Compulsory insurance, voluntary top up covers, differences between what you can sell to locals and expatriates, rules on overseas investors, compulsory local partnerships, economic sanctions, and even local politics are all things that insurers and brokers must understand - as are newer factors of controls on insurance and healthcare prices, and recent compulsory health insurance rules for travellers or students.

Competition for business is not just from global groups, as regional groups and strong national insurers also want a slice of the market.

Test your knowledge of the International PMI and international health insurance industry with the 2nd part of the IPMI Industry Knowledge Test.

Do you follow the crowd to the Gulf, or see more potential in Africa, Asia and South America?

1. Who moved from Lausanne to Montreux recently?
2. Which about to be merged US insurer pulled out of China in 2013?
3. Which insurer should never confused with a month?
4. Who owns Astrenska?
5. Who offers major medical expanses in Several Latin American countries?
6. Which Asian country has hospitals accredited by a French body and why?
7. Which island is part of the USA but has different ACA rules from the states?
8. Which country was about to bring in universal healthcare until the due elections?
9. Which are the top 3 countries for expats in China?
10. Name the 3 countries where competition commissions have looked at healthcare and links with health insurance?

RELATED: Take the IPMI 1st test here.

If you struggle to answer all or most of these questions you may need the new IPMI report that answers all of these questions plus many more. 

DOWNLOAD THE IPMI 2016 REPORT MEDIA KIT AND CONTENTS, CLICK HERE.

AXA PPP issued the following statement and notes the Competition and Markets Authority’s provisional decision on remedies in relation to its remittal investigation into the private healthcare market:

We are reassured that the CMA continues to recognise that there is a problem with competition in the Central London market for private medical services.

Evidently the CMA has been provided with new information as regards Cleveland Clinic’s possible market entry, which appears to underpin the CMA’s new provisional decision.

We have not been privy to all of this information and therefore we are not in a position to comment as to whether this will provide a suitable counterweight to HCA’s position in the London market.

We will now study the provisional decision on remedies in detail and continue to work with the CMA on its findings.

According to new research published by Finaccord, the global market for international health insurance for expatriates and students was worth around $12.98 billion in gross written premiums in 2015 of which around $2.78 billion was due to new policies bought in 2015 itself.

Commented David Bowles, Consultant at Finaccord, "The worldwide market for international health insurance is both large and fast-growing. Its value is not far short of that of travel insurance, which Finaccord estimates at around USD 15.8 billion in gross written premiums in 2015, although it constitutes a fairly small segment within the global market for all types of health insurance which is valued at around USD 1.21 trillion in the same year. Nevertheless, its compound annual growth rate of 11.1% between 2011 and 2015 is comfortably ahead of that for health insurance in general which is recorded at around 4.8% over the same period of time."

Overall, there were around 105.1 million expatriates and students worldwide eligible for international health insurance in 2015 defined as those temporarily resident in a country other than their country of origin for a period of between three months and ten years. These are composed of five main potential customer types, namely individual workers (most numerous at 83.3 million), corporate and other transferees (including diplomats and employees of charities and NGOs) and retired individuals, as well as students plus 'others' (defined as non-employed spouses and children of customers in the other four categories).

"By region of origin, these eligible individuals are most commonly from countries in the Asia-Pacific region given that there were a total of around 50 million of them in 2015," continued David Bowles. "Furthermore, as a destination region, countries in the Middle East attract the most such individuals albeit those going there are among the least likely to acquire international health insurance. Rather, insurance take-up rates are highest among eligible consumers heading to destination countries in Australasia, Latin America and North America with the high cost of healthcare in the latter region, especially the US, a particularly important factor in this respect. However, overall, less than 10% of all individuals eligible to buy international health cover actually do so in practice."

Looking ahead to 2019, Finaccord's research suggests that the compound annual growth rate in the value of this market is likely to pick up slightly to 11.7% which means that the market will be worth around USD 20.20 billion by that year in terms of gross written premiums. However, this expansion will be due primarily to rising average policy prices and secondarily to growth in the number of expatriates and students eligible for international health insurance rather than to an increase in the take-up for this type of cover which is expected to advance only modestly.

Concluded David Bowles, "If underwriters and intermediaries of international health cover can find ways to improve the distribution of their products then even a rise in take-up rates that is only slightly higher than that predicted could bring about a substantial increase in the forecast market value by 2019."

RELATED READING: International And Expatriate Healthcare And Insurance 2014

Global passenger traffic results for July showing robust demand growth compared to July 2014 for both domestic and international traffic.

Total revenue passenger kilometers (RPKs) rose 8.2%, which was an improvement on the June year-over-year increase of 5.5%. July capacity (available seat kilometers or ASKs) increased by 6.5%, and load factor rose 1.4 percentage points to 83.6%. Results were given a boost by the timing of Ramadan which fell partly in July this year but took place mostly in July in 2014. The holy month tends to subdue demand for air travel.

“July results were strongly positive but slowing global trade and the wild gyrations of stock exchanges around the globe suggest that we may be in for some turbulence in coming months,” said Tony Tyler, IATA’s Director General and CEO.

International Passenger Markets

July international passenger demand rose 8.6% compared to the same month in 2014, with airlines in all regions recording growth, including Africa for the first time this year. Total capacity climbed 6.5%, pushing load factor up 1.6 percentage points to 83.5%.

Asia-Pacific airlines saw July traffic increase 8.5% compared to the year-ago period. Capacity rose 6.5% and load factor climbed 1.5 percentage points to 80.3%. The strong performance occurred despite notable declines in trade as well as slower than expected growth in China.

European carriers’ demand increased by 6.7%, reflecting economic recovery in the Eurozone, while capacity climbed 4.0% and load factor rose 2.2 percentage points to 87.3%, highest among the regions.

North American airlines’ traffic rose 5.3% compared to July a year ago, which was more than double the 2.6% rise achieved in June year over year. Capacity climbed 3.5% and load factor rose 1.4 percentage points to 86.5%. Expectations for better economic performance are supporting travel demand.

Middle East carriers experienced a 19.8% demand surge in July over the same month in 2014 buoyed by the timing of Ramadan. Capacity rose 17.7% and load factor climbed 1.5 percentage points to 79.6%.

Latin American airlines’ July traffic climbed 8.5% compared to July 2014. Capacity increased by 8.0% and load factor rose 0.4 percentage points to 82.7%. Despite recessionary conditions in Brazil and Argentina trade volumes in the region showed strong improvement during the first half of the year, providing a boost to business-related international travel.

African airlines’ traffic moved into positive territory for the first time this year, rising 4.9% in July over July 2014. However, the result could be owing to volatility in reported volumes, as fundamental economic drivers remain weak. Capacity rose 3.9%, with the result that load factor improved 0.6 percentage points to 70.9%.

Domestic Passenger Markets

Domestic travel demand rose 7.6% in July compared to July 2014. All markets showed growth with the strongest increases occurring in India and China. Domestic capacity climbed 6.5%, and load factor improved 0.8 percentage points to 83.6%.

India’s domestic demand soared 28.1% in July compared to a year ago likely owing to significant increases in service frequencies and improvements in economic growth.

China domestic traffic climbed 10.9% year-over-year. Recent developments in the Chinese economy, including deep declines in the country’s stock exchange, have increased concerns about a further slowdown in the economy.

The Bottom Line

“Following a strong summer the outlook heading into autumn is unsettled to say the least. While passenger demand remains healthy, air cargo growth turned negative in July. The downward movement in stock markets around the globe reflects investors’ growing concerns about slowing trade and economic growth in emerging economies, as well as China’s continued shift towards domestic markets. Aviation’s connectivity creates economic opportunities and contributes to job creation. Governments looking to shore up consumer confidence and encourage spending should be encouraging greater connectivity by removing barriers to growth such as heavy taxes and charges and infrastructure constraints,” said Tyler.

Europe, Asia and the Pacific and the Middle East all recorded 5% growth in international arrivals and the Americas 4%. Limited data available for Africa points to an estimated 6% decrease in the number of international tourists in the region. At the subregional level, the Caribbean and Oceania (both +7%) were the best performers, together with Central and Eastern Europe and Central America (both +6%).

In spite of this overall growth, results by destination are rather mixed. Safety and security remain a global concern while the economic scenario is comparatively more volatile with the recovery of advanced economies contrasting with the slowdown of emerging economies. Tourism demand has also been impacted by lower oil prices and currency fluctuations.

“These results show that, despite increased volatility, tourism continues to consolidate the positive performance it has had over the last five years and to provide development and economic opportunities worldwide”, said UNWTO Secretary-General, Taleb Rifai. “As UNWTO prepares to meet in Medellin, Colombia, for its 21^st General Assembly, this is the appropriate moment to call for a stronger support to tourism as the sector has the potential to deliver on some of the most pressing challenges of our time, namely job creation, economic growth and social inclusion”, he added.

According to the UNWTO forecast issued at the beginning of 2015, international tourist arrivals are expected to increase by 3% to 4% worldwide for the whole year, in line with the long-term forecast of an average growth of 3.8% a year set for the period 2010 to 2020.

Europe, the most visited region in the world, led growth and increased international arrivals by 5%, benefiting from a weaker currency in the euro area. Growth was driven by the recovery in Central and Eastern Europe (+6%), while Western Europe, Northern Europe and Southern Mediterranean Europe (each +5%) all outgrew the worldwide average.

Asia and the Pacific recorded a 5% increase in international arrivals in the first half of 2015, with Oceania (+7%) in the lead. Destinations in North-East Asia and South-East Asia (both +5%) reported rather mixed results, led by Japan (+47% through July) and Thailand (+30% through July). South Asia recorded a comparatively modest 4% increase in arrivals after two years of double-digit growth.

International arrivals in the Americas grew by 4% in the first half of 2015, consolidating last year’s strong results. All four subregions recorded positive growth, although with variations across destinations. The strong US dollar fuelled robust outbound demand from the United States. The Caribbean (+7%) and Central America (+6%) led growth. In North America (+3%), arrival numbers were strong in Canada and Mexico (both +8%), while for the United States indications point to more modest growth. Most destinations in South America (+4%) reported sound results, in spite of Brazil’s outbound travel stalling.

The limited data available for Africa indicates that international tourist numbers were down by 6% with a decline of 10% in arrivals to North Africa and 4% in Sub-Saharan Africa. Alongside the impacts of the terrorist attacks, African destinations have been impacted by the aftermath of the Ebola outbreak in a few West African countries and the slower growth of regional economies depending on the export of oil and other commodities.

International tourist arrivals in the Middle East grew by 5% consolidating the recovery initiated in 2014.

(Data for Africa and Middle East should be taken with caution as it is based on limited available data.)

Source markets show mixed results

In terms of outbound tourism, data for the first quarters of 2015 shows a diverse picture in spending abroad.

Among the emerging markets, China and India both started the year with double-digit growth in the first quarter, while expenditure from the Russian Federation and Brazil reflected the slower economic growth in both markets and the depreciation of the rouble and the real against the US dollar and the euro.

As for the traditional advanced economy source markets, demand from the United States, France, Sweden and Spain remains strong, while it is weaker in Germany, the United Kingdom, Italy and Canada.

Demand for private medical cover moved down in 2014 despite a growing economy with record employment levels. Moreover, according to healthcare intelligence provider future prospects for market growth are also dented with the unwelcome sharp rise in Insurance Premium Tax (IPT) set to knock the sector in November this year.

The latest data published in LaingBuisson’s Health Cover report puts the number of private medical cover policies in the UK (insured and self-insured) at 3.94 million at the start of 2015, down marginally from 3.97 million a year earlier. However, while there has been little change in volumes in the past three years (2012-2014 inclusive), medical cover policy numbers are 9% below a peak of 4.32 million at the start of 2008. Overall penetration of the UK population by private medical cover (people covered) fell to an estimated 10.5% at the start of 2015 compared to 12.3% six years earlier.

Findings confirm there were similar falls of around 14,000 for both company paid policies and individual paid policies during 2014, with falling demand from SME companies (with less than 250 employees) a trend feature in recent years.

There has been a frustrating lack of growth in employer-funded volume demand in the last four years despite reasonable economic growth during this time and 5% growth in full-time employees in the UK to reach record levels. These trends suggest that medical cover penetration has not matched workforce expansion with some large employers, while the cost of private medical cover as a large ticket item may be holding back wider take-up from small and medium sized companies.

LaingBuisson economist Philip Blackburn highlights that long-term growth of corporate medical cover depends on the tangible financial and non-financial pay-offs which private healthcare can deliver to employers as a core part of health and wellbeing spend. Insurers are making progress to quantify these pay-offs, while focus remains on ensuring the costs of medical cover are efficiently and effectively managed for clients. The forthcoming proposed rise in IPT from 6% to 9.5% in November 2015, therefore, delivers a blow for the health cover industry, adding a fixed cost uplift to medical insurance, and potentially further raising the barrier to market growth.

Sadly, the IPT uplift comes after brighter prospects for medical cover growth just a year ago, when claims costs fell sharply by 5% in real terms (taking into account economy inflation (RPI)) in 2013 - the first significant contraction in recent history. Contributing to this fall was effective cost-containment, highlighted by Bupa’s open referral initiative, applied on a large scale since 2012. This sharp drop in claims costs was not repeated in 2014, as medical cover payouts edged down by 0.8% in real terms to be £3.45 billion. While the impact of cost-containment was again evident during the year, there was upward pressure on costs as claims incidence rose across the industry as a whole.

Commenting on the present state of the market, author of the report, Philip Blackburn said, "Private medical cover is currently at a crossroads. A lack of growth in volume demand when the UK economic cycle is at a strong point, suggests there are barriers to a wider market which need to be addressed. While tackling high costs of cover needs to be an ongoing priority for everyone within the private healthcare industry, demonstrating the financial benefit of private healthcare to employers would appear imperative for long-term market prosperity. To this end investment in the value of private healthcare is required from insurers, hospitals and doctors alike. However, while the medical cover market has recently seen some progressive achievements on cost management, a regressive step has now been delivered by the government. Private medical insurance needs a 3.5 percentage point rise in IPT like a hole in the head, and this additional cost is projected to dampen market demand in 2016 and 2017."

But Employers Embrace Low Cost Health Benefits

A different story can be seen from LaingBuisson estimates for health cash plans, which show that employer demand is surging forward, as a low-cost corporate health benefit seems to fit the bill for many companies.

While its penetration remains much lower than private medical cover, the number of employer paid health cash plan contributors increased by 12% in 2014 to reach a high of 833,000 at the start of 2015, following similarly impressive growth a year earlier. The number of company paid cash plan contributors (policies) has more than doubled in the past five years (2010-2014 inclusive), encouraged by an average price which has not increased over the period, and underpinned by a sales drive from intermediaries keen to grow a progressive market. Meanwhile, individual demand for cash plans continued to edge down in 2014, falling by 2.4% to be 1.81 million individual paid contributors at the start of 2015. However, this was the smallest annual fall in seven years, and suggests stable demand from individuals may be approaching.

Munich Re and Allianz are the market-leading groups in a fragmented market that is predicted to be worth EUR 4.54 billion by 2018.

The value of the market for stand-alone travel insurance and assistance across 20 European countries was EUR 3.86 billion in 2014 in terms of gross written premiums and is forecast to rise to EUR 4.54 billion by 2018. The UK market is by far the most valuable as it was worth more than twice as much in 2014 as Germany, the next-largest country.

However, in terms of travel insurance and assistance gross written premiums per capita, Norway can be identified as Europe's most developed market albeit Poland's has displayed the most rapid growth in real terms (i.e. after discounting for inflation). These are key findings from Finaccord's new study titled Travel Insurance and Assistance in Europe which investigates the market for stand-alone travel insurance and assistance in 20 European countries.

"At 29.3% of the total market value in 2014, the UK alone accounted for almost a third of the European market for travel cover", commented David Bowles, Consultant at Finaccord. "Reasons for this include the outright size of the UK population plus the fact that it scores relatively highly in three further areas: the frequency with which its residents travel abroad, the propensity that they show to take out travel insurance, and average policy prices. All but the last of these factors also apply to Germany but the market value there is reduced by the fact that the average price of a travel insurance policy is less than one third of that of the UK. This is because many of the policies bought by German travellers offer much less comprehensive cover."

In terms of the growth of the value of their markets for travel insurance and assistance, Poland, Norway, Romania and Turkey have been growing most rapidly with compound annual growth rates of gross written premiums of 9.0%, 7.2%, 6.6% and 5.4%, respectively, between 2010 and 2014 when expressed in real terms (i.e. after discounting inflation). In contrast, the weakest performances came from the Czech Republic, Italy, Spain and the Netherlands where the value of travel cover fell in real terms in all cases (at respective compound annual rates of decline of 4.5%, 4.3%, 2.0% and 1.8%). Meanwhile, the large UK market edged up at an almost-imperceptible real compound annual rate of growth of just 0.1% over the same time frame.

"The fact that Norway's market is ranked second for growth out of 20 countries is somewhat surprising given that Norwegian travellers already pay a vastly higher price for travel cover than their counterparts elsewhere in Europe", continued David Bowles. "However, the number of policies sold there has also been increasing quite rapidly as a result of increasing outbound travel so the growth in market value cannot be attributed purely to rising prices."

On the basis of its research, Finaccord has also computed approximate market shares of the leading underwriters of stand-alone travel insurance not only in each of the 20 countries reviewed but also across them combined. This combined analysis indicates that Munich Re, mainly via subsidiary ERV (Europäische Reiseversicherung), and Allianz, primarily through assistance arm Allianz Global Assistance, are likely to be the market-leading groups with Europe-wide shares of gross written premiums of between 11% and 15% in the former case, and between 10% and 14% in the latter case. However, the fairly fragmented state of this sector is illustrated by the fact that groups outside of the top 15 (numbering more than 260 in total) may well command between 28% and 38% of the total market value.

• 200,000 more people received life and disability insurance cover arranged by their employers in 2014, adding to the very strong growth of 300,000 new people last year;
• Since 2010, the number of people insured under group risk schemes has grown by almost 1.25 million;
• Good premium growth of 7.9% across all lines; 8.9% increase in in-force death benefit premiums, 6% in long-term disability income premiums, and 7.8% increase in critical illness premiums;
• Excepted group life premiums grew 27.9% and benefits by 29.4%, reflecting the response to changes to the lifetime allowance;
• Number of new schemes grew as more employers set up excepted group life policies and critical illness schemes, but long-term disability income schemes continue to decline.

The excellent growth in the UK group risk insurance market continued in 2014, according to Swiss Re'sGroup Watch 2015. Premiums were higher in all product areas, with an overall growth of close to 8% for the year. Importantly, over 200,000 more people are now benefitting from life and disability insurance products arranged through their employer. The report finds that the market is resilient, but that there are still challenges, most particularly where the number of new to market disability income schemes remains disappointing.

"These are good figures for the group risk market – but they hide the fact that this industry is at a crossroads," says Russell Higginbotham, CEO Swiss Re UK & Ireland. "The welfare state cannot continue to fund at current levels and the next Government will have to make cuts to the welfare budget. Insurers need to be ready to step up and adapt to that new reality. If we don't, we may find existing models under threat in the same way that reforms have reconfigured pension provision."  

Group Watch 2015 reported steady growth across most lines of products. Premium growth was again very strong in the group death benefits sector with GBP 1.25 billion in-force premiums reported for 2014. This strong growth continues the trend from previous years, and is the first time the market recorded annual growth in excessive of GBP 100 million.

As in 2013, excepted group life premiums performed very well, with premiums growing by 27.9%. The move reflects the reduction of the lifetime allowance, which imposes a cap on pension savings of GBP 1.25 million. With the limit set to be reduced further to GBP 1.0 million from April 2016, employers are likely to continue preferring the simplicity this option presents.

The number of people insured for long-term disability income protection through their employers increased by 1.9% for 2014, building on the important milestone of two million people insured which was reached in 2013. In-force premiums were up 6.0% to nearly GBP 634 million. There was a decrease in the number of in-force schemes of 0.4% to 17,119.

Critical illness covers again experienced strong growth. In 2014, almost 475,000 people were covered, an increase of more than 90,000. In-force premiums increased by 7.8% and sums assured by 15.2%. The number of in-force schemes increased by 7.0% to 2,840.

"The results show solid growth once again but we need to decide if we want to carry on as we have done for the past few years or offer something more ambitious," says Ron Wheatcroft, author of the report.  "Auto-enrolment could be the way to increase coverage if we are unable to deliver growth to begin to fill the gap which will be left by declining state provision. Employees tell us that they would value greater workplace access to products and services but, somehow, this hasn't translated to more coverage."

Key figures from Group Watch 2015 (in GBP millions)

Total In-force premiums at end of year

Group Watch 2015 analyses and summarises group risk business results at the end of 2014. It also uses a qualitative survey among 34 insurers and intermediaries in the group risk market, conducted in February 2015.

The Swiss Re Group is a leading wholesale provider of reinsurance, insurance and other insurance-based forms of risk transfer. Dealing direct and working through brokers, its global client base consists of insurance companies, mid-to-large-sized corporations and public sector clients. From standard products to tailor-made coverage across all lines of business, Swiss Re deploys its capital strength, expertise and innovation power to enable the risk-taking upon which enterprise and progress in society depend. Founded in Zurich, Switzerland, in 1863, Swiss Re serves clients through a network of over 60 offices globally and is rated "AA-" by Standard & Poor's, "Aa3" by Moody's and "A+" by A.M. Best. Registered shares in the Swiss Re Group holding company, Swiss Re Ltd, are listed on the SIX Swiss Exchange and trade under the symbol SREN. For more information about Swiss Re Group, please visit: www.swissre.com or follow us on Twitter @SwissRe.

Cigna TTK Health Insurance a joint venture between U.S. based global health service leader, Cigna Corporation (NYSE:CI), and Indian conglomerate TTK Group, today announced the launch of  its second, Lifestyle Protection product- Accident Care.

Accident Care is available to retail customers in three options- Basic, Enhanced and Comprehensive with a sum insured ranging from Rs. 50,000 to Rs. 10 crore.

Speaking on the launch, Sandeep Patel, CEO and Managing Director, Cigna TTK Health Insurance Company Limited said “It is imperative to be prepared for adversity arising due to uncertainties in today’s evolving world. It is our aim to work together with our customers, to understand their unique needs and deliver on those needs.  Lifestyle protection products from Cigna TTK are designed to assure financial support through life’s ups and downs. It’s our endeavor to keep the products simple, convenient and comprehensive. Accident Care is uniquely designed to offer benefits and value for money, to our customers.”

Earlier, Cigna TTK also launched Critical Care, as a part of Lifestyle Protection product suite. This policy is available in two variants – Basic Plan and Enhanced Plan. 15 basic critical illnesses will be covered under basic plan and 30 under the enhanced plan. Cigna TTK – Critical Care offers a sum insurance ranging from 1 Lac to 25 crores. The minimum age to take this policy is 18 and the maximum age is 65 with a lifetime renewal facility. It is topped with a unique facility that allows our customers access to Cigna’s Global Network across 80 Countries and over 10,00,000 network hospitals at network rates to avail treatment for the diagnosed Critical Illness.

Talking about Critical Care, Mr. Patel said, “With growing sedentary lifestyles, changing environmental factors and high stress levels in the country, lifestyle diseases are becoming more and more prevalent.  Critical Care is designed to cater to the growing concerns of lifestyle diseases and the high medical costs associated with them. The product is also designed to complement indemnity medical products.”

“We intend to offer a comprehensive health insurance portfolio to all our customers. Both Accident Care and Critical Care are fixed benefit products which strengthens Cigna TTK’s suite of health insurance products offered in the market.” he added.

All Cigna TTK products offer immediate access to Cigna TTK’s online wellness program- ProActiv Living, to all policy holders, offering customers Health Risk Assessment, Targeted Risk Assessment and Lifestyle Management Programs to improve their lifestyle.

In addition, the policy holder is also entitled for tax benefit under section 80D as per Income Tax act.

Lloyd’s is pleased to announce that Mark Cloutier, CEO of Brit PLC, will be joining the Lloyd’s Franchise Board with effect from 1 April 2015.

Mark has been the Chief Executive Officer of the Brit Group since October 2011 and has more than 35 years’ experience working in the international insurance and reinsurance sector. He currently holds a number of non-executive positions and has held several CEO and senior executive positions, including CEO of the Alea Group, CEO of Overseas Partners Re and President of E.W Blanch Insurance Services Inc.

Chairman John Nelson said, “I am delighted that Mark Cloutier will be joining the Franchise Board. He is one of the outstanding business leaders in the Lloyd's market with broad experience of the insurance and reinsurance industry, both internationally and in Lloyd's itself”.

Mark’s appointment is subject to formal approval from the PRA.