Standard Life targets big business with capped-liability products
Standard Life Healthcare (SLH) has extended its presence in the large corporate private medical insurance (PMI) market by launching into the 'cost plus' sector.
Cost plus schemes are priced according to the claims fund that is agreed between the client and the insurer. They are based on a reasonable projection of total claims for the forthcoming year, plus an administration fee, Insurance Premium Tax, and premium.
The insurance cover protects the company against any claims that significantly exceed its claims fund, and it enables large companies to cap their liability at an agreed level while the scheme is managed and administered by the insurer.
Cost plus will be offered in three levels of cover, which cap the client's liability at 125%, 133% or 140% of the claims fund. If the company's claims volume goes above its chosen cap, SLH will pick up the difference. If claims are lower, the difference will be refunded.
Commenting on the launch, Iain McMillan, sales and marketing director at SLH, said: "This is part of our deliberate but steady approach to the large corporate market to allow us to offer value-added products that customers want."
The launch follows SLH's recent research into consumer attitudes towards healthcare, which showed that 81% of individuals cited less waiting time for treatment as a valuable benefit of PMI. A total of 54% of people questioned said they valued the service provided by health and support lines.
While 85% of people said they would opt to pay rather than wait for treatment, the report stresses that many people do not know the true cost of treatment. It showed that 61% of people thought a heart bypass operation would cost less than £14,500, while four out of five people underestimated the cost of a knee replacement.
Interestingly, SLH's move towards the corporate market aligns with 58% of those interviewed in the survey who believe employers should be responsible for employee healthcare.
Mike Hall, chief executive of SLH, said the survey showed that clear and concise attitudes to healthcare among consumers strengthened the need for PMI.
"People want to wait less time for treatment; they will pay out large sums to avoid a wait; but they don't know the actual costs of healthcare - so they need insurance," he said.
