Sales of individual private medical insurance (PMI) have fallen again, according to new research. ...
Sales of individual private medical insurance (PMI) have fallen again, according to new research.
The latest figures from healthcare analyst Laing & Buisson show that although the number of subscribers to PMI schemes rose by 3.6%, the number of individual subscribers fell by 3.2%, continuing a trend started in 1997.
The report indicates that the penetration of PMI into the upper social groups may have reached a ceiling, which means that the only way to expand is to explore other social groups.
Insurers have tried to target this market with budget plans, high excess policies and hospital networks, but the rising claims experience and the cost of new developments have meant that premiums have increased too fast for many and they have not taken cover or have dropped out of existing schemes.
Despite this, Anne Greenwood, head of business sales at BUPA, said that next year this trend could well be reversed. 'Premium increases seem to be coming more under control and at the moment we are able to maintain single figure premium increases due to the lower usage and cost in treatments,' she said.
The decline of the individual market may also be linked to the relative success of the corporate market which has conversely been experiencing a period of steady expansion. Greenwood said: 'The market for corporate sales has been growing for several years now and because there are a lot of people joining this way it has had a knock-on effect on the individual market. As we reach full employment there are less people who are unable to get group cover.'
The growth in corporate PMI has been largely attributed to the increase in number of new small businesses, and to the fact that insurers are focusing their marketing on this sector and are offering competitive premium rates. A number of people in the industry are now predicting that the development of corporate PMI will continue to exceed that of the individual market.
l For more details on the Laing and Buisson report, turn to the feature on page 34.
