Cigna has recently released a detailed study on expatriate trends for global employers with the National Foreign Trade Council. Cigna Global Benefits surveyed employees on how they felt about the benefits offered by expat employees – such as housing, income, taxation, education and of course insurance. This is very valuable for global mobility managers because Cigna set up anonymous feedback from the employees for candid feedback from over 100 countries. We wanted to summarize the findings from an expat insurance specialist perspective and provide our insights and opinions for our expat clients and prospective clients around the world.
Global Mobility Changes
Global mobility has been changing over the past 10 years, including how female expats are being supported by expat employers. Many female expats are not feeling well served by their employers. Cigna also noted how the internet has really changed the communication between expats and employers over the past decade. What’s remained consistent is that the number of US expatriates is going down, probably because American expats are considered expensive employees. They are definitely more expensive to insure as they require global coverage including the United States.
Also, more and more expats being sent abroad to developing and third world destinations and less to well developed markets such as Europe. Asia and Africa are key destinations for expats in 2017. This creates more complexity for expat employers when sending people to third world locations such as Lagos or Cambodia.
What do Expat Value?
In the study, expats noted that before they took on an expat assignment, what they valued the most was:
- Relocation Services
- Settlement Services
- Medical preparedness
When expatriates were going to a location, expats found that overall assignment preparedness was crucial, especially since the cost of a failed assignment can be up to 4 times their salary.
Expat Communication is Critical
The study also found that expat employees had some insights on communications. Many expats felt that employers did not communicate often enough with them before going overseas. Obviously income was a key part of communications, but also moving arrangements and medical benefits when living abroad. Expats wanted to know more about how to live in new location, restaurants, exercise, safety and of course where they can obtain medical assistance. Providing a list of hospitals that the expat medical plan has a direct relationship is something our firm sees as an easy communication to provide as top flight medical providers such as Cigna have this all online for free.
Added Value for Expats is Important
Another suggestion that we find helpful for expats is cross culture training, language courses and even tax assistance. Our firm has many contacts with providers in all these areas. In fact, we work with some excellent expat tax specialists who can assist your expat population. Mentoring from other expats in the new country location is really important for many expatriates. As an expat employer, you want to make your employees as comfortable and settled in their new location so they can hit the road running.
The study also found several items related to medical care that are quite interesting. This includes
- Over 70% of expat employees use medical care while living abroad regardless of age
- More expats are becoming comfortable getting medical care locally if its of a high quality and available.
- Emergency evacuation is still an important concern
- Having a large medical network and not having to pay out of pocket is quite important for expatriates. In our dealings with expat and their employers, we find this to be the number one concern of expatriates.
- Expats in North America reported more access to mental illness services
The above observations and trends are often experienced by our expat group clients. The study did not talk about other insurance benefits that are critical for expat employees and employers – such as global life and accident coverage, dental, employee assistance and long term disability insurance. More often than not employers only address the medical insurance component with these other vital services as an after thought. We also find that medical coverage for their partners and children is also a critical concern for most expats, so this should be a factor for employers. Some firms will only provide coverage for the employees and leave the employee to obtain more expensive coverage for his or her dependents, which we feel is an ineffective expat employment strategy.
Our firm believes that if you want to have a higher chance of a successful expat assignment, you need to have a comprehensive and effective global benefit platform that is sourced by an independent expat specialist firm. Claims issues and complaints from expat employees half way around the world can quickly bog down an HR department and lead to failed assignments.
Balancing Expat Assignment Costs
Expatriates realize that their HR Managers are very concerned about the costs associated with expat assignments, perhaps 3 or 4 times the annual salary when all benefits are worked in, but companies also have to have a benefit plan and compensation package that will both attract and retain valuable global expat talent. We find that global medical premiums often rise approximately 9 to 15% per year assuming normal claiming patterns to keep up with health inflation trends. At renewal the insurers will often present higher deductible and coinsurance options, but these are very difficult to implement in the expat sector as these employees expect global medical plans that are attractive, easy to use and at little or no cost to their pocket books.
Another concern for expats is repatriation, which generally means moving expats back to their home country, next opportunity or another expat country assignment. Most employers have little or no repatriation program for their employees. Reverse culture shock can even be an issue for many employees coming home from countries with radically different cultures.
If your company has expatriates located abroad and would like a second opinion on your global benefit plan, it pays to work with an expatriate insurance specialist firm such as Expat Financial, which is a division of TFG Global Insurance Solutions Ltd.. Contact us today to discuss your expatriate insurance program, provide a detailed analysis and obtain quotes from the market.
The Cigna study can be found Cigna global expat trends study.
TFG Global is a valued broker for both individual and group plans from Cigna and our contacts at the company are both extensive and high level. We have worked with Cigna for many years and know their capabilities and plans inside out. For more information on the corporate Cigna plan we offer expats, click HERE. We also offer their individual global health plan.
You can listen to the interview at:
Or listen below: