Westfield Health's Paul Shires talks to Paul Robertson and makes the case for more adviser engagement with the health products market.
The product aims for simplicity, and Westfield – particularly Shires – are very careful not to call it budget PMI, insisting that the product is a new category, one that the company is keen to see others join.
Of course, the market this product and traditional cash plans are aimed at is changing, while systems and platforms are becoming ever more common, especially as auto-enrolment moves forward.
Will this end of the health products market fit well with the likes of flex schemes, especially as the only really booming part of the cash plan market has been the employer paid sector?
Shires says: “Predominantly, we see hospital treatment insurance, with cash plans alongside them, as corporate‑paid solutions, but not exclusively. We will offer them on a flexible benefits platform as well.
“But what we are aiming with the companies and intermediaries is the big message is to start having conversations about the wider population and the uninsured population – that is where health cash plans and certainly hospital treatment insurance fit in very nicely.
“So we just want intermediaries to ask that question about the wider population of employees. That works equally well on a company-paid basis and on a flex basis.”
Attracting custom
Indeed, Westfield cite the reason that it has been able to keep premiums at a fixed, non-age-related level, without excesses, is because it sells to an uninsured population on a virgin underwritten basis.
Looking forward, the vast majority of IFAs Westfield would hope to be doing business with will have their hands full with the small-to-mid-sized enterprise (SME) market as a result of auto-enrolment.
Shires is unfazed: “Again, similar response. I have seen the full range of small, sole trader-type advisers who are working with business owners with five or more employees all the way up to the fee-based benefit consultants.
“We had a case recently where, following auto‑enrolment, the HR department and senior management decided on a full review of employee benefits across the board. They looked first at PMI because that is a more established product, and soon realised they could not afford it for the entire population.
“But when they were made aware of a health cash plan and hospital treatment insurance, it was affordable for the masses and it really fitted the bill for what that company was looking for.
“Having said that, it is equally important at the other end – the smaller firm who is advising smaller companies – because it does not matter whether it is a big company or a small company. Employees throughout that company, from top to bottom, are hugely important and it is very important for any business owner and decision maker, to get people throughout the business, keep them well and get them back into work.”
So this would be the absence management angle; does Shires recommend this element as a sales point for the cash plan market? Perhaps inevitably, he is keen.
“It goes without saying that health insurance in any guise is a great employee benefit and creates great levels of engagement and improves the psychological contract between employer and employee.
“But we believe absolutely that there is a great return on investment from investing in our products. We have got the prevention in there, the early diagnostics and now the surgical treatment, and we can get people back to work quicker.”
Market integration
While this is all very well, and it is a fair point Shires makes about the lack of cash plan and hospital health insurance engagement within the IFA community, what
are the targets in terms of greater adviser integration into this market? How much more new business is Westfield hoping for?
“We would perhaps flick the statistic I gave you earlier of 80% of our business coming from 20% of the intermediaries we work with,” says Shires.
“We would like 80% of those intermediaries we work with to be promoting actively and being successful in winning business. Again, the key message for all intermediaries is we are not looking to cannibalise any existing markets or private medical insurance. We see that as still staying for the current insured population.
“We just want that extra conversation with the wider employee population.”
Shires definitely has a point, as this is of course a virgin market for customers too: about 10% of the population have some form of private medical insurance or health cash plan. What about the other 90%?
