Analysis: PMI at home and away - funding treatment in the UK and overseas

As increasing numbers of people consider going abroad to receive medical treatment, Tessa Norman takes a look at two new – but very different – products whose developers say can help them to fund it

It is often said that the private medical insurance (PMI) market lacks innovation.

But in June a product was brought to market which the industry credits with being a genuinely new idea: a product which combines UK diagnostics with foreign treatment in an end-to-end package.

Passport2Health – trading name of company Passage2Health, formed by a team headed up by industry stalwart Frank Levene in April 2011 – is offering individual and corporate customers a PMI plan comprising private diagnostics in the UK, treatment in a European hospital and travel and accommodation for the patient and a companion.

Passport2Health claims that the lower cost of European healthcare means its premiums are up to 50% lower than traditional UK PMI, and with prices starting at £19 per month it certainly appears to be an antidote to the escalating prices of the domestic PMI market.

And just days after Passport2Health announced its offering, Allianz Worldwide Care launched a product which, although aimed at a very different market, similarly combines domestic and foreign treatment.

The international PMI (iPMI) provider is targeting the domestic UK market with its Signature plan, aimed at ‘upper end’ senior management executives.

The plan offers a comprehensive suite of cover including cancer treatment, chronic conditions, maternity, routine health checks, dental and optical treatment, and allows patients to choose whether they are treated inside or outside the UK.

While the product offerings are very different, both providers are seeking to take advantage of the fact that treatment costs can be cheaper overseas and claim to be meeting an unfulfilled customer need.

So what are the advantages and drawbacks of these products and do they represent a new direction for the PMI market?

Hybrid models

“Both these plans are moving towards a hybrid of UK PMI and iPMI which we believe is down to globalisation and a trend that is likely to continue,” says Paul Andrews, a senior associate in the international consulting group at Mercer, the global HR consulting firm.

“As a knock on development for example, we may see a UK plan where if you can’t get treatment on the NHS within six weeks you can be treated overseas.

“We live increasingly in an international sphere and we cannot just have products and services that stop at the water’s edge.”

Similarly Levene, whose CV includes a six-year stint with Allianz Insurance Group – not Allianz Worldwide Care itself – in roles such as CEO of Allianz Life South Korea, argues that the future of healthcare lies in globalisation.

“I do not see our offering as a niche product,” he says.

“People have got second homes, they travel all over the world; particularly the younger generation, which is where we expect to find a lot of interest,” he says.

Meanwhile Allianz Worldwide Care is looking to target those who are internationally mobile in their work life as well as personal life.

“If you take London, a big financial centre, there are thousands of expats working here or people with international links, whose needs can be two fold,” says Andrews.

“For instance, a number of my clients are multinationals who have rolling assignments, and even for UK employees, they may travel overseas regularly or have a house abroad which they use at weekends or during holidays.”

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