In a move to increase sales of their international medical plans, the health insurance group Aetna are now offering unparalleled discounts for new business. Clients based in Europe are experiencing 25% off of their first year's premiums, while the Middle East and Asia (excluding China) can enjoy a smaller though still significant 15% reduction. Pacific Prime analysts believe this move will certainly help to increase sales, especially in Europe where Aetna's premiums have typically been higher than market average. Aetna and Pacific Prime are very keen to see the effect these discounts will have on increasing new business in the long-run as their clients experience the service and benefit levels expected from a Fortune 100 listed company, though with internationally competitive premiums.
The competition in the market for international private medical insurance is becoming stronger and stronger as many new companies have emerged, launching new products that are designed to be more adaptable to the needs of today's client. Aetna's current product is still the same as the original Goodhealth plan, which Aetna purchased towards the end of the last decade as part of their strategy to increase the health insurance group's presence on the international market. The original Goodhealth plan was launched during the 1990s and enjoyed high levels of attraction and growth during its first stages. These new discounts are expected to be well received in the market since they make the plans considerably more financially attractive. Coupled with their excellent service and depth of experience, these discounts will help Aetna maintain their position as an international market leader.
The Middle East is a good example of Aetna's success, with impressive wide spread visibility and brand recognition in the area. In Asia, the plans are also well established, and they offer excellent outpatient direct billing in many countries. However, the plan is not maintaining the same levels of success in Asia as in the Middle East due to a large number of new cost-effective plans with regional, country specific cover from other insurers.
Europe has always been the toughest market for Aetna, though Pacific Prime product specialists do not attribute this to the plan design. In Europe, the Aetna plans are processed in Euros; and though offering plans in the local currency would not normally be considered a drawback, Aetna's Euro premiums are numerically the same as the US dollar. So, for example, if a plan processed in the Middle East costs $1,000 US, the exact same plan for a client of the same age would cost €1,000 for a client based in Europe. Without the option to change currencies like many of their competitors have, the plans are rendered more than 30% more expensive for clients that need to pay in Euro.
The current plan design of the Aetna policy is very similar to many plans on the IPME Market, with four levels of plans to choose from, typically following this blueprint:
- Level 1: inpatient only coverage
- Level 2: Inpatient and basic outpatient
- Level 3: inpatient and extended outpatient coverage (such as higher chronic condition cover).
- Level 4: inpatient and extended outpatient, with maternity and dental.
Such a plan design does essentially cover a majority of the requirements to suit the market, but it is becoming more and more popular with the new health insurance groups to create plans with more flexibility. Bupa, for example, who first launched their individual "Lifeline" product in the 1970's, more recently launched their new "Worldwide Health Options" (WHO) plan with a far more flexible array of options. The plan is designed to be modular – the client starts with a basic module to cover inpatient treatment and is then given the option to include or exclude any of the following as per their requirement:
- Outpatient consultations
- Outpatient medication
- Wellness and dental benefits
- Evacuation and repatriation
This allows the client to choose a much more personally tailored plan, which is slowly becoming more prevalent on the market. This style of design was also used by Cigna when they launched their international product in the last two years.
Discounts up to 25% on new business are likely to attract more clients onto the plan, especially when being backed up a health insurance group with a name as strong as Aetna. In addition to the immediate spike in sales, Pacific Prime analysts are eager to see how client retention plays out in the long term for this successful international health insurance group. With this increasingly competitive market, Pacific Prime analysts also predict that it's only a matter of time before Aetna unveils a modified plan design for the future.