Posted on Dec 27, 2012 by Sergio Ulloa
Globalsurance has worked closely with Nordic Health Care since 2009 and has previously considered the insurer to offer some of the best health insurance plans in the market. However, premium increase rates for 2013 have now been announced and have come in at 15 percent, a figure above Nordics previous average for both new plan and plan renewal premiums.
Over recent years, Nordic's premium rate increases have typically been in line with other insurers but these new rates are above the average of several other leading international insurers including Bupa International, Allianz Worldwide Care and Interglobal.
Nordic Health Care plans are unique in that when a client joins a plan, they will remain in the same age bracket going forward for the policy lifetime so their premiums will not increase due to their age. While this makes for an attractive plan, it does not make premiums immune from steep rate rises. Globalsurance has put these recent increases down to the extremely comprehensive and rich benefits typically offered with a Nordic plan.
"The Nordic Health Care plans are among the best in the market for those looking for comprehensive cover and are particularly attractive to European nationals who like the fact that they are able to stay in the same age bracket going forward so hopefully, premiums do not adjust too much. Unfortunately though, for 2013 there will be a significant step up" commented Globalsurance CEO, Neil Raymond.
Clients should note however, that when the majority of insurers release their premium increases, they exclude the extra increase that typically occurs as a policyholder moves into a new age bracket. As Nordic renewal clients experience no impact on their premiums from age, and that age normally accounts for an average of a 3 percent increase in premiums each year, Nordic's 15 percent increase could in fact, be positioned at 12 percent instead. This is still a high figure in comparison to other insurer rates but it is a more acceptable figure for policyholders to receive.
Another possible factor behind Nordic Health Care's high increase rates could be related to the fact that Nordic has always been very open to providing coverage for clients with pre-existing conditions
(in return for a premium loading). This is a unique offering amongst health insurers and while it has undoubtedly attracted many clients, it has also most likely impacted the loss ratio experience of the entire portfolio.
Nordic Health Care has made several other changes this year, especially in regard to compliance issues. While renewals will continue to be honored for existing policies, new business will no longer take place in Latin America as Nordic has effectively withdrawn from the offshore market. In fact, Nordic has now withdrawn from most of its global markets outside of Europe and while plans are still available in several notable locations such as Thailand, Singapore and Hong Kong, this withdrawal has left Nordic with a significantly diminished worldwide profile.
Mr Raymond commented: "Compliance is of increasing importance as regulators around the world become more aware of high end medical plans sold from overseas to their locally based residence½insurers are finding the need to regularly readjust their position of where they can sell to and where they cannot. Nordic's current position here is by no means unusual".
Nordic Health Care appears to be in the process of finding a suitable balance between distribution and compliance as their distribution list has been adjusted several times recently. This is a relatively normal phase for an insurer and numerous other leading providers go through this phase as they experience growth in such a transient market.
On a final note, starting from next year, Nordic clients outside of the EEA will be levied a 1.1 percent tax on their premium rate. This appears to be specific to Danish tax regulations but could quickly become a standard, especially in Europe, as governments attempt to keep their heads above the water during this financially delicate time.