A bumpy year for the PMI market

While it is a positive to read that overall the number of people covered in 2007 rose to 6,004,000 from 5,879,000 the year before, the individual side looked disappointingly bleak.

The drop between 2007 and 2006 (1,691,000 down to 1,663,000) was even steeper than the one experienced between 2006 and 2005 (1,695,000 down to 1,691,000). Judging by the individual sector’s track record over the last decade, this does not look set to change.

Thankfully, the corporate PMI market has been faring slightly better. Yet again the number of people covered on the corporate side has increased - up from 4,188,000 in 2006 to 4,341,000 in 2007. This is the highest it has been since 2001 when the total number of people covered on the corporate side rose to 4,704,000. After 2001, it seemed to nose dive, mirroring the individual sector to then revive in 2005.

Jonathan French, spokesman for the ABI, attributed this to an increasingly competitive labour market and employers having to look for add-ons to remuneration packages. “It is also an effective way of ensuring that in the event of serious illness or injury among their workforce, people can get treatment sooner and therefore get back to work quicker,” he explained.

It has been an eventful month for the PMI sector. The decision by many PMI firms not to publish any claims sharing information in the small-to-medium sized enterprise (SME) market has reached a stalemate.

Sharing claims information is normal practice in the corporate PMI market as well as in the general insurance industry but despite this most PMI providers refuse to publish any claims information for SME firms.

Groupama – one of the few insurers to share claims information for SMEs – said refusing to publish this kind of data would effectively treat customers unfairly.

Since publishing the story in the April issue of COVER, Groupama has confessed that no further action has been taken by the industry to resolve the issue. Jamie Marchant, marketing and communications director at the firm, said that it would be more than happy to enter into a dialogue with other industry players about resolving the issue but no firm has come forward.

Groupama thinks Axa and Bupa are such big forces in the market that they may not feel the need to liaise with smaller players in a bid to, what many will interpret as, helping the competition. But surely through failing to share such information, the larger players’ actions will be to the detriment of the consumers.

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