Global insurers share perspectives on emerging trends shaping the international private medical insurance market.
Mercer Marsh Benefits (MMB) recently brought C-level executives together from across the global insurance market to discuss the future of the international private medical insurance market (IPMI).
MMB’s Global Mobility Solutions leader for Europe, Mark Harris, moderated the discussion with business leaders from global insurers, including Allianz, AXA, Bupa, Cigna, GBG, IMG and UnitedHealthcare joining. Six key trends quickly emerged on issues ranging from tackling rising medical costs to the role of AI and automation to changing international working patterns.
Opening the discussion, David Dodd, Consulting Leader for MMB Europe, shared the findings of MMB’s latest Health Trends Survey, revealing that increasing plan costs are a key issue facing employers. “Per-person medical costs are back to pre-pandemic levels due to factors including inflation, increased utilization and later-stage diagnosis of illness. Globally, a medical trend rate of 12.6% is anticipated for 2023.”
Against this backdrop, insurers are increasingly focused on earlier stage intervention to help prevent high claims developing. “We need to make it easier for people to access care,” observed Martyn Swann, Global Head of SME Distribution at AXA. “It’s about getting people through the gates,” agreed Janette Hiscock, CEO, UnitedHealthcare Global Europe. Asked what insurers were going to do to reduce costs for employers, she added, “It comes back to guided pathways. If employers let us help select the hospital list, we can guide employees to a specialist to reduce treatment time and costs.”
A key area driving recent rising claims costs is mental wellbeing. “Mental health remains one of the top risk factors for medical claims,” says David. “Mental health problems persist, which has a direct impact on the ability for organisations to protect their people and places greater emphasis on putting the ‘S’ into ESG.” Worryingly, the MMB Health Trends 2023 survey shows a third (32%) of employees have less than five one-hour psychiatric counselling sessions covered in their domestic and international plan designs and a further 36% have less than ten sessions.
The Health Trends Survey also revealed that insurers are seeing increasing cancer claims and more expensive cancer claims developing post pandemic. “Cancer is now the top cause of high claims by dollar amount,” explained David. “It’s also the third biggest type of claim condition by dollar amount, after diseases of the circulatory system and respiratory conditions.”
Over half (55%) of insurers globally reported seeing more later-stage illness diagnosis in cancer claims due to deferred care. “It’s not just insurers stating that disrupted care is resulting in more advanced conditions,” he said. “There’s a growing body of published literature regarding impact of disrupted care, with some examples from Japan looking at stomach and pancreatic cancers and France looking at breast cancers in the report.”
Claire Hargreaves, Managing Director UK, Europe and CIS at Global Benefits Group (GBG), said, “Individuals mustn’t be afraid to ask their insurer or intermediary for support. Prevention and early access to treatment centres of excellence must be a priority.”
“How they’re treated during the claims process matters,” said Kevin Melton, Global Head of IPMI at IMG. Arjan Toor, CEO at Cigna Europe added, “The wider impact on their dependents also has to be considered. The mental health impact of a cancer diagnosis must not be underestimated. Employees need help to deal with that as their physical and mental health are intertwined.”
The consumerization of healthcare is driving huge change as individuals assert more influence and control over their medical and wellness care. Insurers are responding, using AI and technology to support the member health journey and reduce administration costs for end users.
Paddy Lawlor, UK and European Head of Sales from Allianz Partners, anticipated a race towards automation to reduce costs, observing that, “Some insurers are already using AI to pay claims and automate fraud detection.”
Arjan said the appetite to use virtual solutions will only go up: “That will address affordability and at the same time create a better customer experience.” A view backed up by the Health Trends survey findings which found that globally seven out of ten (72%) insurers cover telemedicine services that allow employees to chat or text with any suitable doctor or nurse. Almost one in two (49%) insurers are considering providing or covering the cost of apps and wearable technology to allow employees to self-manage conditions. More than one in three (37%) are considering apps that suggest possible diagnosis for simple medical issues.
“We spend $5.1bn on technology in research and development at UnitedHealthcare,” said Janette. “That’s on how we look at AI, predict someone’s health and make meaningful changes to behaviour.” The consumer appetite is there, explained Arjan: “People are willing to use remote healthcare monitoring but do expect something in return. We have a responsibility to improve data use to improve health outcomes through targeted preventative and clinical interventions.”
Claire agreed, adding: “AI can and will move the industry forwards, however it is important not to lose sight of the value of ‘human touch’ when dealing with a customer that has a worrying, sensitive or complex health need.”
Post pandemic many employers are still trying to configure working models that provide employees with more flexibility while maintaining compliance and productivity. Companies are increasingly competing for talent across borders and seeing requests from employees to work abroad as part of a ‘workation’.
International remote working is therefore set to increase as employees choose to undertake more short-term international assignments that might once have been completed by an expat, while expats themselves are opting for hybrid-working models that allow them to return to living in their home country and commuting abroad as necessary.
As Paddy Lawlor, Head of Sales and Distribution, Europe for Allianz Partners observed “The old-fashioned model of expats primarily working in Singapore, London and New York doesn’t exist anymore.” Ray Linnartz, European sales director at UnitedHealthcare Global agreed, saying, “Traditional long-term assignments are going to decrease.”
This new type of international hybrid working also raises questions around the type of benefits offered to employees. Teresa Wighton, Interim General Manager, UK & Africa, at Bupa Global. “Ninety days travel insurance isn’t enough for people who would previously have been expatriates and lived abroad but now want to commute abroad for multiple shorter periods.”
Making it easier for international workers to access timely and preventative healthcare support is critical. Access to virtual services will therefore become increasingly important, as employers continue to determine what ‘the new normal’ looks like when it comes to global mobility working patterns across their organisation.
In the past, price, benefits and service were the priorities for clients. “Pitches now are led with discussions around compliance,” said Kevin: “The constraints of regulation make things difficult. If you’re trying to cover people in 58 countries, you can’t find cover for all of that.”
Compliance issues represent a huge burden for companies because international remote working questions often have to be addressed on a case-by-case basis. Mark noted the trend for admitted insurance solutions is accelerating as government health budgets increasingly become under pressure. Dave Hilton, UK Leader for Global Mobility Solutions at MMB stated, “Employers increasingly want a harmonised global plan. The challenge for intermediaries is to decide where employers should have global cover and where they should get a local plan. Our first priority is to have local MMB colleagues and centres of excellence around the world so that we can deliver the best advice to clients.”
Claire added, “As a conscientious business there will be times when you might have to say, for example, we need to take these two individuals in Asia out and insure them domestically.” Janette agreed, saying, “We will see more partnerships between global players and local insurers. Everyone is making decisions about their business, retreating to their core or being picky about where to go. We might have to push back on some solutions because invoicing is in the ‘too difficult’ box.”
The insurers also noted there has been a recent trend of employers purchasing IPMI for key local national coverage in many markets, which is better aligned to their talent management strategies than domestic cover. This trend is expected to accelerate during 2023.
Despite medical cost increases, 68% of insurers expect employers to make plan improvements this year that will require additional monitoring. Around one in five insurers have also made changes to their underwriting requirements due to the pandemic, and other changes may be on the horizon according to our survey. Employers should therefore be prepared for more complex underwriting and plan design decisions in the market - it is vital that businesses continuously monitor these changes.
The indicators are that insurers are reluctant to make changes to plan designs across their book of business. Mark noted, “We expect to see employers taking a more active role in monitoring plan experience, including high-cost claims, to help ensure there are smaller chances for surprises when it comes to budgeting. Additionally, by targeting a plan’s cost drivers and implementing policies to support prevention, employers can help to mitigate claims risk over the long term.”
Offering employees a consistent and harmonious healthcare plan, regardless of which country they are working in, is therefore set to become a lot more complex but can be navigated successfully with appropriate international benefit management strategies. Our MMB Health trends 2023 research highlights actions benefits professionals can take to step up their game and achieve their goals.
If you would like one of our consultants to discuss the implications for your business, and opportunities to better support your employees, please check the box to request a consultation.
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