The PMI industry must rapidly evolve and become attractive to younger people the Association of Medical Insurance Intermediaries' (AMII) Private Healthcare Summit has heard.
Wayne Pontin, chairman of AMII, said: "We have all been complacent.
"The industry has thrown premiums against claims for too long, without getting to grip with costs. The revenues for private hospitals have grown by 132% since 1995, whereas membership growth has stagnated, it is virtually non-existant.
"PMI is fast becoming unaffordable.
"Will the public pay for health insurance? The answer is yes if we innovate. We need to integrate our products
with the NHS, we need to reform as the NHS reforms."
Nick Bosanquet, professor of health policy at Imperial College London, told delegates: "At a time when the NHS is under stress the number of people willing to pay for service through insurance is dropping. That is hardly a recommendation for a sound industry.
"The NHS will survive, held together by political foerces and the lack of any real alternative. But there will be no survival of the welfare state. The return on private savings is falling as the level of support from state benefits is also falling.
"People are going to realise that thweir earning power will depend on their health and fitness, their own personal capability. There will be a market for the quick access to services that can protect that capability.
"PMI needs to get to these younger people and position themselves as helping. A business that just has ageing custyomers will die with its customers."