What Could An Ageing Expat Community Mean For Expatriate Health Insurance Planning?

ACAS, the UK’s top employment relations service, notes that “One of the most significant changes that will impact on the workplace (in the UK) is the ageing of the workforce. The Default Retirement Age has been removed and this, coupled with the announced increases in state pension age, means that the average age of the UK workforce is expected to increase.”

The consensus view amongst many experts, therefore, is that the average age of the UK workforce has increased in recent years with many more people now employed past retirement age. Has the age of expat workers changed in the same way? In the UK, statistics show the average age of an employee is 40, whilst the average age for self-employed individual is 47. This is significant, as many expatriate workers follow the self-employed model working on a contract and freelance basis. Whilst no definitive statistics of the average age of expatriates exist, surveys carried out by media titles suggest an average readership age of around 48–55, with one banks suggesting 38% are aged 55. This apparently older age profile may be due in part to the fact that a large percentage (17%) describe themselves as retired.

Data from one EU study show the over 65 population is anticipated to rise from 15.4% of the EU population to 22.4% by 2025. However, according to Steve Nelson, international sales manager of expat medical insurance brokers Medibroker, who have some 15 years experience of advising both expat workers who are already overseas and those who are intending to leave the UK, “expat workers do not appear to have followed the UK model of an ageing workforce at all, in fact it would seem that quite the opposite seems to be the case. We have seen expat workers average ages are actually falling. Traditionally expats were predominantly looking in the engineering sectors, whereas financial services now attract younger expats.

With much better and cheaper air travel than, say, ten or twenty years ago, we seem to have a younger more mobile expat community around the World now.” It may be that the UK and global economic slowdown is leading to the emergence of a new breed of expat, the ’permanent expat’. It used to be that an expat would go abroad for a few years then maybe return home and perhaps go abroad again on a different contract. But, always returning home in between and then, eventually, return home permanently in retirement. Now the expat community seems to consist of more and more expats who move abroad and stay abroad, eventually retiring permanently away from their home country.

For the retired expatiate, making sure they have suitable international health insurance in place is vital and likely to be costly, but for the younger working expat, the cost of international health insurance is likely to be far lower. This is because the relatively high costs of international medical cover are attributable to high medical costs around the world and not necessarily just to an older community. International health insurance has always been priced on age so the lower risk of a lower aged expat community would already be factored into lower premiums. As a result, the design of the products, certainly in the pricing models, will already be adapting to this.

Do the products need to change further, the answer would simply be yes. Younger expats, who are inferentially more healthy, are perhaps more likely to be looking for a lower cost more basic policy than an older expat who might want or expect an all ‘bells and whistles’ policy. The most difficult challenge is how to make an affordable product for the permanent expat retiring abroad, though. Most international health insurance providers will potentially provide cover for life with little or no age restrictions particularly for existing members.

However, you only have to look at the premium profile for most providers to see that the age/risk as we get older does increase premiums significantly and most will see a sizable increase in premiums around 55-60 years old. Providing affordable cover does become more of a challenge for the older expat. Another area where brokers can add significant value is by leading clients towards those providers who have a stronger track record of cost control which should in turn lead to a slower rate of annual increases in premiums.

In this respect, Medibroker works closely with all the main providers, so often have access to softer internal data on the efficiency of an insurer, something that must eventually impact upon premium levels. For a client, this added level of advice available from a broker is likely to be useful. A broker’s knowledge of how premiums react across age bands can be vital when looking for a good long-term sustainable solution for international private medical insurance. What can seem a reasonable premium one year can change dramatically at renewal once you move into a new higher age band. Knowing which plans and insurers work best for different age profiles is therefore a key benefit of using a broker.

Medibroker CEO Robin Pegg sums up, “In our experience, it is rare for one company to always be the most competitive from cradle to grave, so clients need to be aware that change in circumstances might prompt a change in insurer, e.g. the start of a family. In this way, a good international health insurance broker will be able to ensure that you have access to the most suitable products for your particular needs.”


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