The shift from the traditional older expat to a younger demographic has led to a change in health insurance products
Population data from EU studies shows the number of over 65s in the EU is set to rise from 15.4% to 22.4% of the total population by 2025.
ACAS the UK’s top employment service notes, “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.”
So while the UK workforce is becoming increasingly older, has the expatriate workforce followed the same trend?
Statistics show the average age of an employee in the UK is 40, while a self-employed person is 47 years old. This is significant as many expats follow the self-employed model working on a freelance or contract basis when abroad.
There are no definitive statistics concerning the average age of expats, however, according to surveys by media titles average readership age is 48-55. One bank has also suggested 38% of expats are aged 55. This apparently older profile could be partly due to the fact 17% of expats describe themselves as retired.
However, some experts believe expat workers haven’t followed the UK model of an ageing workforce and are younger than statistics would lead us to believe.
Steve Nelson, international sales manager of expat medical insurance brokers Medibroker, said, “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.”
How does this impact on health insurance?
For older, or retired expats, international health insurance is a big consideration. In many countries for retired expats who aren’t contributing to the social security system health insurance is compulsory.
For younger, employed expats insurance is likely to be cheaper. International health insurance is priced on age so the lower risk of a younger expat community would be factored into lower premiums.
As a result, the design of the products, certainly in the pricing models, will already be adapting to this. If the expat demographic is getting younger, then health insurance products need to adapt to meet their needs.
Younger expats are more healthy and more likely to shop for basic, cheaper coverage than perhaps those who retire abroad. The most difficult challenge for insurers is to make an affordable products for the expat retiring permanently abroad.
How brokers can help
Insurance brokers can help clients by leading them towards those providers who have stronger track record of cost control which should in turn lead to a slower rate of annual increases in premiums.
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 more 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.”