David Eline had the opportunity to speak with Lourdes Peters, C.E.O. of World of America Group, on how she sees the current market and why clients are increasingly looking at the standard of cover rather than a sole focus on price.
The COVID-19 crisis has defined the conditions for the current market, and Lourdes believes it has also heightened the awareness of the requirements for adequate and sufficient cover.
“Today, our markets are more aware than ever of the importance of having international health insurance,” she explains. “First, the pandemic made it clear your health and those of others can change overnight. Second, I think that a clear message has reached all of us who technically consider the word ‘market.'”
“Both clients and advisors have to go more in-depth and analyse what products, companies, and plans cover the existing world situations and not just in their home countries.”
It created several questions for clients and those who advise them and underwrite their medical risks. How does the current environment affect you and the care you received? Is the vaccine going to reach each country equally? Are these vaccines approved through the American Medical Association (A.M.A.) in the U.S., the WHO, and other credited organizations within each country? Will any related issues arising from the vaccine be addressed by the companies and their products?
“In other words, today, we feel that our potential clients are more willing to consider investing in the proper health insurance for themselves, their families, and their employees,” Lourdes explains.
As the COVID-19 vaccines are distributed globally, countries are considering the use of vaccine passports. These so-called passports have existed for many years, such as the yellow card that confirms if you have had any vaccine required to enter countries where malaria, yellow fever, amount others. In the future, we might see that everyone will have to present a travel passport or card wherever you travel. And there might be the case that unless you have proof of vaccination with a vaccine that the national government has approved, you will not be able to travel. In South America, Panama has been studying the possibility of such a passport. It could become the first country in LATAM to demand proof of vaccine for travel into the country and a negative Covid-19 test required by airlines now.
It has resulted in clients placing more importance on the level of cover within their policy. Those traveling abroad want assurance on the standard of healthcare they will be able to access. Clients are keen to become more aware of what they are getting in their policy. It is not just a question of premium but also the cover level; one perfect example is evacuation; does the policy include this, or do you have to acquire it separately.
“I think it will take some time before herd immunity can take effect, even as the vaccine is being applied and distributed,” explains Lourdes. “As such, there is and will continue to be a high demand for health insurance and, even then, our clients want to be assured that they have full coverage no matter when or whatever happens to them or their family.”
However, she adds we are facing an economic crisis that generates much uncertainty. “Remember that people always tend not to increase their expenses during financial problems, and that uncertainty becomes a barrier to a buying commitment. But it is a temporary barrier. Sooner or later, the economy will regain its colours, and we will have clients who are more sensitive and willing to be insured. That makes me feel optimistic about the market’s potential in the coming years.”
Lourdes says she believes now is when the industry should consistently remind everyone of the importance of having adequate health insurance before facing a severe illness, such as those we have seen as a result of the pandemic. It is much easier and less expensive to find benefits that cover all your needs when you are healthy. Shopping around for coverage when you have a pre-existing condition can add restrictions and cost to a policy, and, in some cases, coverage might not be approved.
“Since we are all facing new challenges. We have to be very active and vigilant of these changes.”
One noticeable thing is the change in the client approach.
“We have noticed that our clients are very interested in comprehensive insurance, more than less expensive insurance,” Lourdes explains. “They want to know which coverage is best for them during the pandemic, how are they protected, and in what areas does the coverage extend to. We are now being asked questions that we’ve never faced before.” Most companies don’t have a broad explanation of a pandemic; therefore, you need to be very informed and help as much as possible to find the right coverage and right answers at all times.
However, some companies have placed exclusions on pandemic coverage in certain products, a move that Lourdes can understand.
“We are all in unchartered territory, and just as the medical field is finding new cures and new treatments, so are the international health insurers forced to navigate new risks. They face the issue of what to cover when, where, and how.”
The crisis has also highlighted how expensive and complicated medical treatment can be for anyone without insurance, even ignoring where the condition occurs and if the person or family can freely return home.
The pandemic is forcing insurers to examine the potential size and scope of their exposures. The length of hospital stay can vary significantly, and the virus has the potential to infect one or multiple people or family members under one policy. There is also the question around whether treatment is provided domestically or internationally in counties such as the U.S., where medical care costs can be high.
Lourdes revealed World of America had conducted a survey across its insurance advisors in 24 countries. Of those surveyed, 63% replied that their sales during 2020 remained stable, and 6% said they had increased their sales and retained their clients by making changes to deductibles or moving them to other plans. Interestingly, 43% believe that they will remain stable in 2021, and 40% think they will grow as protection demand increases.
“As time passes, we learn more and more about the consequences of the virus,” adds Lourdes. “It doesn’t just affect the lungs, the heart, the nervous system. According to the World Health Organization (WHO), it also produces organ failure, blood clots, acute kidney injury, mental fog, and psychological issues. Which creates additional treatment uncertainties and prolonged medical care, such as in the case of the “long-haulers,” people that continue to have conditions well after being Covid-19 negative, and continue to suffer lingering effects of the virus.”
Therefore, many people who overcome the virus can continue facing ongoing medical expenses and subsequent, long, and expensive treatments, explains Lourdes. The challenge is to adequately address these expenses and treatments in many countries with limited medical infrastructure; this can apply to certain countries, Latin American, and other parts of the world.
However, Lourdes believes that the past 12 months will be viewed like a year apart.
“Likely, 2020 will forever have an asterisk by it, since it as it has been such a different year for everyone and especially for the insurance market,” she explains. “The question that remains for some is, whether it will be seen as a blip in the figures or whether this is an indication of a longer-term trend.”