Table of Contents
Issues in the Market
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- Key issues
- Market definitions
- Abbreviations
Future Opportunities
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- Helping to create a healthy and happy workforce
- PMI as a legacy
Market in Brief
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- PMI subscriber numbers decline by 5% during 2009
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- Figure 1: Number of subscribers and people covered by PMI, by sector, 2003-10
- Health cash plan contributors fall by more than 5% during 2009
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- Figure 2: Number of healthcare cash plan subscribers, people covered and contribution income earned, 2003-10
- Rising medical costs present a major headache for health insurers
- NHS creates challenges and opportunities for health insurers
- IPT increase could lead to increased interest in healthcare trusts
- Bupa dominates the PMI market
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- Figure 3: PMI provider market shares, by subscription income, 2009
- Simplyhealth is the major player in the health cash plan market
- Economic conditions reflected in recent product development
- Intermediaries see their share of market increase
- A quarter of adults have some type of healthcare cover
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- Figure 4: Types of insurance or savings have for health needs, April 2010
- Benefit preferences differ between existing and non-plan holders
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- Figure 5: Cash plan benefit preferences – all adults and existing plan holders, April 2010
- Consumers are broadly supportive of the NHS
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- Figure 6: Attitudes towards healthcare and healthcare cover, April 2010
Internal Market Environment
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- Key points
- NHS spending has increased by more than 60% since 2003/04...
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- Figure 7: Total public spending on the NHS, 2003/04-2010/11
- ...but NHS budget is likely to face increased pressure
- Waiting list times will be placed under scrutiny
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- Figure 8: Inpatient waiting times (England), 2007-10
- Figure 9: Outpatient waiting times, referral (England), 2007-10
- Growth in cancer rates creates a challenge for both the NHS and PMI providers
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- Figure 10: Age-standardised (European) incidence and mortality rates, all cancers (excluding non-melanoma skin cancer), Great Britain 1975-2008
- Funding cancer drugs evokes an emotive response
- PMI claims costs on an upward trend
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- Figure 11: Value of total PMI claims and as a proportion of GEP, 2002-09
- Providing sustainable PMI products
- Premiums growing faster in the personal sector
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- Figure 12: Average PMI premiums, by corporate and personal sectors, 2002-09
- HCP claims fall as contribution income falls
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- Figure 13: Amount of HCP cash benefits paid and benefits paid as a percentage of contribution income earned, 2002-09
Broader Market Environment
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- Key points
- A more cautious approach to expenditure
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- Figure 14: Agreement with the statement ‘I spend money more carefully than I used to’, 2005-09
- PMI forms an important part of employee benefit packages
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- Figure 15: Proportion on employers offering particular benefits as core, March 2010
- Employers increasingly looking for ROI
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- Figure 16: Trends in absence levels, 1999-2009
- IPT increase is likely to impact the corporate PMI market
- The argument for tax relief
- Solvency II could have impact for some cash plan providers
- A lack of trust remains a major sticking point
Competitive Context
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- Key points
- The NHS – a national treasure
- NHS to face growing budgetary pressures
- Private healthcare in the NHS
- Self-insured medical expenses schemes are expected to grow
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- Figure 17: Number of subscribers and people covered by healthcare trust schemes, 2002-09
- 5% of adults have money set aside for medical expenses
Strengths and Weaknesses in the Market
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- Figure 18: Strengths and weaknesses in the health insurance market, 2010
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Who’s Innovating?
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- Key points
- Affordable health insurance
- Filling in the gaps
- Combining PMI and health cash plans
- Flexibility and affordability
- Taking health insurance online
- Lowering premiums through restricting treatment choice
- Cancer – a focus for product development
- Are health incentive schemes taking a back seat?
- Reducing the impact of IPT
Trade Perspective
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- Economic uncertainty creates a challenge for health insurers
- Insurers also face challenge from rising medical costs
- Changes to the NHS could create opportunities for innovation
- Product development and innovation
- The danger of a price war in the cash plan market
- Cash plan opportunities and challenges
- Intense competition in the broker market leads to an increase in switching activity
- Online sales channels have limited appeal
Market Size
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- Key points
- Recession leads to a 5% decline in PMI subscribers
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- Figure 19: Number of subscribers and people covered by PMI, by sector, 2003-10
- Challenging conditions expected to persist into 2010
- Corporate PMI premiums fall by 3% during 2009
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- Figure 20: Gross earned premiums (GEP) for PMI, by sector, 2002-10
- Health cash plan market declines by more than 5% in 2009
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- Figure 21: Number of healthcare cash plan subscribers, people covered and contribution income earned, 2003-10
- Market forecast
- Subscriber numbers expected to increase by 5% over the next five years
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- Figure 22: Forecast for number of subscribers and people covered by PMI, BY sector 2004-15
- Premiums will continue on an upward trend
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- Figure 23: Gross earned premiums (GEP) for PMI, by sector 2004-15
- Health cash plan market likely to experience subdued growth
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- Figure 24: Forecast for number of healthcare cash plan subscribers, people covered and contribution income earned, 2004-15
Market Share
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- Key points
- Bupa dominates the PMI market…
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- Figure 25: PMI provider market shares, by subscription income, 2009
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- Figure 26: Subscription income of the top ten PMI providers, 2005-09
- …and Simplyhealth is the largest provider of HCPs
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- Figure 27: HCP market share, by contribution income, 2005-09
Companies and Products
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- Major players
- Aviva
- AXA PPP healthcare
- Bupa
- PruHealth
- Simplyhealth
- Standard Life Healthcare
Channels to Market
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- Key points
- Corporate market relies heavily on intermediaries
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- Figure 28: Proportional distribution of PMI sales, by sales channel, 2005-09
- Direct channels account for more than two thirds of personal PMI
- Aggregator usage likely to increase
- HCPs are mainly sold through direct channels
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- Figure 29: Proportional distribution of HCP sales distribution, 2008 and 2009
Brand Communication and Promotion
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- Key points
- PMI adspend falls but not as steeply as anticipated
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- Figure 30: Private medical insurance adspend, 2007-09
- Bupa tops the advertiser list and accounts for 35% of sector adspend
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- Figure 31: Top 15 advertisers of PMI, by expenditure, 2007-09
- Product launches and rebrands boost adspend in 2009
- Direct mail and TV account for two thirds of PMI adspend
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- Figure 32: PMI adspend, by media type, 2007-09
The Consumer – Product Ownership
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- Key points
- Note on consumer research
- A quarter of adults have some type of health cover
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- Figure 33: Health insurance ownership, April 2010
- Ownership peaks among 45-54-year-olds
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- Figure 34: PMI and health cash plan ownership, by age, April 2010
- Health insurance ownership is linked to household income
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- Figure 35: PMI and health cash plan ownership, by household income, April 2010
- A fifth of cash plan owners also have PMI
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- Figure 36: Cross-analysis of health insurance product ownership, April 2010
- Around 5% of people have more than one type of health cover
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- Figure 37: Repertoire of health insurance ownership, April 2010
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- Figure 38: Types of healthcare cover owned, 2009
- Most people have comprehensive healthcare policies
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- Figure 39: Conditions/treatments included in healthcare cover, 2009
The Consumer – Health Cash Plan Benefits
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- Key points
- Cash plan holders have different benefit priorities than wider population
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- Figure 40: Cash plan benefit preferences – all adults and existing plan holders, April 2010
- Scope to improve cash plan benefit awareness
- Dental benefits have the widest appeal
- Cash plan benefit preference differs with age
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- Figure 41: Most popular cash plan benefits, by demographics, April 2010
- Health cash plans as a budgeting tool
- Health cash plans as a PMI add-on
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- Figure 42: Cash plan benefit preferences, by health insurance ownership, April 2010
The Consumer – Attitudes towards Healthcare and Healthcare Cover
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- Key points
- There is broad support for the work of the NHS
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- Figure 43: Attitudes towards healthcare and healthcare cover, April 2010
- Over-65s are among the biggest supporters of the NHS
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- Figure 44: Most popular attitudes towards healthcare and healthcare cover, by demographics, April 2010
- Support for the NHS does not prevent people from opting for private care
- Higher earners are more likely to worry about small print and exclusions
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- Figure 45: Further attitudes towards healthcare and healthcare cover, by demographics, April 2010
- Individual PMI holders are less positive about the NHS
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- Figure 46: Attitudes towards healthcare and healthcare cover, by most popular types of health insurance owned, April 2010
- The self-insured are more likely to be concerned about small print
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- Figure 47: Attitudes towards healthcare and healthcare cover, by next most popular types ofhealth insurance owned, April 2010
- Target groups
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- Figure 48: Healthcare cover, target groups, April 2010
Appendix – The Consumer – Product Ownership
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- Figure 49: Most popular types of health insurance owned, by demographics, April 2010
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- Figure 50: Next most popular types of health insurance owned, by demographics, April 2010
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Appendix – The Consumer– Health Cash Plan Benefits
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- Figure 51: Most popular cash plan benefits, by demographics, April 2010
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- Figure 52: Next most popular cash plan benefits, by demographics, April 2010
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- Figure 53: Other cash plan benefits, by demographics, April 2010
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Appendix – The Consumer – Attitudes towards Healthcare and Healthcare Cover
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- Figure 54: Most popular attitudes towards healthcare and healthcare cover, by demographics, April 2010
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- Figure 55: Next most popular attitudes towards healthcare and healthcare cover, by demographics, April 2010
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- Figure 57: Attitudes towards healthcare and healthcare cover, by target groups, April 2010
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- Figure 58: Types of insurance or savings have for health needs, by target groups, April 2010
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