PMI providers make it their business to know the latest medical advancements, but how can they effectively apply this knowledge to the wider world? Lucy Quinton reports on some growing trends.
Advancements in medical technology have meant that people are now living longer, but, while life expectancy has increased, many are living out their days in a poorer state of health. To adapt to this, the list of conditions covered under a PMI policy must vary in accordance with client demands and medical trends.
Despite the improvements, however, providers are reluctant to downgrade the status of certain conditions from 'acute' to 'chronic'. Instead, they admit they would prefer to keep a close eye on any medical developments that are reported in the media.
Nick Ryan, claims standards manager at Standard Life Healthcare, predicts: "PMI providers will be aware of new treatments and obtain advice from employed and retained doctors, Royal Colleges and other medical sources, including updates from drug manufacturers."
He explains PMI providers are unlikely to add more illnesses to their list of conditions, although he suggests that some illnesses previously considered to be incurable may be categorised as acute if new treatments are discovered.
Categorising conditions
There are a number of medical and lifestyle factors that can influence the way providers categorise conditions, according to Mike Williams, senior consultant at Watson Wyatt.
He says drivers of claims can also come from lifestyle changes, such as injury types or cosmetic treatments.
While the protection industry focuses on medical advancements for the whole spectrum of illnesses, Dr Doug Wright, deputy clinical director at Norwich Union, says PMI providers tend to focus more on cancer.
He says firms are placing more emphasis on cancer cover, so their customers can fully understand what they are insured for.
However, while the rate of PMI claims relating to cancer remains steady, the number of people experiencing musculoskeletal problems has steadily increased. This is in part due to policyholders living a sedentary lifestyle, with many spending a great deal of time sitting in front of a computer at work.
Dr Wright explains: "Musculoskeletal conditions have always been covered, providing the specific condition meets the definition of an 'acute' condition. However, what has changed is the development of new treatments. This trend will continue as medical advancements take place, but such treatments must first be considered safe and their effectiveness proven."
Steve Langan, group sales director at PMI Health Group, agrees: "This trend will continue, as the driving factors behind this are an ageing population with the propensity for musculoskeletal conditions, in addition to lifestyle and medical pressures associated with age, obesity, stress and exercise."
However, while there has been a shift towards treating musculoskeletal conditions, Alistair Sclare, head of healthcare at Groupama, says the market may also start to focus on diet. This is because of the incidence and prevalence of certain diseases related to diet, such as type 2 diabetes. "The next stage could be working with people that don't look after themselves as much as they should do," he adds.
Sclare also says that, at present, the PMI industry tends to focus on preventative methods, which ultimately means that treatments are shorter.
Mike Izzard, managing director at Premier Choice, believes providers should be looking towards product innovation in the PMI sector, such as reasonably priced health insurance that excludes heart and cancer treatment, as the NHS already covers these.
Many providers are ahead of the game compared with the NHS when looking at new advancements. This is because the National Institute of Health and Clinical Excellence can take a long time to approve drugs, and PMI policyholders can gain access to these new treatments before those treated by the NHS.
He explains there are only creeping advances in medicine at the moment, but says that if there is increased publicity around a certain treatment then a provider will look into it further.
Growing awareness
A growing public awareness over health and wellbeing has also meant that the UK population is much healthier than it used to be. "People understand more about their health and wellbeing, and they are now picking up on conditions that would have previously gone unnoticed," Dr Wright says.
He believes stress, anxiety and other psychological conditions will be the next major area for claims, because of a greater awareness of health in the UK.
While the methods of monitoring changes to conditions and treatments differ between providers, Dr Paula Franklin, deputy medical director at Bupa, says it is vital for all firms to regularly undertake reviews, as they do through a method called Horizon Scanning to look at new drugs, in addition to examining requests from doctors and pharmacists and studying medical trials.
When it comes to new illnesses, PMI claims do not necessarily differ depending on whether it is an individual or group policy, although the expectations of policyholders may be very different.
Ryan explains: "An individual may expect their policy to cover all new treatments and drugs, and they may be willing to pay a higher premium to ensure these are included. However, members included in group policies may have the cost of their insurance met by their employers, and they tend to understand that some limitations in cover may be necessary to ensure the scheme remains affordable for their employer."
Franklin also suggests businesses introduce PMI so that if an employee falls ill, they can return to work faster.
Wellness and rehabilitation
With regard to wellness and rehabilitation, Williams says costs must be contained in the individual market in order for PMI to be competitive and affordable. However, he says that this can lead to PMI providers not extending cover and increasing its cost, meaning that areas such as psychiatric care can be excluded.
"Individuals are seeking to balance the risk of needing to claim against the cost of cover. All-encompassing expensive products are becoming niche and, as numbers decline, anti-selection is more of an issue," he adds.
Furthermore, Langan says that while there should be no difference between individual and group cover, employer initiatives are emerging that offer greater protection to their employees.
Consequently, it is no longer a justifiable option for a provider to only consider offering the bare essentials to its clientele, whether the are individuals or groups. However, customers need to keep abreast of what providers are offering to ensure they obtain cover that is affordable and suited to their lifestyle.
Providers should be trying to stay one step ahead when it comes to catering for new trends, as this will ensure they meet market demand. n
