New COVID waves highlight old problems

As much of the world remains in the grip of third and fourth waves of Coronavirus the IPMI market has remained resilient and while opportunities remain for underwriters and intermediaries alike, the pandemic has highlighted the need for changes to be made.

The rapid rise in the level of infections in countries across the world has seen many countries reintroduce measures that severely limit or outright prohibit international travel in an effort to reduce the spread of the virus.

This has created a crisis for international firms and their employees, with some unable to travel to new roles whilst other have been forced to remain in place long after their time as an expat should have come to an end.

IPMI market performance

However the performance of the IPMI sector has remained positive despite the challenges members’ face.

Individual IPMI performance has been especially strong as expats and wealthy local nationals are understanding the value in being properly covered and have been looking to adapt policies to ensure they have appropriate cover if or when needed.

Challenges for the group market have been more marked but there are signs of more positive performance. Insurers’ results have been strong as the cancellation of all but non urgent procedures has seen a sharp drop in claims. However, premiums are still on the increase as underwriters brace themselves for an uptick in claims levels as the pandemic eases and postponed procedures are carried out.

In a surprise response to Covid, many insurers are now also dropping the traditional pandemic exclusions from their policies.

The outlook for COVID-19

World Health Organisation Director General Dr Tedros Adhanom Ghebreyesus, speaking last week said the world was faced with a 18-24 month process to get to a point where COVID could be managed and only then if the world solved the current vaccine imbalance.

“The global failure to share vaccines, tests, and treatments – including oxygen – is fuelling a two-track pandemic: the haves are opening up, while the have-nots are locking down,” he warned. “The longer this discrepancy persists, the longer the pandemic will drag on, and so will the social and economic turmoil it brings.”

Dr Ghebreyesus added: “I have called for a massive global push to vaccinate at least 10% of the population of every country by September, at least 40% by the end of the year, and 70% by mid-next year. If we can reach those targets, we can not only end the pandemic, we can also reboot the global economy.

“I am often asked when the pandemic will end. My answer is equally simple: the pandemic will end when the world chooses to end it. We have the tools to prevent transmission and save lives. Our common goal must be to vaccinate 70% of the population of every country by the middle of next year.”

Where next for the IPMI sector?

Insurers have seen a change in the approach to IPMI from members.

Across the world, there continues to be a reduction in the numbers of members accessing routine care, with many having been encouraged not to do so by governments who are keen to ease the strain on healthcare facilities currently struggling under the weight of the global pandemic.

In recent months there had been a view that the numbers of postponed procedures – which were now being rescheduled – was rising, but third and fourth waves are likely to push back those procedures as international health services again look to focus on the rising number of COVID patients.

Earlier this year Aetna reported that, in its study of members, one in 10 expats will not go to the hospital for a medical emergency during the pandemic.

Fearful of losing touch, insurers have been looking to find ways to engage with members via telehealth and other methods of virtual support.

Not surprisingly many expats want to move back home, or to somewhere with better access to healthcare. This has come with moves to ensure their family members are covered by more enhanced IPMI amid fears for the health of loved ones.

What COVID has also done is highlight the long standing issues faced by the IPMI sector when it comes to their products and distribution.

The complexity of the product has become ever more of an issue given the inability for face to face discussion between prospective members and intermediaries to examine the options, the coverage and how the policies will react. Price remains an issue and with expats, uncertain of their futures, looking at the costs of cover despite their fears over the pandemic. It has led to some looking to reduce the level of cover for outpatient and non-urgent procedures to ensure they have enough cover in place should they fall seriously ill.

Questions relating to destination and plan portability have become common given some locations don’t allow citizens from another country to enter because of the pandemic, and high rates of positive cases. At the same time, some countries now mandate specific Covid-19 coverage for anyone trying to get a visa and enter the country.

It has created a need for underwriters and intermediaries to be fully aware of the current and ever changing regulatory requirements for members across the world.

The sector is rapidly looking at how technology can meet many of the challenges, via the simplification of products and the ability to contrast and compare policies in a way which can be easily evidenced to clients. There is also a drive to use technology to reduce frictional costs and speed the ability for coverage to be enacted from quote to bind.

While Dr Ghebreyesus believes the world has it in its power to end the pandemic, technology is creating the power for the IPMI sector to solve the issues which have become more acute during the pandemic.

The question remains is the industry willing to undergo the required evolution?