains.
“We are very much in this for the long term. We’re not trying to be all things to all men.
We want to grow at a rate that will not be detrimental to our service to customers.”
Looking ahead, he says the company is forecasting a “double-digit increase in growth of policyholder numbers and premiums” in 2017, as the company looks to “continue to strike a balance to ensure our appetite for growth is not to the detriment of our underwriting results and customer service”.
“Expatriate Group doesn’t have the ‘brand power’, or [the deep] pockets that the larger international medical insurance providers [have] to market and promote their services,” Gerry continues.
“We differentiate ourselves with our experience and targeted products, combined with a passion and habit of caring for our customers and their wellbeing. We instil into all our employees that every interaction with a customer is an opportunity to show them we care.
“[Our plan is to] remain true to our original vision.”
This story originally appeared in the June issue of International Investment. To see the online edition of that issue, click here.