Future growth of the healthcare cash plan market lies in the corporate sector, claims the latest mar...
Future growth of the healthcare cash plan market lies in the corporate sector, claims the latest market report from Laing & Buisson. It reveals that corporate demand for cash plans has been growing in recent years and that the potential to increase penetration lies on the saleability of cash plans as risk management products to businesses.
Discussing the figures, Jill Davies, executive director at Westfield Health, said the corporate sector is buoyant and certainly offers growth potential.
'The corporate sector is very strong, particularly as many sales are driven by the employer looking to provide benefits for its staff. Many want to buy cover and will often approach advisers or companies directly and drive the sales process as a result,' she said.
Despite this growth potential, the market as a whole saw a decrease of 9.6% in market penetration last year compared to 2001. Similarly, financial performance for the sector was down in 2002, where an operating profit of around £10m was made, compared to £15m in 2001.
The main drivers for the rise in cash plan sales are cited as the future demand for NHS and private primary care services in the UK, coupled with higher charges for medical services. It is expected however, that the market is more likely to stabilise or grow marginally over the course of the next few years than experience a huge growth in sales.
Further changes are likely to be seen in the product development side of the market. Providers are likely to continue widening the scope of products to include more benefits for consumers, the report said.
Recently, optical cover has been broadened to include laser eye surgery and diagnostics such as health screenings and X-rays have also been introduced. Further changes include 24-hour healthcare and information help lines to provide consumers with access to medical advice.
'The market has seen and is likely to continue to see a great deal of product innovation in terms of changing the range of services available in order to meet the changing needs of the consumer,' Davies said.
