The Exeter has paid more than £1.5m in cash benefit for overnight hospital stays since it increased the level of refund as a result of the coronavirus pandemic.
Steve Bryan, director of distribution and marketing, confirmed the figure in an interview with Health & Protection and also discussed his expectations for private medical insurance (PMI) claims and sales post-lockdown.
And Bryan urged protection advisers to offer support for renters’ needs along with homebuyers, noting they often were forgotten or missed out in the property market boom.
PMI payouts rising
Like many PMI providers, when the pandemic hit and private hospitals were called in to support the NHS, The Exeter sought to compensate its members for not being able to offer a full range of services.
One way it did this was to increase its cash benefit for overnight hospital stays.
“It was very clear some people weren’t able to benefit for PMI because hospitals were being used for other things, so we increased the hospital cash benefit to £500 per night and extended it to 20 nights,” Bryan explained.
“We tried to be pragmatic and take a considered view with it. We have just stopped that enhancement recently because private hospital provision is pretty much back to normal.
“And in the end The Exeter paid out over £1.5m in enhanced cash benefits. While these benefits are a result of Covid, the payments generated are due to overnight hospital stays, whether this is for Covid or any other condition,” he added.
With the NHS takeover of private hospitals largely ended, that will allow these facilities to return to their previous business and the private healthcare pathways to resume and begin to clear out backlogs.
With that in mind insurers could be highly active with a potential surge in claims on the horizon from delayed treatments, along with the possibility of more people seeking cover to avoid vast NHS waiting lists.
“I think we’re expecting a catch-up on claims from our existing clients, I guess some people might have put off less urgent non-life-threatening treatments,” Bryan continued.
“Whether that backlog will prompt a desire for people to have PMI, I’m not sure.”
Bryan noted there has been a steady sales flow with “strong, stable levels of interest” but added: “I think we’ve got a way to go before that progresses and emerges. We haven’t seen that tsunami yet.
“PMI is an insurance of desire rather than necessity or need. Personally I would err on side of caution on increased PMI demand as the economic and social fall out from the pandemic is yet to be seen.”
Underwriting slowly emerging
For those people seeking cover, whether for protection or healthcare, they will need to go through underwriting which saw significant changes across the industry over the last year.
Bryan highlighted that those restrictions are easing and becoming less relevant, noting: “We’ve had to emerge less because we put fewer restrictions on during the pandemic.”
However, he added that some parts of the sector are ready faster than others to resume business almost as usual.
“Underwriting is emerging more slowly than people’s appetites, that’s with the reinsurers as well,” Bryan continued.
“The reinsurers are probably still not what they were [pre-Covid] and they are looking at it on a global basis, so obviously they have that global context.”
Protection for renters
One industry that was certainly not slow to emerge from lockdown was the property market which boomed.
An already busy market was turbocharged by stamp duty relief which resulted in a home buying frenzy through the end of 2020 and into 2021 that drove prices higher and higher.
However, that left a sizeable chunk of the population behind in their ambitions to own their own home and Bryan is worried they may end up unprotected as well.
“Today’s renters are older and likely to have more financial commitments than their predecessors, including having a family to support,” he said.
“Despite this, renters are less likely to have any form of financial protection, including income protection.
“Many conversations about protection happen when someone is buying a house, meaning a huge proportion of the population who continue to rent are not having these vital discussions.”
He noted that the mutual’s research found only 15% of conversations that advisers have had with clients regarding protection in the last year have been with renters.
And he warned this left renters in a financially precarious position should they be unable to work due to serious injury or ill health, with some people likely to struggle to pay rent and everyday costs.
“There are a range of products tailored to cover the needs of those who rent, including for those who change tenancy agreements regularly,” Bryan continued.
“So, as an industry, we must work together to raise awareness of these products and ensure these individuals have the financial safety net they need.
“With the property bubble looking unlikely to burst, advisers must open conversations with renters about their protection requirements and get more people thinking about how they will their maintain their standard of living if they have a fall in income.”
