Chris Carroll took over as CEO of Bupa Insurance UK at the start of the year, taking over at the helm of the UK’s largest health insurer from Alex Perry who had held the role for 12 years.
In all Carroll has spent most of the last 15 years in senior leadership positions in health insurance or health-related organisations, including almost four and a half years at Bupa Australia with the last three as managing director.
The move from the other side of the world has been a big one in geographical terms but not so much in terms of industry where there are many similarities between the two markets.
However, as is evidenced through this exclusive interview there is more than enough to keep Carroll busy in a rapidly growing private medical insurance (PMI) market but which also faces significant challenges.
We are speaking with Bupa having grown its UK health coverage to more than four million lives, with Carroll confirming that around 1.8 million are under group schemes and another roughly 600,000 individual PMI members – good for more than a third of all lives covered in both markets.
The annual growth of around 5-6% in the group markets and of 11-12% in individual markets for the last three years is one Carroll is keen to build on and he expects will continue.
“Growth is good, scale is good because it just gives us more optionality,” he says.
“Do we think that’s ongoing? The penetration of PMI in the UK is still relatively low, which is why our opportunity both through corporates, SMEs and consumers, and our proposition, innovation and development must meet the market where it is.
“We have a responsibility to help people access healthcare, to help people have the funding that’s appropriate to ultimately deliver a healthier population and I still see plenty of opportunity.
“It requires hard work, but the team is certainly up for it, and with thinking about our stakeholder and partner map, I feel confident we can navigate a way forward, that we can continue the growth because the growth is important not just for Bupa, but for PMI more broadly.”
‘Are price increases sustainable?’
However, alongside that growth has come substantially increased claims and healthcare usage which has pushed premium inflation up to previously unseen heights.
Average premium inflation figures of 10-12% are not uncommon across the market and anecdotal examples of renewal increases as high as 40% or 50% for some group schemes have left many to question the sustainability of the situation and the market as a whole.
Carroll is strongly aware of this issue and agrees that it cannot continue, even suggesting there maybe some hope in the near future.
“Are price increases at the top end sustainable? I don’t think so,” he says.
“The whole sector is hopeful that health inflation comes down, and we’re starting to see some early signs of that.
“So I would be hopeful that we can start getting health inflation down to more manageable rates; I won’t put a number on it, but I think we can get that probably down to more manageable rates than we have had before.
“I’d like to think there’ll start to be some downward pressure on health inflation, which will play through in premium increases and we’ll get to more of a stable, sustainable long-term average over the next 18 months to two years.”
This would be a positive development for corporates, SME and the consumer market, and no doubt somewhat of a relief to advisers supporting their clients with those increases.
And Carroll adds the insurer’s focus on its connected care approach of purchasing or developing ties with healthcare providers in certain segments and conditions aims to have a significant effect on this.
“I’m starting to see that inflation come down because right now those price rises have been a function of this inflation, which just goes back to why we think this connected care and the line of funding through to provision is incredibly important for us, so we can drive more efficiency through the delivery of healthcare and funding of healthcare,” he says.
Going further in provision
This series of acquisitions of, investments in and partnerships with medical service providers is part of the insurer’s long-term strategy to provide more services directly to customers.
The latest of which will see it open 70 mental health centres around the UK, with the first 20 due ot open this year.
Having previously been a major hospital network operator itself before selling all except the flagship Cromwell Hospital, this may appear a reversal of strategy for Bupa of years passed.
Carroll was not around during the £1.44bn sale of hospitals in 2007 but does shed more light on what the insurer is hoping to do with this latest approach.
“I can’t talk to ten years ago, but perhaps we thought about hospitals as a standalone health asset,” he says.
“Now we see it as an integral part of integrated healthcare delivery, therefore when we start thinking differently about that sector, it makes us a whole lot more curious about where we can go further in provision.
“I would argue our strategy makes us think a little bit differently about provision as an opportunity to solve embedded customer pain points when it comes to health delivery.
“There are other models globally that have stitched together provision and funding and we think it’s a pretty logical path to build on our real focus of customer centricity.”
That is borne out in how Carroll is seeing claims coming through and the areas it is targeting.
“We’ve made great inroads in mental health and we’re quite ambitious about how we can continue to help the mental health challenges of our population.
“The thing that often doesn’t get spoken about is dental, we have 400 clinics across the country and about 32% of Bupa dental has a funded Bupa customer.
“We’d like that to grow, we think oral health is very important to body health, so dental is another one we’d like to continue to be ambitious in.”
Genomics and transparency
One particular area the insurer is taking a significant role in is genomics and the personalisation of healthcare through this.
Last year it piloted whole genome sequencing to selected customers in the UK which followed on from launching a genetic test for bladder cancer in 2023.
“Ultimately it will give me a score and my propensity [for certain conditions] and a range of things that I could make changes now so I can actually bend the curve [of propensity],” Carroll explains.
“So that is powerfully insightful and when it comes to customer centricity and healthcare delivery, I think it’s a great manifestation of the genomics world.
“It’s highly fascinating and this goes back to how this sort of patient power is ‘the more I understand about my health, the more I can do about it early’.
However, where genomics and genetic testing are concerned there is considerable attention around data, privacy, control over that knowledge and how it is applied for consumers and insurers.
The subject is a high priority one in the protection market at present and the government is conducting its triennial review of the long-standing genetics agreement within that insurance market through the Association of British Insurers (ABI).
But this is becoming increasingly relevant to the PMI market as well.
Carroll confirms that Bupa has signed up to the ABI code of conduct on genomics and so keeps decisions on pricing and other coverage exclusions out of these results.
But there are areas where it can still be advantageous to insurers.
“We don’t use genomic data to inform our pricing, that’s part of the ABI code of conduct, but when it comes to improving population health and people understanding [their risks] it’s a tool that should be deployed,” Carroll continues.
“We think it is very interesting to get ahead of because ultimately we experience rate in groups and if there’s any data points that can help guide a working population to healthier habits, to give healthier outcomes, that must be good for premiums for groups because it’s experience.
“So we don’t jump between the genomics outcome to informing price, but we think that genomics is just a very powerful tool to help improve the health of populations.”
And in terms of consumer awareness, understanding and data use, Carroll is clear on how that needs to be developed.
“As long as there’s standardisation and transparency, they would be the two tenants that you’d need to progress and go forward,” he continues.
“We’re not quite at that point yet, so I’d be looking at that [protection] industry closely to see how that gets worked through.”
Taking accountability
Throughout the conversation Carroll mentions the importance of the insurer being a market leader and taking responsibility for that position.
While collaboration is important, it seems to be a deliberate stance for Bupa to be taking a leading role on key issues where it thinks it can make an impact.
“I can only control what I can control and if we have a view on a topic that we think we can be better at or help solve, we will walk towards that,” Carroll explains.
“If that makes the industry better we will. We are very interested to work with the industry on topics that help preserve the sustainability of the sector; we still want to work as a collaborative team where appropriate.
“But we’re probably taking a view that we’re not going to walk past issues and that is going to be a feature of our business.
“That’s an accountability we want to make sure that we drive through our business for representing and ultimately caring for our members,” he adds.
Restructuring commission
One of those subjects could be the structure of commission payments to advisers becoming flattened over several years instead of being heavily weighted upfront.
This follows concerns raised among some intermediaries and insurers through Health & Protection’s Individual PMI Report that the current alignment of commission could be encouraging unwarranted switching.
Carroll understands the sensitivity of the subject but is open to considering “anything that improves the sector”.
“We would be interested to talk about and work through whether that’s the solution and why it was rejected historically,” he says.
“That would be interesting to me. Are we interested in building the sustainability of the sector? Absolutely we are, by whatever means and that which includes our broker partners.”
He recognises it would be a big shift using a flatter structure but believes the issue is formed of two different topics.
“One is whether the end state makes sense?” he says, “but [the other is] being challenged by the transition.
“If that was the issue then you’d probably talk about how we’d graduate it.
“That’s super interesting because we do have to keep eyes on sustainability and the role the different cost inputs play through in premiums.
“So all parts of the system need to continue to strive for improvements in productivity.”
Obligation to ensure understanding
And directly on the issue of moratorium policies being incorrectly sold or explained to customers he believes insurers should take responsibility for some of that.
Notably, this could include more dynamic product development and to accommodate things like pre-existing conditions which have not typically been included before.
“We have an obligation to make sure that when we’re talking to our customers at every opportunity to reinforce there is a clear understanding of the product they have,” he says.
“That is a baseline we need to be able to do and we have a range of programmes and processes in place and controls to ensure that with technology and coaching and all those things that we do.
“We have a responsibility as well to ensure that when we’re thinking about our product development pipeline, that we tackle things that have been traditional exclusions, things like chronic health.
“The settings that we had before don’t necessarily have to be the settings on the way forward, so therefore we remain really quite interested in the product sets we’re taking to market that they do reflect customer expectation and they do reflect the changing patterns of health consumption.
“So product development needs to and will become a whole lot more dynamic than it has been to address things like that.”
Tackling rising complaints
Another issue the sector has seen more of partly because more people are coming through the doors is more complaints.
Perhaps more worryingly, in the first half of the 2024-25 financial year the industry was the second most complained about per 1,000 members according to data from the Financial Conduct Authority (FCA).
Encouragingly this number eased in the second half of the year, but it remains a critical issue for the sector to address, particularly given the sensitivity of healthcare and the situation of people relying on the industry as the NHS struggles with long waiting lists.
“We have a responsibility to ensure that we’ve got the right appropriate monitoring on customer outcomes and complaints in my mind is terrific feedback,” Carroll says.
“It’s free feedback where ultimately someone’s been able to tell us in part why they think the product has come up short.
“So beyond just taking complaints and solving complaints, the broader complaint system of work is a very valuable tool to ensure that we are delivering on outcomes, providing value.
“Where we can solve customer complaints, we like to do that as quickly as possible with a special focus on vulnerable customers, making sure that we can identify vulnerable customers and act appropriately with them.
“So there’s customer complaints, but we also need to make sure that our systems and processes support the early detection, remediation and rectification of issues with vulnerable customers,” he adds.
Doctor relations
A further feature of the last year in the sector has been a renewed push by doctors and medical practitioners to alter how they work with insurers.
Fee levels typically grab the greatest attention but there have been wider questions around the terms and conditions practitioners and insurers work with.
Moves were made last year with Bupa among the insurers to increase and revise rates offered for some procedures, although these have not been universally welcomed.
Carroll is yet to speak with the Independent Doctors Federation (IDF) which has led much of the activity, but notes the insurer is always looking to make sure it has appropriate funding in place.
“Now, there is a natural tension that sometimes sits in that and what we all really want to make sure is there’s shared value,” he says.
“Ultimately, as a traditional health insurer, our job is to procure health services on behalf of our members, and our members expect us to procure it appropriately.
“That said, the system also needs to ensure that no-one is left behind and no-one is disadvantaged. We’ve just got to make sure we’ve got appropriate funding vehicles in place across all lines and we’ll continue to look at it.”
On the subject of anaesthetists threatening to stop working with the insurer, Carroll says that was addressed before his arrival, but adds there is now an ongoing conversation with medical practitioners, not just anaesthetists.
“We’ve always got to make sure that the investments are in the right places, in the right lines and we do that on a case-by-case basis,” he adds.
‘Haven’t come to babysit a business’
Carroll has only been at the helm for a few months but having gotten familiar with the business, the market and its customers in terms of advisers and clients, there is a strategic path to follow.
It seems clear this will involve further tie-ins or investments in providers but digital development and market engagement will also prove critical.
“There are going to be a range of health pathways, existing and emerging, we think we can play a disproportionate role in helping to support,” he continues.
“I would like to be able to work with all health insurers to grow the penetration, so I’d like to be here as we grow the amount of people who take on PMI and I’d like to make sure that when I do leave that the stitching between funding and provision is as seamless as possible.
“I’d also like to have more of our customers digitally interact with us. We’ve had a massive spike and of the just over four million lives we’ve got about 2.1 million digitally registered – I’d like to be able to grow that without leaving anyone behind where our digital services aren’t appropriate.”
Ultimately, Carrol believes this will be an exciting and dynamic sector over the coming years and he wants to make his mark on that.
“I haven’t come here to babysit a business, I’m pretty keen to make really big strides in fulfilling our potential because I think we have got a significant potential and we’ve got to make sure we fulfil that,” he concludes.
