Not even the recession is stopping the cash plan market from having above-average sales, writes Paul Robertson
If you work in the protection and health financial products arena and have a yearning for a moan, there is no problem picking a target. But even in a tough environment, there is always somebody having a party.
Cash plans seem to be having their day - experiencing a mini boom, even - and you would be hard put to find a downside to moan about.
Put simply, sales are up and there has been a movement in the types of sales that has resulted in a massive increase in the plan's customer base.
BOOM TIME
Howard Hughes, head of employer marketing at Simplyhealth, summed it up: "There is really good growth in the corporate market. We are doing pretty well in the voluntary market and the direct area is tough."
Competitor Health Shield also reported a "dramatic" uplift in business levels over the last year, with a lot of that business coming through intermediaries.
Philip Wood, executive director, sales and marketing at Health Shield, noted that, as with Simplyhealth, the majority of new business was company paid group plans. Last year was a record year for company schemes and for the number of members recruited.
"We have a voluntary sales team as well, but these sales were not as strong as we forecast," he added, but this may also change. "We had the best ever month for new business sales in January. Actually, January has also been stronger on voluntary sales than last year, though whether there is a bit of a tide turning is possibly too early to say," he said.
This observation is backed by Mike Izzard, managing director at advisers Premier Choice Group, and a fan of cash plans who noted that they have become "hugely popular" in flex packages. Perhaps it is down to that old sales mantra that once you get in front of somebody and explain the benefits to them, then people realise cash plans are actually a good product for hard times.
In addition, anecdotally, hard times seem to be shifting the end user's opinion. Stephen Duff, managing director of HSF Health Plan, noted that with companies either freezing salaries or making awards that are a good deal less than inflation, disposable income is shrinking.
"So those with cash plans are looking to get the best value from them as individuals. "This results in people looking at the product much more closely and they are therefore much more discerning, but there is greater usage.
