Gone are the days when insurers excluded any claims arising from pre-existing conditions, when policies were intended to cover only the most unexpected occurrences. Today, the range of providers able to cover a traveller with an ongoing medical condition is growing larger all the time.
The fact is, more people continue to travel to increasingly diverse locations, irrespective of age and medical conditions. In the UK alone, around 15 million people are currently living with at least one long-term health condition, a figure that is expected to rise to 18 million over the next decade. And such travellers have money too. Disposable income rose by 14.3 per cent for the retired sector, compared to just 2.3 per cent for non-retired households, between 2008 and 2017, according to the UK’s Office of National Statistics (ONS). “Certainly, the ‘Grey Pound’ has a lot to do with it,” said Chris Blackman, Product Development Consultant for AllClear Insurance Services in the UK, which specialises in cover for pre-existing medical conditions. People living longer means that they still want to go on holiday with their hard-earned money, and this group will inevitably need insurance that covers its health needs.
Difficulties in getting coverage for medical conditions at a decent price, however, prompted the rise of specialist insurers in the UK. Such insurers noticed there was a gap in the market, created by the increasing number of people with pre-existing medical conditions who still wanted to travel. They noticed that people wanted – and were able – to do so, in part, because of medical advances such as statins and improved cancer treatments. The rest of the UK travel insurance market has since, for the most part, followed the specialist insurers. “The days are gone where someone who has had a heart attack believes they are on the scrap heap and mustn’t move for fear of another to finish them off,” said Blackman.
The movement towards selling travel insurance for individuals with pre-existing medical conditions is bound up in the way medical history is now declared – online, through secure medical screening programmes. “To the consumer, it is more private and easier than using a call centre,” pointed out Blackman. The consensus is that, finally, it was this risk-rating software that transformed the impaired travel insurance market.
Free Spirit is a dedicated travel insurance scheme in the UK for people with pre-existing conditions and has been around since before automated screening systems existed. Director Peter Hayman spoke to ITIJ about how the market has changed over the years: “Methods of medical screening have evolved, with one particular company, Verisk Analytics (formerly Healix Risk Rating) dominating most sales channels. There are a number of smaller specialist providers who typically cater for particular niche business. The second largest system is Protectif provided by tifgroup. Where Verisk typically looks to provide a quick result with a relatively small number of questions, the Protectif system is a much longer and more inquisitive journey. Both systems have their merits and are under regular review to keep abreast of changes in medication, life expectancy, and improvements in claims data analysis, allowing a more dynamic approach to premium rating.”
Paul Beven, Managing Director, Global at Verisk Risk Rating, said insurers use the company’s software to do what they’ve always done, but more easily. “They allow a non-medical customer to input details of their conditions without being asked any ‘technical’ questions, to get the required information about risk in as few questions as possible, and to have the score output be a good indicator of risk,” he said. The key, of course, lies in getting the questions right.
the vast choice of insurers THAT cover pre-existing conditions is leading to far greater segmentation in the market
Insurers give their ‘trigger’ questions significant thought. “They want to make the mesh of their sieve fine enough to catch those they want to ask some additional health questions, but not fine enough to catch too many people with minor issues,” he said. In general, this works well, although there are nuances that must be taken into account: “They must manage any apparent inconsistencies between insurer policy wordings, especially relating to exclusions regarding awaiting investigation/treatment.”
What has really opened up the market in terms of allowing more people to find the insurance that meets their needs is that online aggregators have brought medical screening to the masses, rather than such customers having to go directly to the specialist firms. The rise in insurance aggregators like MoneySupermarket.com and medicaltravelcompared.co.uk, is intrinsically linked to these tools, he added. With the same questions answered, it is possible to search across multiple insurers at the same time.
Today, the vast choice of insurers that cover pre-existing conditions is leading to far greater segmentation in the market, say UK insurers. “We are increasingly seeing those in the market moving away from a one-size-fits-all approach where age groups and geographical regions may have been lumped together for convenience rather than because they were known to represent similar risks,” said Beven. “Increasingly, premiums are becoming ‘personalised’ and that approach includes the assessment of medical risk as sellers compete even more for the customers they want.”
Blanket exclusions are still par for the course elsewhere, however. They exist in many international private medical insurance (IPMI) polices, for example. Chris Price, EMEA Head of Travel Insurance, Zurich Insurance Group, told ITIJ: “Many overseas markets provide cover for travellers that varies from the UK approach to pre-existing conditions, ranging from products that exclude all pre-existing conditions (with no option to cover these) to products where pre-existing conditions are fully covered, and no screening process or rate loading is applied.” The overseas cover provided by that country’s own healthcare system is also a factor, he added: “In order to deliver more risk-appropriate premiums, some countries are now beginning to look at medical screening, but this tends to be a slow process.”
In Europe, there is little in the way of an impaired life travel industry, agreed Simon Powell, Founder and CEO of Fit 2 Trip, which was created specifically to offer travel insurance products to consumers with pre-existing medical conditions in non-English speaking countries. “European travel insurers still generally exclude travellers with pre-existing medical conditions, or limit the conditions covered to relatively benign ones,” he said.
The situation is similar in the US. Rajeev Shrivastava, CEO and Founder of VisitorsCoverage in Silicon Valley, told ITIJ: “Most travel insurance companies in the US do not offer coverage for pre-existing conditions. Depending on the specific insurance policy, eligibility of the insured and other criteria, there are some insurance policies that may offer limited pre-existing conditions coverage; others may offer acute onset of pre-existing conditions coverage.” This latter cover, he explained, refers to ‘a sudden and unexpected medical situation related to a pre-existing condition that requires immediate medical attention’. However, he added, “Even if insurance companies claim to cover pre-existing conditions, it may only be covered given certain circumstances and there are likely many limitations and restrictions applicable in the fine print.”
Medically screened products – online or via other means – where they exist in Europe are limited too, Powell explained: “While there are a few medically screened products available to EU citizens, they are only available in English. The only real exception appears to be a product offered by Allianz in Italy called ‘Globy Rosso’, but it does not screen customers.”
Assessing risk and covering pre-existing conditions is, without doubt, a tricky business
UK retailers, Powell told ITIJ, tend to ask customers to declare much more around medical conditions pre-sale, as well as flagging key terms and conditions.
The more complex the condition, the more problematic it becomes for people to find travel cover for that illness, said Dr Krish Shastri, Medical Director of InsureCancer. For example, many cancer charities complain that it is difficult for cancer patients to find travel insurance. “InsureCancer also receives many enquiries from patients in Europe, Australia, New Zealand, the US, and Scandinavia, [so] it is therefore clear that this is a worldwide problem,” Dr Shastri said.
True cost of claims
Assessing risk and covering pre-existing conditions is, without doubt, a tricky business. AllClear says medical expenses claims account for 40 per cent of all claims received. Chris White, Chief Executive of Southern Cross Travel Insurance (Australia and New Zealand), said the proportion is even higher – at 60 per cent. SCTI’s customers are guided through a set of questions – on the phone or online – about any pre-existing conditions. Once completed, they may be given the option to pay a little extra to cover the additional risk of their condition giving them trouble while overseas. If they don’t wish to pay, they are not covered.
Insurers must also assess different factors, such as weighing up the cost of treating a person who has a heart attack in Fiji, for instance, compared to the cost of the same event happening in the US. “The cost of returning them home to New Zealand or Australia would also be different in each case,” said White.
Advances in medicine, improved data analytics and growing skill and experience in travel insurance are making it possible for SCTI to reduce its own blanket exclusion list over time. “Reinsurers also play a part,” explained White, “helping us spread the risk. As we gain greater understanding about each medical condition, SCTI endeavours to provide cover for it.”
But, what would be transformative, say insurers, is if consumers had a better understanding of what the term ‘pre-existing conditions’ really means. As White puts it: “At SCTI, we are very aware that pre-existing conditions may be confusing for customers. A customer may think that, because their condition is stable, controlled and well managed, it doesn’t qualify as a pre-existing condition.”
Customer education is key
Chris Rolland, CEO of insurer AllClear, agrees. Customers failing to fully disclose all their medical conditions, combined with a lack of understanding of exactly what a policy covers, continue to cause disputes. “There are instances where people believe they only need to declare the most serious of their conditions, or do not realise that you need to inform your insurance provider of a change in medical circumstances,” he said. “Some people think that if a condition is being managed through medication (e.g. for something as common as high blood pressure or asthma) then it doesn’t need to be declared too.”
Verisk’s Beven believes the key is explaining to customers at the point of sale the importance of declaring any condition that may impact on their insurance policy. “I think some sellers could do a better job of explaining to customers that there can be significant consequences attached to non- or under-declaration of medical conditions, and perhaps with examples of the medical costs that they could be expected to pay if their insurance does not.”
Doctors may also require education too, said Blackman, as they don’t always fully understand the consequences of someone falling ill abroad and, in some cases, perhaps shouldn’t have permitted them to travel in the first place: “Their GP has given their blessing for them to go, usually accompanied with a comment like ‘Make sure to take out a good travel insurance policy’.” What GPs don’t sometimes fully understand, though, is the effect that a long-haul flight, or a very dry, humid or high altitude destination may have on a condition. The Association of Travel Insurance Intermediaries (ATII) in the UK is in the process of producing a GPs guide to assessing Fit to Travel in conjunction with the Department of Health and NHS UK.
what would be transformative, say insurers, is if consumers had a better understanding of what the term ‘pre-existing conditions’ really means
The UK’s Ombudsman says that some complaints it receives involve blanket exclusions for pre-existing medical conditions. More complaints, however, concern individually underwritten policies, where the policyholder has gone through medical screening either online or in a telephone call, and it’s down to the minutiae of whether or not something should have been covered. “We also see complaints where consumers have failed to disclose anything at all – as well as cases where they have disclosed some but not all of their medical conditions,” said Matthew Allinson, Policy and Communications Adviser at the Ombudsman. “A small number of complaints that we see are about the ongoing duty of disclosure and significant changes in health.” However, the types of issues the organisation sees have largely stayed the same in the last few years, he said. “The clarity of questions asked by insurers is generally improving,” Allison concluded.
Not for everyone
Of course, there are limits to medical online screening, Verisk admits. Insurers using more traditional methods may be more appropriate in some cases. Indeed, basic screening for more mainstream products may miss vital pieces of information when dealing with more complex conditions, said InsureCancer’s Shastri. Using online screening, for example, someone with metastasised prostate cancer may not be asked whether they are on hormone treatment, which is considered the gold standard for prostate cancer treatment these days. A company that assesses risk in patients with serious disease through more traditional interview methods, though, would discover this. That the patient is on such treatment may mean that they are far more stable than the software assumes. “InsureCancer is the acknowledged ‘insurer of last resort’ in the cancer travel insurance market,” said Shashtri. “Keen to live up to their brand values, many insurers therefore routinely signpost their declined cases to InsureCancer.”
Perversely, increased segmentation may actually be leading to less choice for some. In a recent paper published on coverage for cancer sufferers, UK regulator the Financial Conduct Authority (FCA) said: “This is a nuanced picture and can create issues for those consumers who represent a higher risk to insurers. Those who were likely to have benefited from lower premiums in the past, as a result of larger risk pools, could now find there are less options open to them and that they have to navigate an increasingly complex and confusing market to find insurers willing to cover them.”
Cancer sufferers, in particular, face a broad set of challenges when attempting to navigate the travel insurance market
Essentially, it said that some companies opt for a lower risk part of the market – in other words, to cover only the young and the fit. Others may be prepared to take the slightly greater risk and cover people with slightly more pre-existing conditions. These companies then price policies to attract the segment they want to serve. The effect is, according to the FCA, that few companies are in reality providing sensibly priced insurance to cancer sufferers and instead of imposing exclusions, insurers are offering customers they may not want to serve extremely high prices; one quote reached £10,000. It may be that this kind of extremely high premium quote happens as a result of agreements between insurers and brokers whereby the insurer has agreed to offer quotes to every single customer that comes through the broker’s system. The reality, though, is shown in the premium price – they do not actually want to offer coverage to that person, and so price themselves out of consideration.
The FCA said it recognises that some consumers may fall outside a firm’s risk tolerance and that these companies are not obligated to provide cover at a specific price but has urged insurers to adapt to the realities of the market and customers’ lives. “Cancer sufferers, in particular, face a broad set of challenges when attempting to navigate the travel insurance market, such as being rejected or quoted what consumers view as prohibitively high premiums, being offered complex exclusions, or difficulties in finding specialist insurers who are unlikely to be on price comparison websites,” it stated. Cancer sufferers, it said, are just one of many groups of patients who are underserved. As a result, the FCA will work with key industry stakeholders to create a new service that will redirect customers to specialist providers. This new signposting service, it is hoped, will make it easier for customers with complex conditions to find insurance, something that Hayman of Free Spirit believes still needs work. “There are a wide range of providers to cater for the full range of medical conditions,” he noted. “However, the industry does not signpost well to specialists, leaving people at risk of travelling without cover or having to go through many channels before they find a solution.”
Hayman went on to pose an interesting question: “In my opinion, medical screening is no substitute for an adequately rated product. Over the past five years, premium levels have tumbled, whereas medical costs have increased. It begs the question; would the cost of screening, in terms of fees and fulfilment, be better applied to the bottom line?”
Developments around the world
While there are still difficulties for some people with pre-existing medical conditions in accessing appropriate cover for a price they consider fair, the UK market has come on in leaps and bounds in recent years. Elsewhere, too, progress is being made. Fit2Trip in Europe will perhaps be the first of a new wave of insurers offering insurance to Europeans, while in Australia, moves have been made to offer cover to people with mental health conditions. And in Canada, improved medical screening for conditions is resulting in improved coverage, although there remain the perennial problems of under-disclosure and not reading exclusions within policy details. No system is perfect, but as screening programmes continue to gather data and become more sophisticated, the ability of insurers to accurately predict risk and offer their customers the right insurance will improve. ■