Table of Contents
Issues in the Market
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- Key issues
- Market definitions
- Abbreviations
Insights and Opportunities
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- Scope to increase take-up
- SME potential
- Room to improve customer service
- What customers really want
Market in Brief
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- A game of two halves
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- Figure 1: Number of PMI subscribers and gross earned premiums, by sector, 1996, 2006 and 2007
- The forces at play
- The challenge
- The opposition has just got better
- Two brands dominate the field
- Brand reinforcement
- Selling the brand
- So who’s buying?
- Are members happy?
- Hygiene concerns give insurers an advantage
- Purchasing persuaders
Fast Forward Trends
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- Trend 1: ‘Holistier’ than Thou
- Definition
- Context
- Market implications
- Trend 2: Customise This!
- Definition
- Context
- Market implications
Broader Market Environment
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- Key points
- Steady income growth forecast
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- Figure 2: Total PDI, consumer expenditure and PDI per capita, at constant 2003 prices, 2003-12
- Outlook
- Implication
- Corporate UK in fine fettle
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- Figure 3: Gross operating surplus of private non-financial corporations, 2000-06
- Implication and opportunity
- Workers want health benefits
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- Figure 4: Top ten company benefits and ten most desired, January 2007
- Scope to target more SMEs
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- Figure 5: Number of private sector enterprises, employees and turnover – UK, start 2006
- Implication and opportunity
- The business argument for PMI
- Implication and opportunity
- Employment trends
- New age discrimination laws undermine the sustainability of group PMI
- Extra regulatory burden
- Ageing in poor health
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- Figure 6: Years of poor health, by gender – England and Wales, 1981 and 2001
- Implication and opportunity
- Cancer risk increases with age
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- Figure 7: Age-specific incidence of all cancers, by gender – UK, 2003
- Lifestyle illnesses
- Implication
- Sun worshippers beware
- Smoking continues to lose appeal…
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- Figure 8: Prevalence of cigarette smoking among GB adults aged 16+, by gender, 1974-2005
- Implication
- …but obesity is on the rise…
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- Figure 9: Number of obese men and women – England, 2003 and 2010
- Implication
- …and alcohol remains the number one vice
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- Figure 10: GB adults exceeding specified levels of alcohol*, by gender and age, 2005
- Implication
- Lifestyle underwriting
- Recreational activities
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- Figure 11: Top ten sports, games and physical activities among adults in England, by gender and age, 2005/06
- Implication and opportunity
Internal Market Environment
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- Key points
- Greater spending on the NHS…
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- Figure 12: NHS expenditure (England), 2000/01-2007/08
- …leads to shorter waiting times…
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- Figure 13: Inpatient waiting times (England), 2003-07
- Figure 14: Outpatient waiting times (England), 2004-07
- Implication
- …but there will be reduced investment post-2008
- Implication and opportunity
- Claims costs pick up in 2006 after three years of slower growth
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- Figure 15: Claims amount incurred and claims as a proportion of gross earned premiums, 1998-2006
- Implication
- Better claims management and increased competition slow premium inflation
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- Figure 16: Average PMI premium, by sector, 2002-07
- Implication
Competitive Context
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- Key points
- Healthcare funding options
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- Figure 17: The main methods of obtaining healthcare treatment in the UK, 2007
- Self-insured schemes are proving popular with large employers
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- Figure 18: Number of subscribers and people covered by PMI and healthcare trust schemes, 2002-06
- Penetration of PMI and related healthcare products
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- Figure 19: Penetration of PMI and related healthcare products, July 2007
- Demand for dental plans boosted by decline in NHS dentistry
- Health cash plans are a low-cost alternative
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- Figure 20: Number of health cash plan subscribers, people covered and contribution income earned, 2002-06
Strengths and Weaknesses in the Market
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- Figure 21: PMI – SWOT analysis, 2007
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Who’s Innovating?
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- Heightened activity
- In search of more affordable solutions
- Stressing wellness, not illness
Trade Perspective
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- About the respondents
- Personal sector recovery?
- More choice, more transparency
- Space for all
- Trials and tribulations
- Coming together
Market Size and Forecast
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- Key points
- A rejuvenated market
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- Figure 22: Number of PMI subscribers, people covered and gross earned premiums, 2002-07
- Individual business represents an important revenue stream
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- Figure 23: Proportional distribution of PMI subscribers, people covered and gross earned premiums, by sector, 2007
- New sales opportunities
- A slight pick-up in subscriber numbers…
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- Figure 24: Number of PMI subscribers and people covered, by sector, 2002-07
- …boosts total premium income
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- Figure 25: PMI gross earned premiums, by sector, 2002-07
- Gradual expansion in subscriber numbers forecast
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- Figure 26: Number of PMI subscribers and people covered, by sector, 2002-12
- Healthy income growth expected
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- Figure 27: PMI gross earned premiums, by sector, 2002-12
- Premium rate growth
- Factors incorporated
Market Share
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- Key points
- Movers and shakers
- BUPA and AXA PPP dominate the market
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- Figure 28: PMI provider rankings, by subscription income, 2005 and 2006
- The top four all see market share growth
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- Figure 29: Illustration of PMI providers’ market shares, 2005 and 2006
- Third-party administrators
Companies and Products
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- BUPA
- AXA PPP healthcare
- Norwich Union Healthcare
- Standard Life Healthcare
- CIGNA HealthCare
- WPA
- Simplyhealth Group
- Exeter Friendly Society
- PruHealth
- CS Healthcare
Brand Communication and Promotion
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- Key points
- Adspend stabilises
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- Figure 30: Total advertising expenditure on health insurance products, 2002/03-2006/07
- TV and direct mail account for the largest proportion of spend
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- Figure 31: Proportional distribution of health insurance adspend, by main media type, 2002/03-2006/07
- BUPA’s strong brand maintained by high ad investment
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- Figure 32: Top ten advertisers of health insurance products, by adspend, 2004/05-2006/07
- In sickness and in health
Channels to Market
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- Key points
- Intermediaries generate the majority of corporate PMI sales…
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- Figure 33: Proportional distribution of PMI sales, by channel, 2005 and 2006
- …while most individual sales are arranged direct
- Implication and opportunity
- Online progress
- Strategic partnerships: enter the retailers
The Consumer 1 – PMI Penetration
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- Key points
- Survey background
- PMI is one of the more commonly held protection products
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- Figure 34: Ownership of PMI and other related products, July 2007
- Observation
- Significant overlap
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- Figure 35: Ownership of PMI and other related products – cross-analysis, July 2007
- Implication
- Corporate PMI holds ground
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- Figure 36: Trends in ownership of PMI and other health products, 2003, 2005 and 2007
- Around one in six members are covered by a partner’s policy
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- Figure 37: Distribution of PMI, by method of arranging policy, July 2007
- The typical PMI subscriber is a 35-44-year-old man
- Implication and opportunity
- CHAID analysis
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- Figure 38: Target groups identified for health insurance products, July 2007
- Standard policies are the most popular
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- Figure 39: Type of PMI policy owned, July 2007
- Over-55s tend not to scrimp on cover
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- Figure 40: Type of PMI policy owned, by gender and age, July 2007
- ABs are most likely to have comprehensive cover
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- Figure 41: Type of PMI policy owned, by socio-economic group and household income, July 2007
The Consumer 2 – Policyholder Experience
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- Key points
- Family policies account for a fifth of the market
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- Figure 42: PMI member attitudes and experiences, July 2007
- Implication
- Scope to improve customer service
- Implication and opportunity
- Low level of turned-down claims
- Implication
- Switching is more prevalent in the personal sector
- Implication and opportunity
- Comprehensive policyholders are most satisfied…
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- Figure 43: PMI member attitudes and experiences, by type of cover, July 2007
- Implication
- …and also the most likely to make a claim
- Implication
- No-claims bonus is relatively rare
- Claims ratio rises with age
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- Figure 44: PMI member attitudes and experiences, by gender and age, July 2007
- Implication and opportunity
- Those who can afford to will extend cover to other family members
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- Figure 45: PMI member attitudes and experiences, by socio-economic group and household income, July 2007
The Consumer 3 – Targeting Opportunities
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- Key points
- Half of all adults are worried about hygiene standards in NHS hospitals
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- Figure 46: Attitudes towards the NHS and private healthcare, July 2007
- One in four would take the self-pay route
- One in five would go private to get drugs not available on the NHS
- Scope for further growth
- Target group analysis
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- Figure 47: Healthcare target groups, July 2007
- PMI Targets
- Self-payers
- Floaters
- NHS Advocates
- Disengaged
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- Figure 48: Target group composition, by attitudes towards the NHS and private healthcare, July 2007
- Self-payers and PMI Targets are most likely to have health cover
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- Figure 49: Ownership of PMI and other health products, by target group, July 2007
- Those who have PMI are healthier and fitter than those who don’t
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- Figure 50: Health status, by ownership of PMI, July 2007
- Over-55s get top marks for diet
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- Figure 51: Health status, by gender and age, July 2007
- PMI Targets and Self-payers are the healthiest clusters
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- Figure 52: Health status, by target group, July 2007
- Registering with an NHS dentist is top gripe…
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- Figure 53: Proportion of adults who have had difficulty accessing health advice or treatment, by PMI ownership, July 2007
- Implication and opportunity
- …especially with 25-34-year-olds
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- Figure 54: Proportion of adults who have had difficulty accessing health advice or treatment, by gender and age, July 2007
- A high proportion of PMI Targets have experienced trouble seeing a GP
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- Figure 55: Proportion of adults who have had difficulty accessing health advice or treatment, by cluster, July 2007
The Consumer 4 – Key Selling Points
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- Key points
- Customers want transparency above all else
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- Figure 56: Most persuasive factors determining product selection, by ownership of PMI, July 2007
- Implication and opportunity
- ‘Two-year wait to get cover’ is a brave move by PruHealth
- Gym membership: nice if you can get it
- Promising potential
- PMI Targets are most persuaded by price
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- Figure 57: Most persuasive factors determining product selection, by healthcare target group, July 2007
- Scope to improve take-up among 25-44-year-olds
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- Figure 58: Top six persuasive factors, by gender and age, July 2007
- ABC1s take note of recommendations
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- Figure 59: Top six persuasive factors, by socio-economic group, July 2007
- Further analysis
PMI Penetration – Detailed Demographics
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- Figure 60: Ownership of PMI, by method of arrangement and by gender, age, socio-economic group, marital status, lifestage, Mintel’s Special Groups and working status, July 2007
- Figure 61: Ownership of PMI, by method of arrangement and by tenure, gross annual household income, region and ACORN category, July 2007
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- Figure 62: Ownership of PMI, by method of arrangement and by new technology usage, newspaper readership, commercial TV viewing and supermarket usage, July 2007
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Profile of Target Groups – Detailed Demographics
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- Figure 63: Healthcare cluster profile, by gender, age, socio-economic group, marital status, lifestage, Mintel’s Special Groups and working status, July 2007
- Figure 64: Healthcare cluster profile, by tenure, gross annual household income, region and ACORN category, July 2007
- Figure 65: Healthcare cluster profile, by new technology usage, newspaper readership, commercial TV viewing and supermarket usage, July 2007
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