It's no secret that demand for PMI has declined in recent years. But as corporate firms regain their confidence, group PMI has much potential following a renewed focus on value for money. Fiona Murphy reports.
Innovation pathways
Certainly, competition remains fierce, but has that translated into new ways of thinking this year to differentiate between insurers? In previous years, insurers have made new developments including healthcare trusts and open referral, to try to change the pathway for PMI claimants.
Earlier on in the year, Bupa introduced a members’ discount system on its PMI policies that on the surface seemed to not be a million miles away from PruHealth’s Vitality programme. Have we seen any other innovations or developments this year?
Laws said: “The product proposition remains the same. Innovation comes through the way claimants are directed and managed through consultants and treatment facilities. The other change is a focus on how insurers create value for people who don’t claim: if I’m using this P11D benefit but I don’t claim. Is there anything in it for me? We’re seeing insurers focusing on value for people whether they claim or not.”
Chase Templeton, however, has been a company on a mission, absorbing group risk and healthcare practices at a fast pace.
Regarding the market as a whole, Holden said: “The biggest change in the past 24 months is that insurers are more results driven. The business is being more run by actuaries and financial directors than sales directors. In terms of innovation, the truth is there has been very little. Insurers are trying to make all the noises, but it’s a mature marketplace, and to try to change the way products are designed, is a big ask.”
Future growth
What could help to grow the market even more? Are there any dynamics at play that could fuel demand?
Wright said: “It’s interesting where it landed in the end. The Competition Commission has now become the Competition and Markets Authority. The context has changed as well over the time period. A lot of the changes the CMA would want to see happen; such as increased provision of data, behaviour between consultants and hospital groups are already starting to come through. The remedies themselves, they are in the stage of writing the legal order to put those in place; they are expected to come to the fore in October.”
For Wright, interactions between hospitals, consultants and insurers have changed for the better. He said: “It always used to be quite combative, and now it’s more collaborative. It has been a bit of a kick to get the parties into the modern world.
While we all have our own agendas and priorities, we should all be working together for the best outcomes for the customer, and the corporate firms and their employees. I think it has had a more positive effect than ever before. We will see employers and employees benefit from value for money, increased matching of the benefits where they see business problems and have more confidence.”
Laws added: “I don’t see any changes that will fundamentally shift the market. Potentially with the Health and Work Service, benefits will be seen as being for all, which could drive some more business into the market.
“We have to wait and see whether strain in the NHS leads to any demand in the consumer market. But as household incomes grow at a rate less than inflation, it is difficult to see medical insurance as a discretionary spend rising in the priorities of households, whether this will grow through cash plans or through a scheme at work, picking up that P11D benefit.”
Still, while there remains a number of unknown factors for the market, confidence in group PMI could be at an all-time high for the first time in five years.
