Choosing skilled negotiators and expert brokers is becoming increasingly important when navigating the world of international private medical insurance. According to Aon Hewitt, the average costs for global employer-funded medical plans are anticipated to grow by 9.1% this year.
Wil Gaitan, senior vice president and global consulting actuary at Aon Hewitt, approved said on the release of the figures: “We expect medical costs to continue to escalate around the world due to global population ageing, overall declining health, poor lifestyle habits particularly in emerging countries, continued cost shifting from social programmes and an increase in utilisation of employer-sponsored health plans.”
But these figures may well mask a more complex situation when it comes to pricing premiums, according to IHC’s head of international, David Heppard. “Cost increases can come around for a variety of reasons, and these differ according to the type of scheme,” he explains. “Smaller schemes are also likely to see prices set according to age bands, and policyholders will see higher premiums above the age of 45, for example,” says David. “So, frequently, companies will see their premiums increase not simply because of medical inflation, but also because, as time goes on, more of their staff have moved up into a more expensive age band.”
Larger corporate private medical insurance schemes, meanwhile, will usually see claims-related premiums. “As a result, a firm might have a good year with few claims, and may even see premiums fall or at least remain the same.”
For Heppard, an average increase in global costs gives limited information. After all, cost increases vary enormously from region to region, and even country to country. “International insurers are facing challenges as discrepancies in the cost of private medical treatment vary increasingly across the world,” he says. “Costs have increased far more in certain parts of the world than in others; one area might see increases of 20% in medical costs, while another may only see 3%.”
With such an uneven playing field, the challenge is to find cover that suits a company and includes the necessary regions, while keeping premiums at the right levels. It is essential, then, to take expert advice to ensure a policy is the right fit and at the right cost.
To find out more about IHC’s international offering, contact David Heppard on 020 7353 4099