Leader Talks: AXA’s regional CEO Jan Cupa on healthy competition in the Czech insurance market

The health and travel insurance market for foreigners in Czechia has undergone major turbulence in recent years. A monopoly on health insurance for foreigners introduced by the previous Czech government was subsequently struck down by the incumbent regime, in a move welcomed by the insurance industry as a whole.

Demand for travel insurance is spiking in the aftermath of the Covid pandemic, while changes in attitudes to travel are impacting the types of insurance which travelers are looking for. Expats.cz sat down with Jan Cupa, CEO Central and Eastern Europe at AXA Partners, to find out more about the changes shaping the industry.  

Why did de-monopolization of the insurance system for foreigners take place and what difference has it made?

The previous Czech government voted for a monopoly, arguing that hospitals had incurred a lot of debt due to the treatment of foreigners. In practice, the monopoly showed that this was the wrong argument, so the current government canceled it.

It was a monopoly just like in every economics textbook. It caused a deterioration in treatment of distributors and a heavy price increase, with the average price of insurance doubling. The quality of services remained the same; the period of the monopoly was short enough that this was not impacted too much.

Now, we see healthy competition returning. Prices are coming down, the accessibility and variety of products has increased, and Czechia is more in line with other EU markets.

This democratization of the market has led to an increase in customers’ protection. The limit for medical care is now €400,000, higher than is legally required by the Schengen Area. An additional measure will be a register of foreign insured persons, which will calm any nerves from hospitals regarding debt from treating foreigners, as they will be able to easily access information about their insurance coverage.

How does AXA’s travel insurance go above and beyond the Schengen Area’s minimum requirements, and what are your plans for the Czech market?

AXA is very focused on health. We are now developing a product which will go above the legal minimums; it will strengthen the limits of insurance coverage while strengthening medical services and the overall scope of coverage. We will fine-tune this product with digital solutions and services, such as Telemedicine options and e-receipts to improve the comfort of customers.

There is great variety among the people coming to Czechia and the Schengen Zone. Some are coming for manual jobs, while white-collar workers expect different kinds of protection; for them, products with the legal minimum are not enough.

Behind every insurance product, you have various procedures that need to be set up. Step-by-step, we are now renewing our presence on the Czech market following the end of the monopoly.

What are the main trends shaping the travel insurance industry today?

Digital transformation has led to a strong tendency away from calling by phone. Today, our “call centers” are omnichannel. People prefer to chat through messages, or to solve issues themselves through our self-service portal.

On the other hand, we all have mobile phones, and that’s where a lot of processes happen. This requires instant mobile access; we use not only calls, but also chats and web portals, and we’re also testing potential AI solutions here too.

People value a strong brand. AXA is known and respected around the world, not only among customers, but also among providers. Especially in Czechia, people increasingly travel to exotic destinations. During the winter, the exotic trips season is becoming stronger than the ski season; people are visiting places such as Thailand, Bali, the Middle East and Gulf States, as well as Africa and Latin America. AXA is known in all these locations.

Although travel is becoming more expensive, we have now exceeded pre-Covid travel levels by far. We achieved pre-Covid levels in the summer of 2021, and we now see year-on-year growth of roughly 20 percent, as was predicted.

Did the pandemic change the way in which people think about the need for travel insurance?

First, travelers today really study the content of the product and their coverage. This was not the case before the pandemic. During the pandemic, they got used to checking for Covid coverage, and now they tend to study their policy in more detail.

Second, they are willing to buy more expensive products with the coverage they are looking for. Previously, our mid-range product level accounted for 50 percent of sales and our high-range product accounted for around 25 percent. Today, the mid-range product is still 50 percent, but the high-range product accounts for around one-third.

Third, there’s the Telemedicine scene, in which medical services are provided through digital means. Before Covid, this was seen as something very modern and new. Today, it’s standard.

Do travelers use such digital medical consultations responsibly?

People want to pay for this product, and they use it. Central European travelers with limited language capabilities, for example, may find themselves needing a doctor’s consultation while in an exotic destination. Through such solutions, they can talk with a Czech-speaking doctor, which is reassuring for them.

Such solutions are popular everywhere, but Czechia and Poland are particularly keen on them. In Czechia, the accessibility of in-country care is good, but many people prefer the comfort of a video call with a doctor, especially while abroad.

Do you think digital solutions, especially Artificial Intelligence, could cause trust issues among customers?

I think AI will have the same destiny as the Telemedicine scene. Step by step, it will enter everyday life and become standard. As of today, we’re not there yet. We are testing areas of use in which personal data is not touched. This is the first and simplest stage of AI development. There are other areas with sensitive personal data, such as medical data, which must be well-protected, and this is our top priority.

On the other hand, we see observable improvements in AI two or three times a year. Six months ago, we thought it wasn’t clever enough when explaining the terms and conditions of a product; the success ratio was about 70 percent, which is not enough. With every release, it improves, and I believe that within a year, AI could reach a 95 percent success rate.

What advice would you give to expats coming to Czechia amid the country’s newly liberalized insurance market?

When it comes to health insurance, your provider’s network is critical. Select a company with a strong network, particularly when you plan to be based in a smaller town. In major cities, the network is covered by all insurers, but in smaller localities, find out which insurers can provide a local network.

It’s also vital to look at the specific assistance services provided by your insurer. AXA has an in-house assistance service. It’s part of our DNA to have strong assistance behind all our products.