The COVID pandemic has proved to be a double edged sword for IPMI underwriters and the wider industry.
The pandemic has driven a huge demand for IPMI products. A new and significant risk to health, combined with the inability of expats to return to their country of birth, has exacerbated the need for international private medical insurance.
It’s a scenario that points to a positive period of growth for the sector as increasing numbers of expats place greater emphasis on sourcing sufficiently robust insurance for their medical needs abroad.
COVID has also accelerated the ability to deliver remote services. However, there’s a darker side to the impact of COVID; one which is increasingly challenging underwriters, brokers and members.
As the worst of COVID subsides and healthcare facilities open up to non-COVID treatments, members who had been forced to postpone non-essential treatment have been able to reschedule procedures. However, healthcare providers are also looking to recover revenue lost during the imposed lockdowns and social distancing measures.
At an online seminar hosted by Health Compass in June 2021, Alistair Dickman, Group Head of Business Development, April International Care in Singapore raised the issue. Dickman explained that, as his firm’s members began to seek to reschedule non urgent procedures, underwriters were seeing medical providers looking to recoup money lost in the past 18 months.
“COVID saw pre-planned surgeries postponed, but in Q4 last year we started to see people return to hospitals for their procedures,” he explained. “What we have seen are hospitals, specialists and dentists seeking to regain income. We have witnessed invoice rises, excess billings, and what we see as charges for needless tests.”
His views were echoed by the market and there remains concern from intermediaries that insurers had yet to recognise the evident rising costs in treatment in recent months which was leaving members with insufficient coverage levels to fund their treatment.
Intermediaries add they have seen a shift in the costs being charged for treatment. The view is that those medical service providers which suffered in 2020 are looking to double their income in 2021, to recoup the lost revenues. As such insurers need to change their covers to reflect the change in costs.
Far from easing, the problem has increased with underwriters concerned that claims inflation is reaching near unsustainable levels. While insurers are increasingly challenging billings, they are also cognizant of the need to ensure that members who have been waiting for procedures, can have them carried out.
It’s a situation that has forced underwriters to examine their broader cost base and find efficiencies that can remove frictional costs to offset some of the claims inflation.
One area is the perennial challenge of product distribution. Technology has already delivered change through COVID and the opportunity exists to build on the necessity to trade remotely, as witnessed over the past 18 months.
It comes with the need to deliver transparency in wording and coverage in order to meet the regulatory requirements to treat the customer fairly. These demands lend themselves to a new breed of covers which can be distributed electronically, reducing the time between proposal submission and quote.
Such a system would also allow proposal forms to be delivered electronically and with it reduce the need for rekeying and inevitable human error, and free up staff time to improve customer service levels.
Technology is set to drive change for the IPMI market and its participants. The tide of digitalisation is already impacting the wider insurance industry and IPMI cannot afford to be left behind.