International PMI: The local national dilemma

“We see very little evidence across our business that high net worth local nationals represent a worse risk than traditional expatriates,” he says, pointing out the fact that they will be much more familiar with local healthcare provision than expatriates. He agrees that it is important to have a provider strategy in place in order to “ensure reasonable and customary charges”. Bupa launched a partnership with Africa Medilink Ltd in July last year (its first network outside the UK) in a bid to tackle “overpriced and unpredictable” claims from some doctors.

“If you have good underwriting, ask the right questions and charge the correct prices for the product then the risk is no worse whoever you are insuring,” says Slee.

While intermediaries report requests from clients for one plan, Healix’s Cassidy warns that the ratings for covering both expatriates and local nationals “have not settled down yet” and agrees with DKV Globality’s Earnshaw that the two should “probably” be kept separate.

“To stay within the law, you should keep expatriates on a different plan,” he concludes. “That way you can give nationals their own plan, but be more contained. You have to use a local insurance company who will offer you a ridiculously low price, so why not take it?”

Aon’s Ball agrees that local can be best – that it makes sense to look for local policies in countries with a very strong domestic delivery of medical insurance. In Kenya, for example, Aon will generally recommend local policies which meet the expectations of local nationals. Ball points out that it can be difficult to revert to “significantly cheaper” local policies once international cover has been put in place.

One option for expatriates in areas such as Abu Dhabi (where the government has ruled that they must take out insurance from a local provider in order to secure a visa) is to take out additional insurance from an international provider.

“What we have found is that the local product that you need for visa requirements is actually very, very cheap and the cover it provides is not what an expat would want,” says Aviva’s Turner. “So expats are generally amenable to buying a local product and then using our product.”

Source: UBS, Prices and Earnings 2009

*Weighted index based on wage figures and working hours of 14 professions

**Cost of weighted shopping basket geared to Western European consumer habits containing 122 goods and services (price level without rent)

NEW YORK

100

100

COPENHAGEN

125.5

108.4

TOKYO

74

102

LONDON

69

84.6

DUBAI

38.3

84.9

HONG KONG

33.7

80.9

MOSCOW

26.3

55.6

RIO DE JANERIO

21.7

59.6

SHANGHAI

15.1

64.1

NAIROBI

8

49.2

Rachael Floyd, operations director for PMI Global, the newly-launched international division of national specialist intermediary PMI Health Group, says that locally hired expatriates (for example, Indian nationals hired by organisations within Abu Dhabi) would usually be given a “budget” form of cover, meeting minimum requirements set by the authorities, while expatriates sent across from the UK could expect more comprehensive cover.

She also points out that as an intermediary “pulling together” services in addition to brokering (such as a global EAP, access to nurses and health screenings) PMI Global can harmonise other benefits (beside insurance) for both expatriates and local nationals.

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