PricewaterhouseCoopers' latest report stated individual PMI will become obsolete
By Johanna Gornitzki
The individual private medical insurance market (PMI) could become more or less redundant in the next few years, according to a report from PricewaterhouseCoopers (PwC).
The report, which examined the changing role of health insurers in various countries, warned the UK PMI market risks becoming a largely corporate group market that would only provide cover for policyholders through their working years.
It also stated the market will mainly be available to the wealthy.
Commenting on the findings, Paul Clarke, partner of the insurance practice at PwC, said: "The individual PMI market has been stagnant for a long time. While I don't think the individual PMI market is doomed, as there will always be a need for this sector, the increasing cost of private healthcare will see less people buying individual policies."
He added the PMI sector should seek to enter a partnership with the public health sector.
"There are opportunities for the private market to work more closely with the Government and the NHS to see whether they can produce a hybrid product," Clarke said.
Disagreeing with this sentiment, Susie Colley, managing director at West Country Health Care, said: "This is not what I have been hearing from the market. The report is not wrong in saying more companies will opt for PMI, but I do not think it is going to take up all and sundry.
"Instead, I think both the individual and corporate markets will see an increase in sales over the coming years," she added.
Stephen Walker, chairman of the Association of Medical Insurance Intermediaries, argued the report did not mirror the reality.
He said: "The result flies in the face of what has been happening in the individual market over the past 18 months, with all insurers addressing the affordability factor, and it doesn't take into account that the market is changing.
"I think PMI is becoming a necessity for more and more people," he added.
He agreed with Clarke that a partnership between the Government and the PMI industry "would be a way forward". However, he said he did not think it would happen soon.
"No politician is going to make drastic changes to the NHS as that will be political suicide," he concluded.
