Per Bay Jorgensen is widely considered to be the founder of the international private medical insurance (IPMI) market and has been involved in the industry for over 40 years. Currently Board Chairman at Dansk Sundhedssikring, he has held several senior industry positions, including CEO at IHI Danmark, senior advisor at Best Doctors, and Non-Executive Director at Now Health International to name a few.
David Eline, Founder at international private medical insurance specialists DFHE Advisors caught up with Per Bay to get his views on how the market has transformed over the years, and what’s ahead for 2021.
The early years of IPMI
When Per Bay was first establishing his career, the IPMI market was small, niche and largely consisted of people who had taken up residence in attractive places around the world to live and work, such as southern Europe or Florida
The market really started to take off in the late 80s. More people were starting to live a dual lifestyle or move permanently to a new destination. At this point, the true benefit of international health insurance coverage if you were living outside of your main country of residence was beginning to become more apparent.
This change largely coincided with another milestone that was to dictate how carriers could write international health insurance. In 70s and 80s IPMI could be written by correspondence – on the license in the country in which you were established.
This arrangement was changed by international agreements in the beginning of the 90s when insurers had to be more established in the country where they were providing cover. The effect was that many more companies became interested in the international health insurance market because the established IPMI players required a fronting arrangement with local companies in different countries.
These changes caused the market to grow substantially from the mid-90s. The IPMI sector is now a large US$15 billion – US$20 billion annual premium market with substantial opportunities and possibilities.
2020/2021 has obviously been dominated by COVID-19. The pandemic has driven demand for IPMI higher as people look for ways to protect themselves against the disease. This has been especially true with many governments not having assumed responsibility for caring for their country men and women with COVID.
What’s ahead for IPMI?
More digital innovations
In the coming years, we will see insurers introducing more digital innovations. We’ve already seen the likes of telemedicine make a big impact and these new and innovative ways of delivering healthcare will continue unabated, for the benefit of the insurer and their members. This will be the major area of change for the IPMI market in the coming years.
The critical role of Brokers in the eyes of clients
From a distribution perspective, insurers’ broker networks are hugely important. IPMI is a complex product that typically costs between US$3,000 and US$5,000 a year. So whilst you can market the product online, it’s not easy to sell online as a degree of advice is usually always needed.
The support can be provided by the insurance company but this usually falls to brokers who often sit face to face with their customers and can explain the advantages and disadvantages of the different products available to them.
The challenge for brokers however is the number of products and product options on the market from different insurers. This makes it very difficult to get a whole market perspective and to match a customer’s needs with the precise policy that is most suited to their requirements. What’s more, not having access to on-the-spot pricing when the best cover is identified can be frustrating for brokers on the front line looking to close a sale.
Another trend I’m seeing is the move towards more regional offerings. Insurers have begun to recognise that regional offerings can be more suitable than global products for many as the circumstances in different parts of the world can vary so significantly.
Regional product variations also enable insurers to deliver an enhanced level of customer service to the client as online services can be adapted and regionalised to suit a specific market.
In the short term, it will be faster and more cost effective for insurers to adapt their global products to specific regions, but as time goes by, you’ll see an increasing number of ground-up product development to create new and bespoke regional offerings. This will also help to ensure products are fully compliant which is crucial now given the strict nature of regulations across the world.
Opportunities abound in this exciting, growing global market
The IPMI sector remains an exciting and growing global market, despite COVID-19. The potential to innovate and grow further is immense and I look forward to seeing how the market will develop over the years to come.