Partner insight: Are health insurers really out to make profits at the expense of their customers?

Complaints about PMI are lower than average

Gareth Jones
clock • 2 min read
Partner insight: Are health insurers really out to make profits at the expense of their customers?

Press coverage of insurers failing to pay out claims is not accurate when it comes to PMI, although it is important to select the right provider, according to the non-profit health insurer WPA.

Much of this myth has been perpetuated by negative press coverage about companies in all areas of insurance not paying out claims.

However, if it was true, the Financial Ombudsman Service (FOS) would be continually upholding complaints against PMI providers. 

Between January 1st and March 31st 2021, the FOS had 422 new complaints about PMI and dental insurance but only 16% were upheld - less than half the average uphold rate for financial services products generally. 

In many cases insurers were simply declining claims excluded by their policy wordings - often, for example, because of chronic or pre-existing conditions. 

WPA, which is unusual in volunteering details of FOS complaints against it, has had less than 10 FOS adjudications against it in 10 years. But, sadly, it is only those claims that don't get paid that tend to make good stories, so these are the ones that are picked up and heard about the most. 

Insurance must be chosen wisely

As with other areas such as cover, features and technological prowess, some insurers have better claims capabilities than others. So, it is important to select the most suitable fit for individuals or employees.

Edward Watling, senior employee benefits consultant at Mattioli Woods, says: "The key is ensuring that your insurance provider has your interests at heart and that it will be there for you if you do make a claim. That factors into everything an insurer does.

"The process of applying and setting up PMI needs to be easy, the claims process should be straightforward, and solutions for claims challenges should always be forthcoming. The insurers that cannot offer that know they will lose customers quickly."

For not-for-profit insurers there is simply no incentive not to put customers first as they are unhampered by the demands of shareholders.

WPA's general manager of retail insurance, Amy Saber, says: "Our focus is not on short-term gains or increasing premiums but offering health insurance and services to the masses that are honest and transparent and of the sort that we want for ourselves and our families."

Importantly, she adds, the group trains all staff regularly to deal with customers on an individual basis at what is normally a stressful or vulnerable time. "It is important we look at the challenges on a case-by-case basis, rather than apply a blanket approach to all claims." 

This myth-busting article is one of a series of 10 addressing common myths around PMI. Access the full list

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