The Chameleon-principle ® (1)
The Chameleon-principle © was developed by Expat & Co and has been registered as a concept. It is based on 3 modern trends in expatriation:
- Western-Europe has become an important destination (source: ORC Worldwide).
- The different benefit systems are one of the Top 5 reasons that hold back international employee mobility (source: PWC).
Each Western-European country has its own Social Security System and as a consequence relies on their own benefit systems such as health insurance or pensions.
- Companies need to save money.
- Assignments are becoming shorter, most popular duration is 3-5 years (source: ORC Worldwide).
- More and more alternative forms of expatriation appear, such as international commuting and frequent travelling (source: Prof. Collin Knapp – Int’l HRM - South Bank Univ. London). This means that the employer doesn’t pay for moving the whole family abroad, for expensive international schools or compenates for the loss of earnings if the accompanying spouse has to give up their career.
- With the localising method and Local Plus remuneration (mainly in Europe),companies are often electing to abandon the 100% private health insurance policy, becausea large part of it will be duplicating coverage from the local social security. By applying to a Top-Up health insurance the employer can save money again (Source: International Investment Feb. 2004).
- Assignments are becoming shorter, most popular duration is 3-5 years (source: ORC Worldwide).
On the other hand the expat himself prefers the continuity of an international insurance policy. A local policy with every new international assignment means going through all the red tape of finding a new insurer and of course new qualifying periods. This in turn can create a continuity problem (acceptation problem due to age and/or medical history).
Local Insurers and Brokers are often not interested in this clientele, because the clients only stay for a few years, and then move away again. On the other hand International Insurers have a retention problem, because they lose their clients to cheaper local providers.
Therefore expats try to keep their home country social security system for as long as they can (source: ORC Worldwide) along with their own benefit systems.
But with a lot of policies this is simply not possible.
Local Insurers often demand that the Country of Residence equals the Country of Social Security. When this is not the case they refuse cover. This means that the localisation method has many disadvantages for the expat.
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