Individual PMI: A testing experiment


With the medical insurance sector in a state of flux, Owain Thomas dons the white coat and protective glasses to scientifically investigate the issues.

The recession and the period since has not been kind to the PMI sector, with many policyholders making difficult decisions about where to spend their increasingly stretched resources.

As a result, business has been falling while people instead decide to put their trust in the NHS.

While the present Health and Social Care Bill is still making its contentious way through Parliament, it is largely a case of wait and see for those wondering what the effect on the NHS will be.

The British Medical Association and other unions representing GPs and nurses have denied the Prime Minister’s claims that they now support the reworked Bill, instead reiterating that it requires further radical change at the very least.

But with a second listening exercise announced, and public and professional reaction still volatile, it appears unlikely its passage will be a smooth one.

The client base is not the only area of the private health insurance market that has been shrinking over this period – perhaps the two are related.

Many brokers have been bemoaning the continued provider consolidation leading to reduced choice in the market.

cpiPaula Aitken, commercial manager at the Private Health Partnership, is one of those concerned at the trend.

“It’s very worrying that we have an increasingly ­concentrated market,” she said.
“We’re basically left with only the big five to choose from and they’re all fighting over the same business. That isn’t good for the industry or brokers at all.

“We want to be able to demonstrate our skills across many companies. When there are increasingly few, it’s a necessity for us to demonstrate our skills in not just one area, like PMI, but in the broad healthcare spectrum,” she added.

When this is put into the context of premiums often rising with medical inflation – which is typically far higher than the current 4.5% CPI for prices as a whole – it further reduces the options open to people.

Hence, Aitken echoed Kerton’s concerns surrounding switching of business as customers look for any way to reduce their costs without losing cover altogether.

“For older people especially, it’s becoming increasingly difficult and many come to me saying ‘I’m not sure I can keep this going, can you help me?’” she continued.

“It is difficult because we don’t have quite the same flexibility in the individual market as an adviser for covering existing conditions, so you’re limited to reducing their level of benefits or increasing their excesses or doing a combination of the two.

“Very few take the option to start their health insurance again because they can’t get cover for those pre-existing conditions that they need to be claiming for.

“We have been able to suggest possibly taking on a cash plan to support an increased health insurance excess – but that isn’t the answer for others.

“It’s a very difficult choice with individual clients and I’m not sure there’s a final answer out there,” she added.


While it may be easy to target the providers in this debate, all good scientific investigations take advantage of the entire range of available evidence.

In this case, it is important to note that a large part of the premium increases being passed on to customers are the ever growing costs of medical treatment.

As Mark Southern, general manager of sales and marketing for private clients at WPA, explained, this is not an easy problem to address from either side of the fence.

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