As part of Health & Protection’s Guide to PMI for new entrants, Health & Protection outlines the overall state of the UK PMI market.
The private medical insurance (PMI) market has seen several years of rapid growth since the Covid pandemic and now stands at a record level of membership for modern times.
Data from the Association of British Insurers (ABI) showed overall membership across individual and group schemes hit 6.5 million in 2024. This was up by 4% from 6.2 million lives being covered in 2023.
Proportionally speaking the individual and retail market has seen the largest increase during this post-pandemic period with several years of growth around 10% each year.
As an immediate example, around 1.7 million were covered by individual PMI policies in 2024, according to the ABI, up approximately 13% from around 1.5m in 2023.
However, the group scheme market remains by far the largest in terms of sheer number of people covered. In all, 4.8 million were covered by workplace schemes in 2024, up about 2% from 4.7 million the year before and a second consecutive record in more than 30 years of data collection.
Reasons for growth
Much of this PMI growth is straightforward to explain.
The Covid pandemic triggered a vast increase in awareness of the importance of healthcare among the national population bringing with it desire for people to ensure they could take care of themselves, their families and their employees.
Combined with that, the mass disruption to NHS services during the pandemic and then subsequent increased demand has led to soaring waiting lists and overly stretched resources.
This has proven to be another major driver for people to explore funding their own treatment.
Furthermore, with primary care and diagnostics among the most in-demand services it means that PMI has become far more of an everyday product for those buying it rather than primarily the isolated major issues which it was previously styled around.
Download the Guide to PMI for new entrants here
Products, services and claims
To meet this new-found demand insurers have been expanding the range of services and care they will fund and increasingly providing these, either themselves or through third parties, to support existing clients and new members.
The pandemic of course was a great driver in uptake of remote healthcare and now services such as remote GPs are now almost essential for health insurers and other providers, particularly as the NHS has seen high-profile struggles for access in this regard.
The digital trend has continued in many other areas of healthcare offerings including physiotherapy and mental health where technology is now being employed not only to connect with professionals face-to-face but also through automated programmes and apps.
In addition, new services are being added at pace to support patients going through a myriad of conditions including cancer, menopause, lifestyle issues and rehabilitation.
As sickness absence numbers have grown employers are increasingly utilising schemes where they are in place, with mental health and musculoskeletal injuries proving particularly prominent and needing to be tackled.
Diagnostics are also proving increasingly key elements of the private healthcare journey for individuals and group scheme members alike, with the ability to quickly understand where a symptom is dangerous or benign valuable for the immediate physical and underlying mental health.
The increasing demand for care from more people and much wider coverage by insurers to meet these needs has triggered a surge in claims over the last few years.
To illustrate this point, ABI data showed claims paid by health insurers rose 13% in 2024 to hit a record £4bn, which was up from a previous record of £3.57bn in 2023.
The total number of people who claimed on either individual or workplace health insurance policies reached 1.8 million in 2024, up 10% from 2023.
These higher costs than the pre-Covid baseline have pushed premium inflation ever upwards over the last few years and the sector is now facing a challenge of ensuring it does not price itself out of the market while still being able to meet the healthcare needs of a modern population.
As a result, many insurers are now turning towards preventative care and seeking to get ahead of ill health by encouraging their members to monitor and improve their health – and giving them the facilities to do so in the next evolution of product design.
Download the Guide to PMI for new entrants here
