The durability of the PMI market was again underpinned by growing corporate demand for traditional private medical insurance in 2007, up 2.3 per cent, as the self-insured corporate medical expenses market remained largely static.
The number of people with PMI policies in the UK or enrolled in medical schemes self-insured by employers, rose modestly for the second successive year, up by 1.3 per cent in 2007 to reach 4,250,000 at the start of 2008. The rise in demand in the last two years, up 2.8 per cent, followed a small fall of 0.7 per cent over the previous three years.
The downward trend in individual PMI demand continued but decelerated in 2007 (down only 0.5 per cent). Individual policyholders have fallen from a peak of 1,457,000 in 1996 to a low of 1,091,000 at the end of 2007, but a reported pick up in individual PMI demand by several leading insurers in the first half of 2008, suggests that the falling trend may level off this year. The total number of people covered by PMI and self-insured medical expenses schemes was 7,492,000 at the start of 2008, representing 12.3 per cent of the UK population.
Growth in the corporate area saw cash plan numbers grow to 2,992,000, the market’s first significant growth of the decade. Employer paid cash plans rose by 27 per cent, from a small base, to reach 293,000 contributors.
Philip Blackburn, author of the report and economist says: “The industry has to be optimistic following two years of growth at a time when the UK’s public health service has undoubtedly improved, and economic growth has started to slow. Private corporate healthcare cover solutions remain a strong and growing preference and private medical insurance for individuals retains many desirable features that can’t be matched by a budget restricted NHS. After a period of massive investment, the NHS is highly unlikely to continue its rate of improvement going forward with smaller fundinggrowth planned to meet rising healthcare expectations and needs.’
Fiona Harris, head of personal markets of Bupa UK Health Insurance, said: “The latest figures from Laing & Buisson reveal the PMI market to be in robust health and certainly reflect our own experience of increasing demand. Throughout 2007 we saw good overall growth in both corporate and individual PMI and the market’s sustained confidence has continued into this year, bucking the trend of the credit crunch.
“There are of course challenges ahead. We currently look after the health and wellbeing of working employees in nearly nine out of 10 FTSE 100 companies. Increased investment and encouraging employers to take more responsibility for their employees’ needs in these areas is central to the future. Although there has been a raft of Government initiatives, feedback we have received suggests that the current tax treatment of workplace health benefits is an obstacle. Remove it – and companies will have a real incentive to play their part in keeping Britain healthy.”