Expat Insurance Premiums Not To Be Raised

[george]

Premiums for expats look set to escape the tsunami devastation

The appalling loss of life in the Indian Ocean tsunami has astounded all of us, but, surprisingly, the effect on international medical insurance premiums should be modest.

Insurers have said that claims would mostly fall within contingency budgets. Provided no similar catastrophes struck in 2005, the outlook for premiums looked reasonable, they said.

Most westerners who were caught by the tsunami were holidaymakers and covered by travel insurance as opposed to expatriates relying on international private medical insurance. Both forms of insurance would, in most cases, kick in to help repatriation.

Travel policies would meet on-the-spot medical expenses, as would international medical insurance. This would also continue to cover claims post repatriation. But "personal injury" compensation, such as loss of a limb or sight, falls outside most private medical insurance policies. Travel insurance will cover this.

There is also a death benefit under travel cover, although sums are often small (around £3,000). But some financial knock-on in premiums for expatriates is certain. They already face annual rises of around 10pc or more, fuelled by increasing medical costs, rocketing drug prices, greater longevity and the willingness of people to consult doctors for minor complaints.

Stephen Ryan, of insurers Axa PPP healthcare, said: "I think for some in travel insurance – where people have lost their belongings, suffered injuries, been repatriated or had holidays cancelled – there will be a bit of a hit. For private medical insurers there will be some exposure, but not as serious."

Martin Garcia, managing director of insurers Goodhealth, said: "This really was a freak event and, as such, should not affect premiums."

Market leader Bupa International had 11,000 policyholders in the areas of devastation, but the company, which provides both travel and expat medical cover, has so far not been severely hit. "At this stage, there is unlikely to a dramatic effect on premiums going forward," said Paula Covey, the company's marketing director.

She added: "Our assistance company, International SOS, has been flat out. People had either relatively minor injuries, cuts and grazes – or were at the other extreme. Exposure was a factor and, in some cases, diesel fuel in the lungs. The problem is still finding people and identifying them. We have brought two families back to the UK as an emergency evacuation and moved another elsewhere within the area."

The scale of operations by assistance companies – who work on behalf of insurers – over the vast areas affected are bound to have some financial consequence for expat policyholders.

International SOS, the world's biggest assistance company, had more than 1,000 requests for help in the first four days following the Boxing Day tidal waves. It had 70 staff, a third of whom were doctors, giving round-the-clock aid within a few hours, according to a company spokesman.

"We evacuated more than 35 victims from areas affected by the tsunamis. The majority were tourists vacationing in Thailand. The youngest victim was aged seven. There were more than 300 requests to locate insured missing persons."

ISOS teams went to Phuket, Male, the Maldives, Colombo, Sri Lanka and Medan in North Sumatra.

Dr Pascal Rey Herme, ISOS group medical director, said: "We deployed all available resources, including specialists in security, logistics, aviation and medicine to address client needs. For instance, we ensured that staff repatriating mortal remains were culturally sensitive to the practices of the various ethnic groups."

--The Telegraph, UK, 2005-01-18