The UK private medical insurance (PMI) market risks becoming an ‘irrelevance - a Yellow Pages in the age of Google' if the sector could not improve affordability, quality and service, Bupa UK's Alex Perry has warned.
Speaking at the LaingBuisson Private Healthcare Conference, the UK general manager for Bupa UK Customer said the UK PMI market was failing to fix "systematic problems and continued stagnation."
Perry added: "At the moment our market is going absolutely nowhere. Laing & Buisson recorded a small decrease in PMI subscribers in 2014 in the market - and this comes at a time of record numbers in employment and record population. This is on the back of several years of stagnation.
"And we are slowly building to a crisis. The critically important personal market - people who on top of their taxes have stepped up to take responsibility and pay extra to fund much of their healthcare - has been shrinking every year since 1997 when tax relief was removed from some premium contributions.
"To reinforce this, the customer research we do at Bupa clearly tells us that many of the remaining customers are reaching the limits of what they can afford."
Perry also warned that fewer younger customers are coming into the market and the general body of customers was getting older.
However, he said that sustainable growth is still possible but only if the whole sector works together to drive better value and experience for customers.
He concluded: "We need to find a way forward where we can support the NHS more in meeting the UK's healthcare needs and challenges.
"We can only really do this by working together: insurers and hospital providers, and consultants and therapists - to deliver better value, a better experience and a better deal for the sector overall."
Perry said that the number one priority for the sector was affordability as year on year healthcare inflation had risen faster than general inflation and disposable income.
He said: "This is not the route to long-term sustainability. We speak to many people every day who call us and would dearly love to buy PMI but then don't because it is too expensive."
To address issues around cost, he said Bupa was looking to work with hospital providers to deliver better value for our customers.
He also said that PMI providers had to improve the customer experience.
He concluded: "But lower costs on their own are not enough; we also need to clearly demonstrate better quality and service or we risk becoming an irrelevance: A Yellow Pages in the age of Google. Working together to drive better value and a better experience for customers and a better deal for the industry must be our blueprint for growth."
Further reading
PMI needs IPT increase ‘like a hole on the head' - LaingBuisson
REVEALED: The health insurers passing on the IPT rise to employers
