Asian Nation
The fast-growing Asian economies continue to attract an increasing number of expatriates – both from Western countries and regionally. Steve Conway offers advice on the types of IPMI policy sought by this international workforce
The fast-growing Asian economies continue to attract an increasing number of expatriates – both from Western countries and regionally. Steve Conway offers advice on the types of IPMI policy sought by this international workforce
Employers with international workforces recognise that their expatriate employees have particular needs, including access to suitable housing, work permits and visas, as well as support in adapting to a new culture. One of the top demands of all expatriates, however, is for easy access to top-quality healthcare. It is their guarantee that they will be able to access emergency and routine healthcare for themselves and their families wherever they are in the world.
The Asia Pacific region is not only a magnet for Western expatriates, there is also a growing regional market, with local business people relocating and travelling frequently between countries. In particular we are seeing a greater number of regional expatriates seconded to countries and regions with strengths in manufacturing, services or with strong global trade links.
One of the most important benefits for expatriates and local business people is emergency medical evacuation and repatriation cover
In addition, there is growth in the number of high-net-worth Asian residents who are buying international private medical insurance (IPMI) to benefit from access to the highest standards of healthcare in their home countries as well as the option to electively seek treatment overseas if required.
Growth markets
While there is a steady and growing demand for IPMI across the Asia Pacific region, there are undoubtedly hot spots where demand for cover is growing more strongly. As well as China, these include Singapore, Indonesia, Malaysia, Vietnam and Thailand. The needs of Western expatriates, regional expatriates and local business people are essentially the same – they need access to topquality healthcare when they are away from their home country. Some Asian countries and regions have more limited healthcare facilities, therefore access to emergency medical evacuation is considered essential.
We are finding that in Asia, premium price is not the only driver for sales. Clients are increasingly also seeking benefit-rich products, with the key benefits being cover for inpatient and day care treatment in hospitals, outpatient treatment, treatment for chronic medical conditions and evacuation and repatriation cover. Maternity care is offered on some plans, but is only really important for expatriates who are planning families. In addition to this basic list, there are many other benefits that are becoming increasingly attractive to clients, such as dental benefits, travel benefits, compassionate emergency visits, and the availability of routine health checks, often known as ‘wellness’ benefits. With inpatient treatment, it is important to understand where the insured will be able to access treatment. Will they be able to access a high-end Western-style hospital, or will their cover only permit them access to a more limited list of local or regional hospitals?
Care needs to be taken when buying IPMI that the provider is properly licensed to offer cover in the jurisdiction the international businessperson or expatriate will be based
One of the most important benefits for expatriates and local business people is emergency medical evacuation and repatriation cover, especially in certain parts of Asia where healthcare systems are less well developed. If a serious medical emergency occurs, it is essential that the insured can be transported to the nearest appropriate medical facility, by road or air, for treatment. For people in more remote or underdeveloped areas, evacuation must occur quickly and effectively, without long negotiations over payment or delays because of doubt over the extent of insurance cover. It is hardly surprising that there are some differences between promoting IPMI plans to regional expatriates and Western expatriates, but these are less marked than many would expect. Western-style insurance benefits and restrictions are widely understood in Asian markets and financial literacy tends to be high, although we have come across the odd exception – for example, where a proposal form and claim form were received from the same person on the same day; but this is the exception rather than the norm. There is often a greater expectation of face-to-face contact and local sales and servicing, but such standards of service are equally valued by Western expatriates.
The cost of cover is always a factor in promoting IPMI plans, however. In some countries, China being good example, being able to afford and pay for the highest levels of cover is valued as an indication of the high status of the individual, furthermore, across the Asia Pacific region, annually renewable plans are by far the most popular policies issued.
International vs domestic plans
IPMI plans are also popular among local business people due to the advantages they offer over domestic plans, which are only designed to provide cover in an individual country. High-quality international plans allow people to travel to the nearest centre of excellence for treatment. Take, for example, a Chinese businessman based in the Binh Duong Province of Vietnam; he may well prefer to fly to Singapore to access the very best regional healthcare rather than receive treatment locally. While this may sound on the face of it to be an expensive luxury, he is likely to receive better treatment at a regional centre and be back to work quicker than if he were to attend a local hospital where standards of care may be lower – saving considerable expense on replacement staff or lost business.
International plans, typically, are also portable, allowing people to move from country to country as their skills are required in different jurisdictions. A marine engineer could move from the Japanese shipyards to Hong Kong and then on to Singapore. A domestic plan would thus instantly become redundant as the insured moves from country to country, and it could even delay their ability to move if new arrangements cannot be set up quickly enough in their new host country. IPMI would cover all the countries within a member’s geographic range of cover and no new arrangements are needed as their work takes them from one country to another.
Finally, there is the issue of pre-existing medical conditions. If an insured member in Jakarta buys a local plan and then suffers a heart condition, it will most likely cover the cost of their treatment. However, should the member then wish to move to a new posting in Vietnam, their local Indonesian plan would not be portable and they would need to purchase a new policy for Vietnam. Unfortunately, their heart condition would then be classed as a pre-existing medical condition, which a new insurer would be unlikely to cover, or would require stringent additional underwriting. With an international plan, however, this problem would not arise as their plan would be portable from Indonesia to Vietnam and would stay in force within all countries covered by their overall geographic area of cover.
key benefits being cover for inpatient and day care treatment in hospitals, outpatient treatment, treatment for chronic medical conditions and evacuation and repatriation cover
There are also a number of jurisdictions where ‘local’ private medical insurance plans are widely available. However, they are really only suitable for the local population, providing too limited coverage for a Western or regional expatriate’s requirements. Often, these local plans will not cover the cost of some complicated and expensive inpatient treatments and exclude emergency evacuation and repatriation cover.
China and Singapore are good examples of locations with a wide proliferation of these plans. Care needs to be taken when buying IPMI that the provider is properly licensed to offer cover in the jurisdiction where the international businessperson or expatriate will be based. It is all too easy to buy cover from insurance companies selling cover from offshore locations, without having proper regard for local licensing laws and, more importantly, local servicing. Local servicing is important because members want to have their cases managed by people who speak the local language and can work in ‘real time’ without having to worry about time zone differences.
China offers a good example of the importance of using a fully licensed insurer. In effect, the insurancecompanies that offer health insurance in China fall into three groups: ‘legal domestic’, i.e., those sold by locally licensed insurers; ‘legal international’ i.e., those sold by international insurers who are either licensed to sell in the region or who market products through locally licensed strategic partner insurance companies; and unlicensed international providers. Legal domestic health insurance plans are typically sold by the large local insurance companies and generally offer health insurance cover in China only, providing relatively limited benefi ts for an inexpensive premium. These plans are geared to the needs of the local population and will almost certainly be inadequate for people seeking Western-style care, as local plans would generally not have coverage outside the country. It may be that if a regional or Western expatriate is not intending to travel or return to their home country then a local policy might suffi ce, but this will be the exception, rather than the norm. Legal international plans are those offered by IPMI companies that are either licensed in China or who market their products through locally licensed strategic partners. These can offer full worldwide cover and broad benefi ts and are ideally suited for international expatriates. While these plans are more expensive than the local plans, many people find the premium more competitive than those charged in the US or Europe.
Unlicensed international plans are illegally sold into China from offshore insurance companies that are not registered to trade in China; these generally offer full benefits but for a full international premium. Although they should deliver their intended benefits, there is no legal recourse in China if there is a dispute and there is always a risk that the government will intervene and stop local medical providers from dealing with these insurers.
Across the Asia Pacific region, annually renewable plans are by far the most popular policies issued
Expatriates also need to take care that they are buying insurance from a licensed insurance salesman. Agents and brokers have to be licensed to sell insurance products in China and, while it may not be illegal to purchase a product from an unregistered source, it is certainly illegal to sell it. Therefore, expatriates should always confirm that their broker or agent is legally licensed to sell insurance in China or alternatively purchase their plan directly from the insurance company.
The number of local business people buying IPMI across the Asia Pacific region, coupled with continuing demand from expatriates, is making it increasingly important for providers to have local representation on the ground. A local office in key locations such as China and Singapore means that the provider will have a more in-depth understanding of the market, have direct experience of local healthcare and be able to provide assistance to members on the spot. Providers trying to offer services from remote locations are increasingly finding themselves at a disadvantage in a strong growth market. The Asia Pacific region continues to be a magnet for expatriates demanding high-quality international private medical insurance. Increasingly, there is demand for high-quality cover from local business people who travel extensively around the region and demand the type of cover, service and flexibility offered by international plans. Buyers must, however, beware unlicensed providers, and should make sure that they can access help and assistance from locally based insurers.