The international PMI industry has been characterised by optimism and confidence over recent years but insiders are bracing themselves for new challenges in a tougher global economic climate. Edmund Tirbutt reports
The credit crisis, as the UK government is ever intent on reminding us, is very much a global phenomenon. Nevertheless, the international private medical insurance (PMI) market has remained surprisingly unscathed to date.
Experts commonly volunteer growth rates for the last year of around 20% to 25% for the field as a whole, and the figures estimated by some individual companies are more spectacular still – over 150% in the case of Morgan Price International and 45% for InterGlobal. Even Bupa International, which is the largest player with over 800,000 customers, expects to achieve double digit sales growth for 2008, and this should by no means regarded as a steady or average performance because the sheer number of new customers it is acquiring overshadows other providers growing from much smaller bases.
There is no shortage of provider spokespeople who point out that international PMI has proved remarkably resilient during previous global economic downturns and who feel that a worst case scenario is likely to amount to no more than a 5% fall in growth. They emphasise that good quality healthcare while working internationally is seen as essential by most employers and is highly valued by those on overseas assignments, and that the increased use of direct billing is enabling expats to access care more easily and with increased frequency.
Similar optimism in the individual market is supported by research demonstrating that huge numbers of people are disillusioned with life in the UK and would prefer to live elsewhere. Survey results released this October by Bupa International found that almost three quarters of expats were concerned about the economic downturn and, in particular, the negative impact of currency fluctuations. Forty per cent were affected by falling property prices and over a third were concerned about the impact that the credit crunch will have on their pensions. Nevertheless, over three quarters believed that their lifestyle is better in their new country of residence.
AXA PPP healthcare reports a 15% rise in the number of enquiries it has received for international PMI during the first half of 2008 and believes that the number of people leaving the UK could exceed 500,000 this year. The company’s enquiries data suggests “Britain is increasingly a nation of wannabe expats” and that many people are now considering new destinations like Bulgaria and Cyprus to take advantage of cheaper living costs and better weather.
Carl Carter, managing director of IMG Europe, the insurer, says: “As the UK economy slows down it is predicted that many UK PMI policyholders may save money by lapsing and falling back on the NHS, but there has never been a better time for brokers to get involved with the expat medical insurance market, which used to be a niche but is now one of the fastest growing sectors of the insurance market in its own right. In most parts of the world the insured need to maintain their cover as there is no local state system to fall back on when money gets tight. Additionally, although some economies may be slowing down, brokers can market international PMI via the internet to other regions across the world.”