In this iPMI Global In Focus article, International Health Insurance 2023 report author, Ian Youngman, takes a look at the size of the digital nomad market. According to Youngman, it may not be as big as first thought.
Most digital nomad visas demand health insurance and some specify IPMI. So how big is this new market? One extensively used 2021 figure is 35 million of which 15 million are in the USA-this is unlikely. More recent studies suggest 24 million but there is no evidence how this number is arrived at.
Because they are short term and nomadic, it is difficult to actually count them.
Studies say that 70% are Millennial and Gen Z- this makes sense.
Many of these are solos or couples where the concept of health insurance is not wanted or understood.
So, when digital visas make it compulsory, this makes it a grudge purchase so they may buy something cheap and unsuitable.
Much is talked about as if digital nomads are all the same.
This is far from the case.
No two countries agree a definition, what the conditions are, how long they can stay and whether the visa can be extended.
Over 50 countries have brought in a digital nomad visa and while some have been highly successful, others have made the terms so restrictive that they have attracted few if any nomads,
True digital nomads actually move from country to country.
Most digital nomads move from their home to only one country and then back home or stay in the country.
So, when does a digital monad become an expatriate or foreign resident?
I do not have the answer.
I am dubious of the massive numbers of digital nomads as yet I have seen ZERO official figures from countries on the number of digital monads they have.
If country A has 600 digital monads in January, and 600 next January, are they the same people or have some or all gone to another country or gone back home?
As normal travel has recovered far quicker than expected, the need to attract digital nomads to kick-start the tourism business has gone.
Countries who have succeeded may not give numbers, as they do not want to tempt fortune or tell competitors.
Those who have failed after much hurrah will want to save embarrassment by declaring low numbers.
Digital nomads are not just about tourism as some of the cleverer countries see this as a way of bringing in techies and people who can become entrepreneurs to develop a tech industry where there is no local expertise.
Some insurers avoid digital nomads as they see a 6-month policy as not cost effective.
But the digital nomad may stay on that visa for up to 5 years – and perhaps longer.
The digital nomad may become an expat needing long term IPMI.
And if you have IPMI that suits a digital nomad that policy could also suit a short-term business or private expat, a student or even a HNW individual.
Some digital nomad polices cut prices by reoffering less cover than a normal IPMI policy such a not covering repatriation or treatment back home.
A UK expat recently got hit by a £20,000 NHS bill -as they did not know that new rules mean NHS treatment depend on where people live, not what their citizenship or past tax history is.
They could be a large long-term market, a passing fad, or somewhere between the two.
IPMI insurers and MGAs need to decide on how to or not cover digital nomads based on looking at and discussing this new market.