Private medical insurance (PMI) providers believe the market may be approaching the peak of its growth as increasing premiums and the rising cost-of-living may hamper consumer affordability.
The statements were made as part of Health & Protection’s Individual PMI Report 2024 and are the first real indication that insurers believe the market may start to slow.
The individual PMI market has seen three consecutive years of growth above 11% – however, the 11.5% growth in 2023 was slower than both the previous two years which saw 13% and 12.1% in 2022 and 2021 respectively.
Responses from providers about the future for the market were generally positive but their positivity was caveated.
“The market is still strong; however, it is beginning to look like 2023 was the peak year for interest in private health products,” said one provider.
“Demand for medical services is still increasing, but not at the same rate as in 2023.”
The ongoing struggles within the NHS were again seen as the biggest driver of interest but the pressure of costs is starting to show on consumers and insurers.
“We continue to expect market growth due to the ongoing situation with NHS waiting lists,” said another provider.
“We observe some shift in the type of customer entering the market and the type of medical access that they are seeking, for example primary care.
“This may lead to changes in claim patterns or customer demands, requiring changes to pricing and proposition design.
“Through cost-of-living challenges, we may also be seeing a shift to more price-driven market activity at renewal, reducing policy retention rates.”
The full results and market analysis can be found in the Health & Protection Individual PMI Report which is available for all advisers, intermediaries and brokers to download for free from this link or by clicking on the front cover below.
