Pacific Prime has seen increasing signs of global medical insurance inflation falling in the high end sector, often called International Private Medical Insurance (iPMI). Rates of inflation have typically been running year on year at around 11% for the past 5 years. However, in recent months a number of key industry players have recorded inflation rates well below this level and with an annual increase of 8%, AXA PPP is one of them.
A very important insurer in this industry sector, AXA PPP is one of the oldest and largest insurers around today and their experience will definitely be an important barometer of the direction in which global medical insurance inflation is going.
The underlying driver of medical insurance premium increases lies in the cost of claims incurred and as such, the rate of change of premiums is a very good proxy for the change in the cost of treatment.
Pacific Prime’s relationship with AXA PPP has continued to develop, and year on year sales of AXA PPP policies are up almost 300% in the past twelve months with Pacific Prime. An important reason for the increase in the business that Pacific Prime passes to AXA PPP is the management of premiums, and historically the AXA PPP plan could always be considered good value for money, especially when comparing premiums to benefits. The recent announcement of the change in rates then continues to reinforce this perception of a value for money policy.
Mr Neil Raymond, the CEO of Pacific Prime commented, ‘AXA PPP has always been an iPMI provider that seemed to be focused on the UK but was great value for money, they continue to deliver cost effective solutions but now they are more outward looking in our opinion. They historically had a few critical weaknesses with their plans but they have also addressed this problem in the past 12 months’.
AXA PPP has also made some critical changes to its plan over the past twelve months to areas that Pacific Prime always considered to be major weaknesses when benchmarking against competitors. These changes have had a significant impact in Pacific Prime’s overall ranking and opinion of the AXA PPP plan and thus the impact on Pacific Prime’s sales.
For example, the removal of restrictions around chronic condition cover has now taken place. Historically AXA PPP was considered very weak on chronic conditions and the coverage of these types of conditions is perhaps the most important part of any medical policy. Chronic conditions include illnesses such as Diabetes, High Cholesterol and High Blood Pressure and refer to incurable conditions that present symptoms which can only be managed, and not cured. Previously, AXA PPP only covered listed conditions and only for a limited period. In Pacific Prime’s opinion, this made the policy no more useful than a travel policy for an expat living abroad. However, in the past 12 months AXA PPP has removed these limitations and thus now when benchmarking against global competitors, the PPP plan looks to be very good value for money.
Other minor changes to the overall benefits in the past 12 months include a new dental option on AXA PPP’s Comprehensive and Prestige plan, increasing the already built in USD $510 on Comprehensive to USD $1,600, and USD $800 on Prestige to USD $2,400. Furthermore, the Standard plan (Inpatient only) now has an optional Out Patient rider, covering OP up to USD $1,200.
In addition to these changes, Pacific Prime is of the opinion that AXA PPP service standards are improving. The service aspect is hard to qualify but experience from Pacific Prime’s head of operations, Mr Owen Ryan backs this up; “AXA PPP has improved its service standard quite a lot in the past 12 months and we have really noticed this. They are still not near the top when we benchmark on the service metrics but we are encouraged that they are listening, investing and delivering on these issues and so we expect even better results in the future”.
On a final note, AXA PPP announced this week that residents in Greece are to have an extended waiting period on maternity benefits imposed. Previously, the plan had a 12 month waiting period in place on payment of maternity expenses but this has been individually adjusted for Greek residents. Although no reason was given for the change, Pacific Prime suspects this is due to the rate of unemployment in Greece. Mr Raymond commented that “the effect of unemployment on the birth rate (or power cuts) has been documented before and we suspect that AXA PPP are trying to reduce their exposure to this is Greece. Is Spain next?”.
Despite this, AXA PPP seems to be on the right track and has laid down the necessary groundwork to continue to perform positively for the rest of the year, and in future.