Table of Contents
Overview
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- What you need to know
- Products covered in this report
- Report focus
Executive Summary
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- The market
- Gross earned premiums will inch upwards over the next five years
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- Figure 1: Forecast of PMI gross earned premiums, at current prices – Fan chart, 2012-22
- Corporate premiums are propping up the market
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- Figure 2: Gross earned premiums, by segment, 2011-16
- Claims costs are shaped by ongoing innovation
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- Figure 3: PMI claims amount incurred and claims ratio, by sector, 2011-16
- Increasing IPT has added to price inflation woes
- The economic environment offers little support to PMI sales
- Companies and brands
- Bupa takes the top spot by customer share
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- Figure 4: Private healthcare insurance provider, April 2017
- Medical technology, GP access, and mental health are key strategies
- TV advertising drops off in 2017
- Newer brands struggle to stand out from the crowd
- The consumer
- Similar levels of ownership of PMI and health cash plans
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- Figure 5: Health insurance product ownership, August 2017
- A quarter of PMI holders have made a claim in the last two years
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- Figure 6: Private medical insurance-related activities, August 2017
- 63% of PMI holders say they understand exactly what’s covered
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- Figure 7: Attitudes and experiences of the insureds, August 2017
- Only 6% of non-policyholders say they can afford health insurance
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- Figure 8: Perceptions of affordability, August 2017
- Key high frequency services draw strongest limited cover interest
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- Figure 9: Interest in limited cover policies, August 2017
- Almost a third of the non-insured would avoid NHS wait through private self-pay
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- Figure 10: Approaches to self-pay treatment, August 2017
- GP service quality tops list of NHS priorities
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- Figure 11: NHS services under scrutiny: quality or access, August 2017
- Sentiment towards the NHS has worsened over the past year
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- Figure 12: NHS services under scrutiny: five-year outlook, August 2016-August 2017
- What we think
Issues and Insights
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- Older Millennials have big potential as a target market
- The facts
- The implications
- GP 2.0: the battle to perfect primary care
- The facts
- The implications
- Impact of mental health conditions could increase interest in cover
- The facts
- The implications
The Market – What You Need to Know
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- The economic environment offers little support to PMI sales
- Gross earned premiums are expected to inch upwards over the next five years
- Corporate coverage expands while personal coverage shrinks
- Claims costs are shaped by ongoing innovation
- Increasing IPT has added to price inflation woes
Market Size and Forecast
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- The number of people covered by PMI has continued to expand …
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- Figure 13: Number of PMI subscribers and people covered, 2011-16
- … and gross earned premiums have grown steadily
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- Figure 14: PMI gross earned premiums, 2011-16
- Gross earned premiums will inch upwards over the next five years
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- Figure 15: Forecast of PMI gross earned premiums, at current prices – Fan chart, 2012-22
- Figure 16: Market size and forecast for PMI gross earned premiums, at current and constant prices, 2012-22
- Forecast methodology
Market Segmentation
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- Corporate premiums are propping up the market …
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- Figure 17: Gross earned premiums, by segment, 2011-16
- … and corporate coverage expands while personal coverage shrinks
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- Figure 18: Number of people covered and number of subscribers, by segment, 2011-16
- Average premium rises have proved prohibitive
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- Figure 19: Average PMI premium, by segment, 2006-16
Market Drivers
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- Flat disposable income limits propensity to spend on PMI
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- Figure 20: GDP per head and real household disposable income per head, seasonally adjusted, Q2 2013-Q1 2017
- Falling unemployment supports the market
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- Figure 21: UK unemployment rate, aged 16 and over, seasonally adjusted, January 2012-May 2017
- Government spending on health dwarfs private spending …
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- Figure 22: Current healthcare expenditure, by source, 2013-15
- … but the government plans to slow growth in spending
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- Figure 23: Department of Health budget, real terms, 2017/18 prices, 2009/10-2020/21
- Demand for NHS diagnostic services tells through waiting times
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- Figure 24: Total number of NHS England patients waiting for diagnostic tests, January 2012-July 2017
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- Figure 25: Number of 6+ and 10+ week waits for diagnostic tests, NHS England patients, January 2012-July 2017
- Research finds 15-25% year-on-year rises in number of self-pay patients
Claims Performance
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- Claims costs are shaped by ongoing innovation
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- Figure 26: PMI claims amount incurred and claims ratio, by sector, 2011-16
Regulatory and Legislative Changes
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- IPT increases have contributed to price pains …
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- Figure 27: Insurance Premium Tax (IPT) rates, September 2017
- … and increased the appeal of healthcare trusts for employers
- CMA demands quality information from seven hospitals
- Concerns about impact of ‘shopping around’ rules
- ABI launches Health Insurance Guide
Companies and Brands – What You Need to Know
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- Bupa takes the top spot by customer share
- Medical technology, GP access, and mental health are key strategies
- Bupa retains adspend top spot
- Newer brands struggle to stand out from the crowd
Market Share
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- Bupa takes the top spot by customer share
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- Figure 28: Private healthcare insurance provider, April 2017
Competitive Strategies
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- Tackling mental health
- Bupa launches guide for line managers supporting staff
- AXA PPP makes BioBeats stress management app available to customers
- Providers target improved GP access
- National Friendly launches private GP access plan
- Doctaly offers private GP appointment from £39.99
- Insurers invest in latest medical technology
- Aviva invests in medical diagnostics company
- AXA PPP teams up with non-profit ukactive for fit-tech accelerator
Advertising and Marketing Activity
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- Bupa retains adspend top spot
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- Figure 29: Above-the line, online display and direct mail advertising expenditure on private healthcare insurance, by advertiser, 2015-17*
- TV advertising drops off in 2017
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- Figure 30: Above-the line, online display and direct mail advertising expenditure on private healthcare insurance, by media type, 2017
- Figure 31: Above-the line, online display and direct mail advertising expenditure on private healthcare insurance, by media type, 2015-2017*
- Search and social advertising is highly competitive
- Nielsen Ad Intel coverage
Brand Research
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- Brand map
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- Figure 32: Attitudes towards and usage of selected brands, August 2017
- Key brand metrics
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- Figure 33: Key metrics for selected brands, August 2017
- Brand attitudes: AXA and Aviva rely on brand presence in other insurance markets
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- Figure 34: Attitudes, by brand, August 2017
- Brand personality: VitalityHealth stands out as fun and vibrant
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- Figure 35: Brand personality – Macro image, August 2017
- Bupa’s brand stands alone in private healthcare
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- Figure 36: Brand personality – Micro image, August 2017
- Brand analysis
- Bupa’s brand is synonymous with British private healthcare
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- Figure 37: User profile of Bupa, August 2017
- Simplyhealth struggles to stand out from the crowd
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- Figure 38: User profile of Simplyhealth, August 2017
- AXA relies on key traits earned from other general insurance markets
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- Figure 39: User profile of AXA, August 2017
- Aviva thrives on reputation for trust and fairness
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- Figure 40: User profile of Aviva, August 2017
- VitalityHealth solidifies brand recognition following 2014 rebrand
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- Figure 41: User profile of brand, August 2017
The Consumer – What You Need to Know
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- Similar levels of ownership of PMI and health cash plans
- A quarter of PMI holders have made a claim in the last two years
- 64% of PMI holders are confident in the services provided
- Only 6% of non-policyholders say they can afford health insurance
- Key high frequency services draw strongest limited cover interest
- Almost a third of the non-insured would avoid NHS wait through private self-pay
- GP service quality tops list of NHS priorities
- Sentiment towards the NHS has worsened over the past year
Health Insurance Product Ownership
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- Similar levels of ownership for PMI and health cash plans
- Fewer than one in 10 have a condition- or treatment-specific policy
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- Figure 42: Health insurance product ownership, August 2017
- PMI is more likely to be arranged through an employer than other products
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- Figure 43: Health insurance product ownership, by arrangement method, August 2017
PMI-related Activities
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- A quarter of PMI holders have made a claim in the last two years
- PMI holders are more likely to have expanded cover in the last two years
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- Figure 44: Private medical insurance-related activities, August 2017
- Men far more likely to have increased cover than women
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- Figure 45: Private medical insurance-related activities, August 2017
- Older customers tend to be less engaged
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- Figure 46: Private medical insurance-related activities, August 2017
- Rewards help improve engagement with PMI products
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- Figure 47: Private medical insurance-related activities, by reward recipients, August 2017
Attitudes and Experiences of PMI Holders
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- 63% of PMI holders say they understand exactly what’s covered …
- … and 64% are confident in the services provided
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- Figure 48: Attitudes and experiences of the insureds, August 2017
- Virtual GP services begin to gather momentum
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- Figure 49: Experiences with virtual GPs, August 2017
- Older people more likely to say they understand the extent of their cover
- Virtual GPs are reaching almost half of 16-44s
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- Figure 50: Attitudes and experiences of the insureds, August 2017
Perceptions of Affordability
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- Only 6% of non-policyholders say they can afford health insurance
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- Figure 51: Perceptions of affordability, August 2017
- Older Millennials could be open to taking out PMI
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- Figure 52: Perceptions of affordability, by generation, August 2017
Interest in Limited Cover Policies
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- Key high frequency services draw strongest consideration
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- Figure 53: Interest in limited cover policies, August 2017
- Older Millennials show potential for limited or modular policies
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- Figure 54: Interest in limited cover policies, by generation, August 2017
- 14% would consider three or more limited cover policies
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- Figure 55: Number of limited policies considered, August 2017
- Figure 56: Interest in limited cover policies, by number of limited policies considered, August 2017
- Access to GP services and hospital admission could tempt cost-conscious
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- Figure 57: Interest in limited cover policies, by perceptions of affordability, August 2017
Approaches to Self-pay Treatment
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- Almost a third of non-insured would avoid NHS wait through private self-pay
- Some favour cure over prevention
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- Figure 58: Approaches to self-pay treatment, August 2017
- 35-44s most likely to self-pay to avoid the waiting list
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- Figure 59: Approaches to self-pay treatment, by age, August 2017
- Almost half of potential PMI customers say they would self-pay
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- Figure 60: Approaches to self-pay treatment, by perceptions of affordability, August 2017
NHS Services under Scrutiny: Quality or Access?
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- GP service quality tops list of NHS priorities
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- Figure 61: NHS services under scrutiny: quality or access, August 2017
- Existing PMI holders prioritise access
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- Figure 62: NHS services under scrutiny: quality or access, by health insurance product ownership, August 2017
- A mix of access and quality factors remains important as people age
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- Figure 63: NHS services under scrutiny: quality or access, by generation, August 2017
NHS Services under Scrutiny: Five-year Outlook
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- Sentiment towards the NHS has worsened over the past year
- Responding to the stresses and strains
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- Figure 64: NHS services under scrutiny: five-year outlook, August 2016-August 2017
- Baby Boomers most likely to have poor outlook for the NHS
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- Figure 65: NHS services under scrutiny: five-year outlook, August 2017
- PMI holders far more confident about NHS prospects than non-holders
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- Figure 66: NHS services under scrutiny: five-year outlook, by health insurance product ownership, August 2017
- Non-holders who could afford PMI are more likely to feel positive about the NHS
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- Figure 67: NHS services under scrutiny: five-year outlook, by perceptions of affordability, August 2017
Appendix – Data Sources, Abbreviations and Supporting Information
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- Abbreviations
- Consumer research methodology
Appendix – Market Size and Forecast
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- Total market forecast – Best- and worst-case scenarios
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- Figure 68: Forecast of PMI gross earned premiums, at current and constant prices, 2017-22
- Corporate sector forecast
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- Figure 69: Forecast of corporate PMI gross earned premiums – Fan chart, 2012-22
- Figure 70: Forecast of corporate PMI premiums – Best- and worst-case scenarios, at current prices, 2017-22
- Personal sector forecast
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- Figure 71: Forecast of personal PMI gross earned premiums – Fan chart, 2012-22
- Figure 72: Forecast of personal PMI premiums – Best- and worst-case scenarios, at current prices, 2017-22
- Forecast methodology
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