WPA has launched a new private medical insurance (PMI) plan for individual and retail customers which includes options for a no claims discount (NCD) and excess payments.
The new Complete Health plan is a significant move for the insurer which has previously stuck to its community-pooled risk approach in the retail market.
The shared responsibility and pooled risk options remain but customers also have the possibility to have more personal control over their premiums by choosing an excess and no claims discount.
Core benefits on the new product are largely the same, covering out-patient treatment, in-patient and day-patient hospital treatment, a range of health and wellbeing benefits including a remote GP service, and an NHS cash benefit.
Optional extras include cancer care, out-patient tests and additional consultations, mental health cover, and a list of 18 additional premium hospitals not otherwise included.
It replaces the previous Flexible Health product, which had been available for more than a decade and was closed to new applications at the end of last month, although customers on the plan will be able to continue renewing it.
Customers wishing to transfer from the old product to Complete Health will need to undergo some underwriting, the insurer confirmed.
However, it noted for new applicants underwriting was largely unchanged with fully medically underwritten, moratorium, switch, and continued moratorium options available.
And the maximum age has been removed altogether after being 65 for Flexible Health.
Responding to demand
In an exclusive interview with Health & Protection, WPA sales and marketing director Mark Southern explained why the insurer had taken the step to evolve its approach but added the insurer was still maintaining its underlying philosophy.
“What we’ve done is not throw out the baby with the bathwater. We’ve listened to feedback from people who have come to join us, but perhaps have shied away a little bit because perhaps they’re not used to our methodology,” he said.
Southern continued: “We’d all agree that health insurance has changed quite considerably over the last four or five years.
“We’ve still got shared responsibility and risk pool pricing, but we’ve added more elements to our product to make sure it’s up to date and responds to what people want these days from a health insurance product.
“It also has some elements that intermediaries have been asking us about for years – whereas we didn’t have a no claims discount option, we now have a no claims discount option. And of course that comes with an excess option instead of having shared responsibility.
“We’ve done that, frankly, to respond to demand,” he added.
Comparable product
Southern noted that WPA, like the rest of the market, had seen a surge in demand over the last two years.
With familiarity and availability of no claims discounts and excess across the whole insurance sector, he hoped the new product would bring the insurer to a wider portion of the market, including advisers who may have previously shied away from it or been unable to compare it with others.
“We have a pool of brokers that are comfortable with risk pool pricing and WPA, but we have a lot of brokers that don’t sell our products,” Southern continued.
“They say they love our service, but we did not have a product that’s broadly comparable with our competitors
“It’s very difficult to compare products on a risk pool pricing basis to ones on a no claims discount or an excess and it just makes life more difficult.
“So we have listened to that feedback and said we’ll give you what you want, let’s take down some of those barriers and let’s see where we get to.”
‘We’ve become more competitive’
The product soft launched earlier in the summer and has been available on the insurer’s quoting engine for existing brokers with significant requests for further training and information coming.
After meeting that demand the intention is to roll it out further to more intermediaries.
One key development is opening-up the maximum age limit beyond the previous 65, however WPA expects the average age of new customers to remain in the mid-forties when including children, and that is in large part due to the pricing approach.
“We think we’ve become more competitive for greater areas of the UK,” Southern said.
“We’ve tried to really look at what the market is doing across the UK and ensure we are broadly competitive in the areas we want to be competitive. So we’re hoping to reach a greater land mass in terms of competitiveness.”
And Southern emphasises that does not mean WPA is now looking to be the cheapest provider in the market to simply take more customers.
“We would be mad to bring any product to market that’s not competitive, so we have tried to make sure our premiums are competitive,” he said.
“But we’ve never wanted to be the cheapest provider in the marketplace – we want to charge our customers a fair premium for the services that we provide.
“We want to give the right premium at the right price to make sure it’s sustainable for customers, but also achievable and affordable for the majority.”
Capacity planning
Provider service has been a key issue in the PMI market over the last year and WPA is aware of the importance of the subject, with maintaining its service seen as a vital goal.
As a result, Southern highlighted that the aim is to grow sustainably for the business, as well as its customers.
He acknowledged that when Cigna left the corporate market and WPA took on a lot of group schemes there was need to prepare and that has been factored in with the new product.
“We did some fairly brutal capacity planning to make sure any group that we were taking on board, we could sustain our service,” he said.
“We’ve always made a commitment to our customers that we look after them and we wouldn’t necessarily damage them by looking to grow the business – that’s growing sustainably.
“We can’t see a situation, certainly in the immediate next six months, where we would be growing to the amount that would cause an impact on our service.
“When we’re talking large corporate, we’ve taken on groups of multiple thousands in one hit and that’s when we would do more capacity planning.
“With the retail business we’re much more able to plan in advance what capacity we require and in our local area we’ve got a great reputation and we don’t struggle for recruitment.”
No to guided care
Notably WPA has chosen not to take on guided care, treatment pathways and open referral with the Complete Health product.
These options are becoming increasingly common among health insurance providers and seem to be gaining traction with customers as well.
However Southern has avoided taking this route and has no expectation of doing so soon, if at all.
“We never say never because we might end up going that route, but for years we have had this freedom of choice and the feedback we get is that is important to our current customers and customers that join us,” he said.
“And we really want to be careful to guard that, we don’t want to force people down a route that they don’t want to go to.”