Cover-More addresses rising overseas medical care costs

Cover-More addresses rising overseas medical care costs | Insurance Business New Zealand

Travel

Cover-More addresses rising overseas medical care costs

“Uninsured travellers can find themselves facing… financial devastation and potential bankruptcy”

Travel

By
Cover-More Marketing

It’s no secret that the travel insurance industry has been grappling with the escalating costs of overseas medical care in recent years, posing challenges for both insurers and travellers.

The increasing cost of overseas medical care raises concerns about the potential financial implications for travellers who experience medical emergencies abroad.

“Uninsured travellers can find themselves with medical bills which can quite frankly, leave them facing financial devastation and potential bankruptcy,” says Eftim Stojanov, general manager of retail underwriting for Australia and New Zealand at Cover-More Travel Insurance (pictured above).

Stojanov has personally witnessed the tangible consequences of the escalating costs and the tireless endeavours undertaken by Cover-More and other travel insurance providers to confront this challenge head-on.

It’s for this reason that the travel insurance industry has recognised the importance of educating travellers about the necessity of adequate protection while overseas, including comprehensive coverage for COVID-19, existing medical conditions, and other unforeseen circumstances. Nations including Vietnam, Nepal, Jamaica, and Laos are also working to raise awareness by making travel insurance a requirement for entry.

Surging border crossings as well as travel insurance sales figures, consumer data, and recent research indicate that travel insurance awareness is growing globally.

While the cost of overseas medical care varies across countries and regions, there are specific areas where expenses are particularly high. Notably, North America and certain Asian countries have been known to charge high prices for medical care, sometimes targeting tourists. Stojanov asserts that in some countries, urgent treatment may also be delayed until payment has been guaranteed. This is particularly tricky for travellers when medical costs are high.

“It’s a privilege to be able to work in an industry responsible for making insured travel possible, but the surge in overseas medical costs has presented significant challenges for companies like Cover-More,” he says.

“Medical claims constitute a substantial portion, accounting for 40% to 50% of the total claims cost at Cover-More. Since 2019, the average claim size has surged by approximately 50%, exerting significant cost pressure on our operations.”

Medical cost increases are the elephant in the room

What can be done to keep people well protected but also keep premiums affordable?

To mitigate the impact of rising medical costs, Cover-More implements a number of measures, the most important of which is cost containment.

“We actively negotiate with overseas healthcare providers to contain the costs. If insurers such as our own accepted these costs for what they were, without question or scrutiny, we might find ourselves in a very different position,” explains Stojanov.

Another measure is to continuously optimise the insurance pricing with higher premium attaching to destinations which pose a higher risk for the portfolio.

Stojanov further adds that “keeping premiums affordable may result in insurers optimising their excess structures and coverage limits. Our medical assistance team also does directional care and re-routing to hospitals where we have preferred providers, if it safe for patient care to do so”.

The rise in medical costs has naturally led to consumer concerns about coverage limits. Determining coverage limits for overseas medical care requires careful assessment. Cover-More, as the largest travel insurance provider in the Australia and New Zealand market, leverages its extensive experience in the travel insurance industry to establish appropriate coverage limits so that it can meet the needs of customers at affordable premium levels.

“We understand that travellers want cover for critical areas such as overseas medical expenses, emergency assistance, and medical evacuation. Therefore, at this point in time, essential benefits like these remain unlimited (with conditions) for most of our travel insurance policies.”

Accessible and affordable insured travel

Insurance premiums, on the other hand, change regularly and these changes are influenced by numerous factors including local and global inflationary pressures, claims performance, emerging risks, catastrophic events, or regulatory changes, for example. Ultimately travel insurance providers want their products to be accessible, so that insured travel is possible. Cover-More offers budget friendly options and comprehensive options too.

“We manage the affordability of our premiums as much as possible. The rising costs in overseas medical expenses does impact premiums. That’s why we work so hard to keep our overseas medical costs manageable,” says Stojanov.

At Cover-More Travel Insurance, staying updated on the latest developments in the cost of overseas medical care is crucial. Cover-More closely monitors the expenses of medical care in different countries through a variety of internal and external reporting sources, as well as through feedback from healthcare providers.

This proactive approach enables Cover-More to adapt coverage and maintain a strong commitment to customer care. It is crucial to educate travellers about the importance of coverage, including having some protection for COVID-19, existing medical conditions, and unexpected situations.

Cover-More Travel Insurance has been part of the New Zealand travel sector since 2007 and is one of the country’s leading providers of travel insurance and medical assistance. Cover-More NZ works with well-known Kiwi brands and also offers travel insurance directly to travellers here. Based in Auckland, Cover-More NZ has the global backing of parent company, Zurich Insurance Group, a global multi-line insurer with 56,000 employees and operations in more than 210 countries and territories.