How do brokers go about setting up a specialist unit to deal in iPMI?
International private medical insurance providers are forever urging brokers who don’t specialise in the field to get involved in what is undeniably a potentially lucrative market. Emily Borkowska goes in search of some pointers for brokers wanting to set up a specialist division to do just that.
The stagnation of UK private medical insurance (PMI) is causing more brokers to turn to the international market to grow their business. The iPMI market is a natural step because it builds on brokers’ existing expertise and staffing and it has the potential to be very financially rewarding.
One of the most appealing characteristics of iPMI is that it tends to be more resilient against economic downturns than the UK market. Expatriates do not usually have access to a national health service, so iPMI is seen as a must have rather than a luxury product. In addition, the global nature of the product means that there is nearly always an area that is booming and seeing an influx of expats.
“In addition to a high renewal rate, iPMI also benefits from a significantly higher average premium and a long customer life,” says Carl Carter, managing director of IMG Europe. “Because the commissions tend to be more even between new business and renewals there is not the incentive to ‘churn’ customers. This means that there is not the pressure each year to maintain new business at super high levels as there is not the cliff-hanger drop of commissions you see on UK PMI between year one and renewal.”
Brokers who wish to get involved in the iPMI market will generally choose one of two routes: setting up a specialist iPMI division or upscaling their UK practice. One brokerage that has set up a specialist team is PMI Health Group.
“We pool expertise to include technical knowledge of insurer products, benefits and services, combined with regional expertise to focus on the ever changing local regulations,” says Chris Beardshall, global specialist at PMI Health Group. “We also ensure that we provide regular advice and updates to our clients, recommending the most appropriate products and managing their expectations.”
If a broker decides to go down this route they will need to hire someone to set up the division and it is therefore usually the larger firms who can afford this option. Andrew Seale, regional general manager for UK, Middle East, Italy and Scandinavia at Allianz Worldwide Care, says firms should hire someone who is an expert in the international field.
“If a firm hires an international expert they could easily train him on the domestic side, and in return he could train up the team on international matters if required,” he says.
A cheaper and more common way for small to mid-sized brokers to enter the iPMI market is to grow an international business within their domestic PMI division. They could allocate a couple of staff to spend, say, 50% of their time on international work and 50% of their time on domestic work.