Strong Dollar, High Premiums?
Posted date : Nov 7, 2017.
Dear Bird Talk:
I was interested in reading your Editor’s Message in the winter issue of CSANews (issue 65). There is no doubt that the Canadian dollar is buying much more than it did in even the recent past. All snowbirds hope that the rates of exchange stay where they are for many years to come.
One rate that hasn’t changed much is your prices for travel insurance. On the assumption that most of your payouts are made on behalf of snowbirds visiting the U.S., this surprises me. The rates have changed by over 40% in the last couple of years, but especially in the last year. But your rates continue to increase. We all know that U.S. hospital and doctor’s rates are higher than ours at home but, I assume, like all good insurance people, that you are able to organize these costs at lower levels than individuals can get themselves. I’d be interested in your comments.
We have received numerous letters and many requests at our U.S. meetings and shows for more information regarding insurance pricing and the future trends of the dollar. I have written an article outlining the challenges which Medipac faces, every year, in our pricing strategies and you will find it later in this issue. Our rates have generally remained consistent over the past few years as the dollar has strengthened, but we provided some very substantial discounts to our best clients. Some of these include:
1: A 5% discount for five claim-free years. This was then increased to a 10% discount for 10 claim-free years. More than 50% of our policyholders received these discounts;
2: An additional 5% premium discount under our Loyalty Credit. Everyone received some benefit from this, except for our brand-new clients;
3: A Special, and additional 5% discount for the entire 2006/07 travel insurance year, AND we extended it for the 2007/08 Early Bird buyers;
4: By loosening the eligibility requirements for our Preferred Class, we were able to save up to 40% for many people who were previously in our Standard Class;
5: We reduced rates for our Underwritten clients across the board. These are our most vulnerable people and we are trying to help maintain their snowbird lifestyle in the face of their mounting health issues;
6: We doubled all of our benefit limits to keep up with the unending medical inflation;
And there is more buried away in the fine-tuning of our medical questionnaire, which becomes a little more lenient and forgiving every year.
These are some of the dollar positives and these items are also, partially, a result of Medipac’s perspective and very aggressive stance with U.S. health-care providers. We brook no nonsense, no fraud and no incompetence and pay fair bills fully and quickly; but it does get tougher every year. And as to the dollar…I think that it will stay strong and eventually go higher, but perhaps not this year.