NHS backlogs, extended waiting lists and long queues at A&E – all worsened by the pandemic – are prompting more people than ever to turn to private healthcare.
Whether it has been driven by an immediate or potential future need, there is no doubt that the pandemic has caused a shift in mindset, and that private medical insurance (PMI) is becoming more desirable than ever before, despite rising costs.
We can see evidence of this renewed interest in our own data, which shows a 29% increase in PMI sales since the start of the pandemic between 2020 compared with 2022, and a rise of 92% since 2018.
We have also seen a huge increase in enquiries, with visits to our health insurance webpage increasing by 137% over the past year alone, and by a staggering 2252% since March 2019.
This continuing rise in interest suggests that, rather than being simply a knee jerk response to the pandemic and the huge NHS backlog it has created, this surge could be the start of a wider shift. And, given that NHS waiting lists are only getting longer – and in many areas it is almost impossible to get an appointment with a GP – we expect this growth in consideration to continue.
Booming demand for affordable guided policies
The other catalyst to the shift is there are more options for affordable policies – for example, policies that do not offer a choice of hospital or consultant are much cheaper, but understandably, most people don’t want to give up that freedom to choose.
This is perhaps why we are seeing a huge increase in demand for what is often termed the guided or select option.
With this type of cover, customers don’t choose their hospital, but instead when they make a claim, the insurer offers a choice – usually of between three and five medical facilities and hospitals that suit the patients’ needs best – for a discounted price.
For example, 60-year-old non-smoker, living in Manchester, with £0 excess would pay around £166 per month or just under £2,000 a year for a comprehensive PMI policy with a full choice of hospitals. But if they chose the guided option, the cost would drop by 22% to £129 a month – a saving of £446 a year.
However, the savings with this type of policy vary hugely; age, postcode and if it is a single, joint or family policy, will all have a significant impact, but choosing the guided option could save a client up to 25%.
This type of policy made up just 8% of our PMI policies in 2020, but by 2021, this had risen to 44% and is still rising, suggesting there is an increased and ongoing demand for this type of flexibility with health insurance cover.
There are currently only a handful of providers offering this type of cover, but we will likely see more start to launch their own versions as they realise they need to be more flexible to meet consumer need in the current climate.
Advisers can demonstrate value
Most PMI policies now have included services like virtual GPs and remote screenings for many years.
The shift towards heavier reliance on technology and remote engagement during the pandemic has resulted in a greater demand for consumer-facing physical and mental health apps.
The industry has responded by delivering more value, offering everything from personal data insights to wellbeing guides and healthy eating plans, however, many consumers don’t realise that these kinds of services are bundled into PMI policies.
Therefore, it is those advisers that can demonstrate both the range of flexible and affordable PMI options there are out there – and highlight the digital services that are often bundled into PMI policies – that will be able to best capitalise on this increased demand for PMI.