A recent reduction in the duration of the average expat’s overseas assignment, driven by such factors as the existence of the internet and a corresponding growth in communication systems, as well as budgetary pressures, is driving the growth of short-term international health care plans, sources in the IPMI industry report.
While the average expat assignment used to last between three and five years, the picture has recently begun to change.
Globalisation, the buzzword of the 1990s and early 2000s, is increasingly being replaced, even in some developed countries, by efforts aimed at making it more difficult to bring in foreign workers, or to ensure that foreign workers don’t stay longer than a certain period of time.
Expatfocus, one of the largest expat community websites, noted recently that overseas assignments now tend to be less than a year long, and some are as short as three months.
As a result, some players in the international health insurance industry have begun to adapt the policies they sell to those companies that are sending expatriates abroad to accommodate this change, a number of IPMI industry spokespeople say.
Among them is Joe Thomas, business development director of April International UK, the UK-based, expat-focused arm of the Euronext-listed French insurer April Group, which looks after clients in 120 countries around the world.
He says the company launched a new product for this short-term market two years ago, “and now it’s one of our most successful insurance solutions, with new business numbers growing month-on-month”.
The April short-term plan is designed for those who either make “multiple short trips” a year or else stay away for single periods lasting up to a year, with an option to extend the plan for an extra six months.
Thomas says the cost of such cover is “far lower than traditional long term expat international health insurance policies, as it is designed to focus on the core essentials” that expats typically need.
Expatriate Group, a UK-based company launched in 2003 specifically to focus on the expatriate private health insurance sector, also recently introduced a short-term option for its clients, in response “to feedback from [our] customer service team, who talk with the underwriting team each month to provide input on trends,” according to Expatriate Group director and co-founder Lee Gerry.
Travel insurance policies, he explains, don’t really fit the bill for expats on short-stay contracts, since they “only cover emergency treatment”.
They’re also “geared towards getting the customer back home for any ongoing treatment,” he notes, which, depending on the insured individual’s medical condition, may not be either in their best interest nor that of their employer.
“And once they’ve been returned home, assuming that they don’t have access to good private healthcare, they’re going to be placed on a waiting list for any non-emergency treatment.
“Employers looking to place employees overseas want to protect their asset, minimising any time away from work. And employees being placed overseas want to ensure that they have medical protection comparable to that which they enjoy at home; not just a travel policy.
“Therefore, a full IPMI policy is desired by both parties.”
The rise in this type of policy, in response to the recent rise in short-term secondments, has resulted in a slight change in underwriting rationale to meet this requirement, Gerry says.
Expatriate Group has now made its short-term coverage available online, alongside its traditional IPMI plans, and with it, a FAQ page about the short-term option, also online.
William Russell, a UK-based IPMI specialist founded in 1992, allows its clients to take out any of its policies “on a month-by-month basis”, which they then pay for “monthly, by credit card, and then just cancel” when the coverage is no longer required, according to Inez Cooper, the company’s founder and managing director.
This, she adds, goes for plans that range from those that offer just “the essentials, like cover for hospitalisation and emergency medical evacuation” to those that offer “full cover, [including coverage of] everyday medical care costs”.
“Many of our customers use our plans in this way, cancelling when they return to the UK, and taking up the cover again on their next assignment,” she says.
William Russell has offered such short-term contracts since it launched, “although we do not actively promote it”, Cooper says, adding that such short-term contracts currently account for less than 1% of its clients.
This, she adds, is, a percentage that hasn’t changed significantly over the last five years, “nor do we anticipate any future change”. William Russell says it currently has more than 12,000 individuals signed up to its health insurance plans.
The company also offers an option that permits a plan member to receive a refund on the unused portion of the cover they’ve paid for if they’ve bought into a regular 12-month contract, which they pay for via direct debit, providing they’ve not made any claims on the policy.
Now Health Int’l
A spokesperson for Now Health International, the Hong Kong-based IPMI provider founded six years ago by French health insurance industry executive Martin Garcia, said the company doesn’t “currently” offer short-term plans to clients– its WorldCare packages are annual – but is continuously monitoring industry trends and conceivably could do so eventually if it were seen to help Now Health to better meet the needs and wishes of its expatriate clients.
That said, the spokesperson added, while it is true that the nature of expat assignments is “fundamentally changing”, with “more executives travelling overseas for short-term business development or training projects, rather than the long term relocations of the past”, and that “traditional travel insurance plans aren’t [specifically] designed for expats, and often only cover emergency care”, there is still a case to be made for the longer-term plan.
“IPMI plans not only guarantee access to the best private medical providers, but are usually portable, so executives can take them with them on their next assignment,” the spokesperson said, and thus ensuring that the coverage is un-interrupted.
Interruptions of coverage can be a danger for insured individuals, particularly if an employee forgets that their plan is only for a short time and, for whatever reason, fails to receive notification of the fact that it is expiring or has expired, she added.