Perfect time for healthcare reform - Simplyhealth

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Simplyhealth believes the NHS is crumbling and now is the best chance to change the structure of the country's healthcare system in the last 50 years.

It also said it is expecting to undertake more mergers in the future and that trading in the market will remain difficult for the next five years.

The provider noted it was in excellent financial health with a capitalisation of £250m and that it was not planning on entering the international market any time soon.

Des Benjamin, chief executive of Simplyhealth, told the Association of Medical Insurance Intermediaries (Amii) conference that he was proud of the private medical insurance (PMI) sector's good reputation compared to the rest of financial services.

And he thanked brokers for their recent support but defended the need for a direct sales arm.

"It's no coincidence that the NHS is crumbling at the same time the PMI sector is also under its most extreme pressure points," he said.

"Hospital groups are highly leveraged with vacancy rates that are too high, insurers are making no margin on products and are quite uncertain what to cover and what not cover.

"The reason is because the system is wrong.

"In next few years that system has its best opportunity for 50 years to change; the best opportunity to get rid of the silliness which is the NHS and PMI divided and never the twain shall meet.

"And instead we can create a middle ground that will introduce some of the 40m people who don't have a product we sell and who aren't interested in our industry.

"If we can do that, that's where our golden era lies," he added.

Benjamin suggested the economy was likely to dominate a slow market for the next five years but that everyone should "stop avoiding the storm and start dancing in the rain because that's what we've got to work with and that's what we've got to enjoy.

"But it is going to come back to growth and what condition are we going to be in when it does?" he added.

Benjamin also apologised for "breaking some eggs that have affected brokers" while conducting the Groupama purchase but said he was not apologising for "building a healthcare organisation strong enough for the 21st century.

"For last eight years we've not had a single remedial action by the FSA, which we think is unique in financial services and they think is a miracle."

Responding to questions from delegates, he said expansion to international PMI was not in the current plans because the present business focus is in the UK, but that a partnership may be introduced.

And he defended the need for both a direct and intermediary sales route.

"I'm happy with both and they are both appropriate and they keep us all on our toes," he said.

"I'm very comfortable about that and I am content there is room in the market for both."

Benjamin concluded his speech by saying the provider was still looking to grow its market share to an appropriate size.

"We're not finished, there will be some more consolidation in the market," he said.

"The markets will keep changing until they settle down with structure that is sufficient for what's out there and products will change too, but we won't change core of what we do.

"We've had fabulous support from you and thank you.

"We're going to push Simplyhealth towards 10% of the market - we're not going towards the dizzy heights of the market, 10% is a very sensible place for us to be," he added.

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