Laing & Buisson's annual report indicates direct sales are dominating the individual PMI market
Recent figures from Laing & Buisson have shown that a total of 85% of individual private medical insurance (PMI) policies were sold directly by insurers in 2002, suggesting more could be done to assist providers with their intermediary sales.
While sales of PMI through advisers were prevalent in the corporate sector, surprisingly, it was direct sales that dominated the individual market.
Stephen Walker, chief exe- cutive of Medical Insurance Services, said he was surprised by the distribution statistics.
'I am shocked that 85% of individual polices were sold directly in 2002. Does this mean that more should be done to help insurers with intermediary sales rather than direct sales, or could it be that there are not that many intermediaries in the market?' he said.
The report also shows that the PMI market as a whole grew by 1% in 2002. Sales of corporate policies also increased by 0.2%. However, individual sales continued to slump and fell by 1.4% on the previous year.
The key growth area in 2002 was for non-insured medical expenses schemes, which enables companies to operate a healthcare fund but not take out medical insurance cover. This rise in the number of non-insured medical expenses schemes is likely to continue, and could be the way forward for the corporate sector.
'Trust schemes could be the future for the corporate sector, it certainly seems to be heading that way. It may be a better alternative for the larger companies and there has been a surge in popularity among this type of product recently,' said Walker.
The report also highlights a more efficient and better performing NHS, forthcoming Financial Services Authority regulation in 2005 and the growth of the self-pay market as the major threats facing the PMI industry.
'On the one hand, growth in the number of private healthcare self-payers may substitute what would be demand for private medical insurance. But on the other hand, growth in private healthcare spending in general indicates an increased public interest in private treatment options and may boost demand in the future as self payers may want to cover themselves for future treatments,' said the report.
