Millions of expats around the globe travel home for the holidays. But only a fraction purchase international travel or medical insurance. This is a both a major liability for expats (who could face huge medical bills in an emergency) and a missed opportunity for international insurers.
Adrian Shaw, founder of the insurance aggregator Expat Compare, explains the lack of consumer awareness and what insurers can do to tap the market’s potential.
Adrian, why is it expats are so unwilling to take up short-term insurance policies?
Certainly the biggest challenge is client education. People who travel for Christmas feel they can automatically get back into the healthcare system at home. We have the most experience dealing with British expats. Most don’t realize according to NHS guidelines they lose all benefits once they are residents overseas.
Do you think the cost of these policies could also be a barrier?
Policies can be fairly expensive. What we usually suggest to clients is if they are going to travel for the holidays they take an add-on policy for their medical insurance plan. Most insurers offer these options.
What are the key drivers for costs?
You have medical inflation which goes up once or twice a year. Another important factor is where people are going. More people are traveling home to higher risk destinations now. If an expat is traveling home to Kurdistan, for example, he’s going to face much higher costs for travel insurance than someone going to the UK or Europe.
Are insurers running campaigns to increase awareness of the value of international travel and medical insurance?
I know some, such as William Russell, will offer promotions to add travel insurance on when you purchase medical insurance. Many do deals like this, but I’m not aware of any Christmas-specific campaigns.
The holidays seems like a natural time to target both travelers and expats. Why do insurers hold back?
Given the low awareness in the market, they don’t see it as justifying the advertising expenditure. But of course there remains enormous potential in the market.
What can insurers do to help tap that potential?
Education is key. In terms of Expat Compare, education takes up a significant portion of our resources.
What is your strategy for educating consumers?
For the time being we are relying mostly on static web pages. But we are also still basically in a soft-launch, beta phase of development. In the first quarter of 2012 we will be launching officially and that will be accompanied by further efforts.
Can you give us some details of the upcoming efforts?
I don’t want to give too much away in advance. The main idea is we want to make the client think about what they really need from a policy. Our focus will be to encourage engagement, rather than simply accept whatever plan is put in front of them.
Doesn’t that imply there’s something wrong with the products insurers are offering?
Part of the problem is the perceived complexity of international medical insurance. Most expats don’t need more than basic medical and evacuation cover when traveling. However insurers bring in new benefits to try and distinguish themselves from their competitors. There are just too many bells and whistles.
Once you show expats what they actually need comparing and purchasing policies becomes much easier for them.
Adrian Shaw is Medical Insurance Director at Anglo Arab Insurance Brokers (AAIB) and founder of insurance aggregator Expat Compare.