PHC seeks to calm brokers' merger fears


The Permanent Health Company (PHC) has sought to reassure advisers' and quell concerns that its new five year underwriting deal with Axa PPP will eventually result in a takeover.

However brokers remain unconvinced by the move and fear it will lead to another private medical insurance (PMI) provider leaving the market.

As COVER reported earlier, PHC sent a wave of unease through the market when it announced the agreement on its website.

But the firm sought to halt any rumours of its potential purchase by Axa PPP and said it was simply performing a regular review of its services.

John Stafford, managing director of PHC, told COVER that he sympathised with advisers but was adamant that selling up had never been considered.

"We are not pulling out in anyway whatsoever, we're not selling," he said.

"We are not remotely interested in selling or anything else and there's never been a discussion about a sale or option for purchase.

"But I understand brokers' concerns and with Groupama likely to go into Simplyhealth, ultimately they see that as one less provider in the market," he added.

Stafford continued by explaining the nature of the deal and what it will mean for the new products.

"It's a long term agreement - our previous underwriters were Great Lakes with whom we have no issues - but every few years we have a review of what's available in the underwriting market place.

"This time round it seemed to us to be a better package for our clients and for us with Axa.

"We do have our own terms and conditions and underwriting programme and we've picked up some ideas from Axa and retained some of our own," he added.

An Axa PPP spokesperson said the provider was pleased PHC had chosen it to underwrite its products and was looking forward to servicing its customers.

The Association of Medical Insurance Intermediaries (Amii) expressed concern at the initial announcement and this has since been echoed by other brokers.

Lindsey Joseph, membership secretary of Amii, told COVER that if PHC were to disappear it would be a big blow to the market following Groupama's purchase.

"We're waiting for clarification, but there is a concern because you've got smaller providers who offer unique selling points from a service point of view and they are not as fixed in their interpretation," she said.

"So to lose these types of companies would be extremely detrimental to the marketplace because it's not offering diversity in terms of service as well as benefits."

Joseph added that she was unsure of how the agreement would affect the future underwriting decisions.

"Axa PPP have a particular way and are an excellent underwriter but it's fairly fixed," she continued.

"They have certain processes and protocols that are indicative of a fairly large organisation, while PHC have a more conversational approach and providing it does not over expose them you can have a conversation.

"It'll be interesting to see how things move forward but I think we are losing the individual identities of the smaller providers and that will be a loss to the industry.

"But the industry in fairness cannot continue as it is - there have to be some serious changes to make it more viable and sustainable," she added.

Brian Walters of Regency Health repeated these concerns on twitter, querying how long the arrangement would continue solely as an underwriter, while the similar situation which resulted in the takeover of Health Online was also noted.

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