Table of Contents
Overview
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- What you need to know
- Products covered in this Report
Executive Summary
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- The market
- The PMI market declines in 2018
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- Figure 1: PMI, Estimated gross earned premiums, 2015-19
- Minimal growth forecast over the next five years
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- Figure 2: Forecast of PMI gross earned premiums, at current prices – Fan chart, 2014-24
- Claims data suggests improved profitability across the market
- NHS waiting lists continue to grow
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- Figure 3: Number of NHS patients waiting for diagnostic tests and procedures, and proportion who are waiting over six weeks (monthly basis) – England, January 2011-May 2019
- Companies and brands
- Bupa accounts for an estimated 39% of the PMI market
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- Figure 4: Estimated market share of the PMI Market, 2018
- Mental health a key focus for the larger brands
- Virtual GP services are rolled out to the individual market
- Adspend increases by over 10% in 2018/19
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- Figure 5: Above-the-line, online display and direct mail advertising expenditure on private healthcare insurance, 2018/19*
- The consumer
- One in four shows interest in individual PMI
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- Figure 6: Interest in health cover, August 2019
- Consumers find it hard to understand what is covered by PMI
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- Figure 7: Attitudes towards private health insurance, August 2019
- Over 80% are happy to rely on the NHS
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- Figure 8: Attitudes towards healthcare among non-insurance holders, August 2019
- Specialist treatments most appeal to those interested in PMI
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- Figure 9: Interest in PMI benefits, August 2019
- Consumers are unconvinced by virtual GPs
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- Figure 10: Attitudes towards virtual GP services, August 2019
- What we think
Issues and Insights
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- Virtual GPs are a welcome addition; consumers need convincing
- The facts
- The implications
- Mental health cover is welcomed by consumers, and offers scope for further product development
- The facts
- The implications
The Market – What You Need to Know
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- The PMI market declines in 2018
- Minimal growth forecast over the next five years
- Claims data suggests improved profitability across the market
- NHS waiting lists continue to grow
- The NHS continues its digital transformation
Market Size and Forecast
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- Slight decline in the PMI market in 2018
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- Figure 11: PMI, estimated gross earned premiums, 2015-19
- The PMI market grows more reliant on corporate business
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- Figure 12: Segmentation of PMI, by policyholder type, 2015-18
- Little change expected in the PMI market over the next five years
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- Figure 13: Forecast of PMI gross earned premiums, at current prices – Fan chart, 2014-24
- Figure 14: Market size and forecast for estimated gross earned premiums, at current and constant prices, 2014-24
- Forecast methodology
Market Drivers
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- Improved profitability across the medical expense insurance market
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- Figure 15: Medical expenses insurance – Claims and underwriting ratios (ABI members only), 2016-18
- Positive economic conditions for the PMI market…
- …but uncertainty looms
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- Figure 16: GDP per head at current market prices, real household disposable income per head, consumer price inflation and average wage growth, Q1 2015-Q1 2019
- Preventing future issues is a major driver behind improving health and wellbeing
- Waiting times continue to rise…
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- Figure 17: Number of NHS patients waiting for diagnostic tests and procedures, and proportion who are waiting over six weeks (monthly basis) – England, January 2011-May 2019
- …while GP practices are closing and are pushed for time
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- Figure 18: Total number of GP practices vs total number of minutes available per patient per year, September 2015-March 2019
- The NHS is continuing its digital transformation
Companies and Brands – What You Need to Know
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- Bupa accounts for 39% of the PMI market…
- …while VitalityHealth performs strongest in individual sales
- Mental health a key focus for the larger brands
- Virtual GP services are rolled out to the individual market
- Established brands and challengers offer affordable solutions to PMI
- Adpsend increases by over 10% in 2018/19
Market Share
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- Bupa accounts for close to 40% of the PMI market
- AXA indicates significant growth in 2018
- Aviva’s revenue declines in 2018
- VitalityHealth bucks the market trend
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- Figure 19: Estimated market share of the PMI market, 2018
Competitive Strategies and Innovation
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- Large brands focus on mental health cover developments
- With Bupa and VitalityHealth at the forefront
- Aviva adds addictions to its employee offering
- Other developments in mental health and wellbeing
- New solutions help reduce the cost of PMI
- Through established brands
- And new challengers
- Virtual GP services are rolled out to the individual market
- Amazon continues its shift into the healthcare market
Advertising and Marketing Activity
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- VitalityHealth drives the increase in adspend in 2018/19
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- Figure 20: Above-the-line, online display and direct mail advertising expenditure on private healthcare insurance, by advertiser, 2018/19*
- Direct mail and radio account for over 40% of total adspend
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- Figure 21: Above-the-line, online display and direct mail advertising expenditure on private healthcare insurance, by media type, 2018/19*
- Nielsen Ad Intel coverage
The Consumer – What You Need to Know
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- Consumer confusion surrounding PMI ownership
- A quarter show interest in individual PMI
- Consumers find it hard to understand what is covered by PMI
- Over 80% are happy to rely on the NHS
- Specialised treatments most appeal to those interested in PMI
- Consumers are unconvinced by virtual GPs
Interest in Arranging Health Insurance
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- A quarter are interested in PMI that they arrange themselves
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- Figure 22: Interest in health cover, August 2019
- Younger couples with and without children are most interested
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- Figure 23: Interest in PMI which people arrange themselves, by lifestage, August 2019
Attitudes towards Private Health Insurance
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- The majority find health insurance difficult to understand…
- …and are wary that added extras are pushing up costs
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- Figure 24: Attitudes towards private health insurance, August 2019
- Price is a major barrier for those interested in health cover
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- Figure 25: Agreement with attitudes towards private health insurance, by ownership & interest in PMI or limited cover policies, August 2019
- Under-45s are more likely to be looking for health and wellbeing support
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- Figure 26: PMI – CHAID – Tree output, August 2019
Health Insurance Alternatives
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- Over 80% are happy to rely on the NHS
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- Figure 27: Attitudes towards healthcare among non-insurance holders, August 2019
- Higher earners more likely to self-pay…
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- Figure 28: Attitudes towards healthcare among non-insurance holders, by household income, August 2019
- …as well as those interested in taking out a policy
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- Figure 29: Attitudes towards healthcare among non-insurance holders, by interest in health cover, August 2019
Interest in PMI Benefits
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- Healthcare features remain core to PMI proposition
- Specialised treatments can convince those interested in PMI…
- …while rewards for living a healthy lifestyle are becoming increasingly influential
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- Figure 30: Interest in PMI benefits, August 2019
- Mental health cover appeals to one in four
- Specific benefits can be used to target particular customers
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- Figure 31: Interest in PMI benefits, by generation, August 2019
Attitudes toward Virtual GP Services
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- Significant concerns about the effectiveness of virtual GP services
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- Figure 32: Attitudes towards virtual GP services, August 2019
- Those interested in cover have less concerns about Virtual GPs
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- Figure 33: Agreement with attitudes towards virtual GP services, by ownership & interest in PMI, August 2019
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
- CHAID analysis methodology
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- Figure 34: Private Medical Insurance – CHAID – Table output, August 2019
Appendix – Market Size and Forecast
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- Figure 35: Forecast of estimated PMI gross earned premiums, at current prices – best and worst case, 2019-2024
- Forecast methodology
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