Demand for private medical insurance (PMI) is high through virgin business and switching customers and aided by lower cost products despite the cost of living crisis, according to advisers.
Challenges remain on the horizon however, and while there have been massive advances in digital healthcare, the technology behind client data transfers still needs addressing.
But encouragingly the pandemic has meant insurers are taking a more human approach towards underwriting individual PMI cover.
Insurers working harder to be more human
“While underwriting methodologies haven’t changed much if at all over the past year, we have found insurers working hard to be more human in their approach,” Isaac Feiner, owner of Lifepoint Healthcare tells Health & Protection.
“The old adage that markets are conversations rings true when a broker is able to have sensible conversations with underwriters to try to ensure the best client outcomes.
“Often, it’s in the nuances and details that allow unique decisions to be made. Ultimately, we want to help the clients and it is pleasing to see how human things can be,” he adds.
Although Claire Ginnelly, vice-chairwoman of the Association of Medical Insurers and Intermediaries (AMII), tells Health & Protection she does not sense there has been any real shift in underwriting from the providers.
“The delays at GP surgeries will present some challenges if a client decides to be fully medically underwritten and there is a need to get more information from the GP, but this is not a common scenario,” Ginnelly says.
“Moratorium provides an easier joining journey for the policyholder but it is most important it is fully explained to the client and the adviser believes it suits their needs.
“There is a lot of switch business in the market for policyholders wanting to move insurers but not be re-underwritten.”
Demand for digital
From the insurer point of view, the healthcare landscape has been evolving faster than ever before over the last few years, with digital services being primary among this.
“The pandemic has been a catalyst for the adoption of digital healthcare services, and we have also seen a big shift in how people want to receive care,” Vitality tells Health & Protection.
“It’s important to keep pace with this changing environment and take full advantage of digital technology in transforming pathways and services.”
A key part of this innovation has been in virtual GP services, with Vitality noting that since 2019 the number of consultations being completed through its app have increased 38%.
In addition to the rise in the use of its virtual GP service, it has also seen a use of its other primary care services significant increase, such as talking therapies and physiotherapy, with primary care now accounting for more than 40% of all claims.
This shift to primary care was echoed by Bupa Insurance CEO Alex Perry.
Speaking at the LaingBuisson Private Acute Healthcare conference, Perry emphasised that it was easy to understate how big the shifts in the sector and in propositions as a result of the Covid pandemic had been.
“Our offer has gone from being focused very heavily on secondary and tertiary care to expand much more into primary care and virtual care,” he said.
Switching customers and cost of living
But increased use of technology is not without its challenges and Lifepoint’s Feiner highlights a key issue the industry is wrestling with is a better approach to data transfer protocols where a consumer switches from one provider to another.
“Unlike the SME data transfer protocols which are widely accepted and in place and have eased the underwriting and data transfer issues, this still needs to be focused on,” Feiner says.
“There are data protection considerations which seem to have impeded this step but it’s certainly an area that requires further attention as a priority. Anything that can reduce friction when transacting business and helping clients is a good thing.”
The cost of living crisis also presents a challenge, but guided care type plans are becoming more popular as a cost-effective option, according to Ginnelly.
“They offer a cost-effective option for the client as they can give significant discounts,” Ginnelly explains.
“Also, benefits are not reduced just the choice of where you go and who you see. I think these will continue to become more popular.
“The interest in PMI is very high due to health and wellbeing now being at the forefront of people’s minds but also the huge backlogs the NHS is now dealing with. Insurers will want to make sure they are attracting new clients by having good cost-effective options.”
Uptick in virgin enquiries
But even against the challenge of the cost of living crisis, Feiner revealed his firm has continued to see an uptick in virgin business enquiries and an uptick in business overall.
“Even for the fully comprehensive plans, even in a period of inflation and higher costs there are people who value these products, and this emotion and need is real,” he added.
“We have seen few lapses although we do not know how the coming winter with the energy crisis and inflation costs will force people to rethink their budgets and priorities in relation to their insurance.”