Pacific Prime has been working closely with DKV Globality since 2009 when the Individual comprehensive health insurance plan became widely available in the market. Last month, the plan underwent a re-branding and was named Globality Health but will still remain a part of Munich Health, the international medical insurance segment of Munich Re.
The Globality Health plan is one of the most comprehensive and best-value-for-money plans currently available in the international health insurance market worldwide. There are three different levels of cover on offer; ‘Classic’, ‘Plus’ and ‘Top’. The highest level, ‘Top’, not only has exceptional inpatient and outpatient coverage but the dental benefit and maternity benefits are among the best in the world available from any leading insurer.
The rates charged for the plan are highly competitive amongst others in the market; this has led to a very rapid take up of the plan by expatriates and high net worth individuals looking for coverage at the top end of the market. This is particularly true for those seeking to start a family where the pregnancy insurance coverage and waiting periods are very much the best and most competitive that can be found.
Mr. Christian Moore, a sales manager from Pacific Prime commented: “The Globality plan is clearly the stand out leader in the market in some segments, it has a trusted brand name and amazing benefits, the biggest challenge we have is on administration and claims handling”.
Mr. Moore went on to explain: “… Globality are always very fair in assessing claims but the process can be very slow, they often contact doctors directly to get supporting information which can slow the process down, we also feel that the success of the plan has overwhelmed their IT and staff recourses”. The approach taken by Globality on claims assessment is certainly usual when compared to other global expat insurers and Globality has always contacted the client’s doctor on the first claim submitted to capture the patient history and thus rule out pre-existing conditions not declared on the application form. This, of course, slows the process down but it is very thorough.
Pacific Prime does see problems in the longer term with the Globality plans, and analysis of benefits and premiums indicates that there may be some material misalignment leading to plan losses when benchmarking against other key competitors. Of course, it is difficult to determine from an outsider perspective, without sitting in the actuaries shoes, who manages the plan but the first signs of this may already have arrived.
Globality adjust their premiums on the 1st of December every year and in 2011, rates moved upwards by approximately 10% which was in line with other insurers. However, the premium adjustment for 2012 will be around 19% for those on coverage ‘Worldwide exUSA’ and a staggering 35% percent for those living inHong Kong,China,Singapore andTaiwan. This new pricing zone for these 4 countries obviously reflects premium market adjustment rather than medical inflation.
Naturally, Pacific Prime clients will be very disappointed by the increase but a benchmark with competitors reveals that; even at these prices the plan remains good value in these countries. The policy structure makes it difficult for Globality to manage the plan, if it is performing poorly, in any other way other than to raise premiums as the benefits are grandfathered in and thus cannot be changed by the insurer, as Pacific Prime understands. This may be good for clients looking to utilize the high level of cover but it will mean that there may be significant premium rate increases in future years, until the plan is fairly priced and sustainable. In anticipation of this, Pacific Prime has been notifying all clients since 2009 that their plan may incur abnormal premium rises from when they initial brought the policy to ensure full discloser.
On the horizon, it also seems that Globality is going to be bringing in a new plan in the spring of 2013 aimed at the expat medical insurance market. The plan is likely to be structured to be more sustainable. Pacific Prime believes that Globality will be an important player in the overseas health insurance sector but that there will be some significant changes in the next 12-24 months.
Mr. Moore stated: “Ultimately, for any plan to be sustainable, it must be good for clients and profitable for insurers. We have seen around the world that Munich Health is looking to grow and we hope they can get the balance right on the Globality plans”.