A breakdown of Financial Conduct Authority (FCA) value measures data on insurance products shows healthcare cash plans to be leading in almost all categories measured by the regulator.
Out of more than 30 types of general insurance product assessed by the FCA, cash plans are at or near the top of the list, performing particularly highly for claims frequency, premiums paid out and complaints.
Health & Protection has analysed the latest data published by the FCA for 2023 and 2022.
Claims frequency
In terms of claims frequency, health cash plans were far more commonly used than any of the other products assessed, with usage of 206.7% in 2023, indicating an average of about two uses per customer. This was slightly up from 202% in 2022.
The next highest rate was pet insurance (covered for life), which had a claims frequency of 42.6% and vehicle breakdown (stand-alone) with 35.1%.
In comparison dental insurance had a rate of 6.5%.
The lowest rate was for personal accident (add-on) with a rate of 0.20%.
Premiums paid out
Healthcare cash plans had by far the highest percentage of premiums paid out in claims, with a total of 71.6% of all premiums received for 2023 paid out in claims.
Again, this was up from 2022 when two-thirds of premiums were paid out. Dental insurance paid out around 42% of premiums in claims.
Second in 2023 was pet insurance (covered for life) with a rate of 65.6% and then gadget insurance including mobile phones (stand alone) at 59.3%.
The lowest on the list was GAP insurance (add-on) with a rate of 10%, followed by excess protection for motor insurance (add-on) at 12.7%.
Claim complaints
Healthcare cash plans also had the lowest rate of claim complaints as a percentage of claims at 0.10% – a position that it shared with after the event legal expenses (all), also at 0.10%.
The highest rate of claim complaints went to payment protection (credit card, store cards and personal loans) (all) with a rate of 15.8%.
Also high was home – buildings only (all) at 14.2% and home – buildings and contents combined (all) at 10.4%.
Claims acceptance rate
For the claims acceptance, cash plans accepted 92.7%.
While high enough to be well within the top 20 products, this was not the highest rate.
The highest was motor (all) with a rate of 99%, followed by GAP insurance (add on) at 98.4%, and gadget (including mobile phone) (stand alone) at 96.5%.
Average claims value
Given the product design it is not surprising that health cash plans had an average payout of £65.82 per claim, the lowest rate listed.
The next lowest payout was dental insurance (all) at £123.45.
But the highest average payout was for home – buildings only (all) at £6,390.87, followed by motorcycle (all) at £5,086.86.
Policies in force and premiums
There was a total of 2,283,831 retail healthcare cash plans in place for 2023 which led to a total of £406.7m in retail premiums, according to the FCA data.
Unsurprisingly given they are legally required, the highest number of policies in force was motor (all) with a total of 33,256,553 policies, generating almost £18.4bn in premiums.