Table of Contents
- Issues in the Market
- Key issues
- Abbreviations
- Market in Brief
- The PMI market has picked up since 2006...
- Figure 1: Gross earned premiums (GEPs) for PMI, by sector, 2002-07
- ...with Bupa dominating, and smaller providers suffering
- Figure 2: PMI provider rankings, by subscription income, 2005-07
- Worries about the NHS continue to drive the market...
- ...but pricing pressure remains
- Two main competing products
- The corporate sector is heavily intermediated
- Figure 3: Proportional distribution of PMI sales, by channel, 2005-07
- Almost a fifth of consumers have PMI
- Figure 4: Ownership of PMI and other related healthcare/protection
products, June 2008
- Internal Market Environment
- Key points
- The role of the NHS...indirectly promoting PMI
- Figure 5: Top ten reasons given by PMI holders for taking out cover, 2007
- Public spending on the NHS has increased significantly...
- Figure 6: Total public spending on the NHS, 2002/03-2010/11
- ...with waiting times having come down as a result
- Figure 7: Inpatient and outpatient waiting times (England), 2005-08
- NHS health screening plans may also benefit the PMI industry...
- ...as might the government' s plans for polyclinics
- The amount paid out on PMI claims has increased...
- Figure 8: Claim amounts incurred and claims as a proportion of gross
earned premiums (GEPs), 2002-07
- ...whilst premiums have only modestly increased
- Figure 9: Average PMI premiums, by sector, 2002-07
- External Market Environment
- Key points
- Greater personal wealth makes individual PMI more affordable...
- Figure 10: Total personal disposable income (PDI) and consumer
expenditure, 2003-12
- ...but tighter economic conditions may force people to cut back
- Higher profits make corporate PMI more affordable
- Figure 11: Gross operating surplus and balance of net primary incomes of
private non-financial corporations, 2000-06
- PMI is a highly prized employee benefit...
- Figure 12: Top ten company benefits received and most highly valued by
employees, February 2008
- ...and is the most common health benefit offered by employers
- Don' t forget the smaller businesses...there' s a lot out there
- Figure 13: Number of private sector enterprises, employees and turnover
-- UK, start 2006
- Cancer incidence has increased...
- Figure 14: Age-standardised cancer incidence and mortality rates, all
cancers (excluding non-melanoma skin cancer), Great Britain, 1975-2005
- ...whilst smoking prevalence has declined
- Figure 15: Prevalence of cigarette smoking, by gender, 1974-2006
- Obesity is on the rise...
- Figure 16: Number of obese men and women -- England, 2003 and 2010
- ...whilst alcohol consumption has fallen
- Figure 17: Weekly alcohol consumption level: percentage of people
exceeding specified amounts, by age and gender, 1988-2006
- Competitive Context
- Key points
- There are a range of healthcare funding options available
- Figure 18: The main methods of obtaining healthcare treatment in the UK,
2007
- Healthcare trust schemes have grown in popularity...
- Figure 19: Number of subscribers and people covered by healthcare trust
schemes, 2002-07
- ...although healthcare cash plans are more of a threat
- Figure 20: Number of healthcare cash plan subscribers, people covered
and contribution income earned, 2002-06
- Strengths and Weaknesses in the Market
- Strengths
- Lack of public faith in the NHS
- Innovation in the market attracting younger customers
- More affordable with modest increases in premiums
- Strong and established brands
- Weaknesses
- NHS improvements in waiting lists and treatments available
- Economic concerns curtail both consumer and business spending
- Lack of adviser interest in the personal sector
- Tax disincentives for both companies and individuals
- Market Size and Forecast
- Key points
- PMI is the most commonly held type of health insurance
- Figure 21: Ownership of PMI and other related health/protection
products, June 2008
- The PMI market has picked up since 2005
- Figure 22: Number of subscribers and people covered by PMI, by sector,
2002-07
- Gross earned premiums have also steadily increased
- Figure 23: Gross earned premiums (GEPs) for PMI, by sector, 2002-07
- Growth in virgin business remains crucial
- Market forecast
- The harmony of personal and public provision?
- Long-term growth is expected in the personal sector...
- Figure 24: Forecast for the personal PMI market, 2003-13
- ...with slightly lower growth anticipated in the corporate sector
- Figure 25: Forecast for the corporate PMI market, 2003-13
- Average premiums are expected to decline in the personal sector
- Figure 26: Average annual premiums for PMI, Index, 2003-13
- Factors used in the forecast
- Personal market
- Corporate market
- Market Share
- Key points
- Bupa retains its very comfortable number one spot...
- Figure 27: PMI provider rankings, by subscription income, 2005-07
- ...whilst smaller providers are quickly loosing ground
- Figure 28: Illustration of PMI providers' market shares, 2006 and 2007
- A number of third-party administrators
- Companies and Products
- Two key types of underwriting...
- ...and the matter of price versus policy coverage
- Bupa
- AXA PPP healthcare
- Norwich Union Healthcare
- Standard Life Healthcare
- CIGNA HealthCare
- WPA
- Simplyhealth Group
- PruHealth
- Brand Communication and Promotion
- Key points
- PMI accounts for a small proportion of financial services adspend...
- Figure 29: Top ten categories of financial services advertising
expenditure (sorted on 2007 data), 2004-07
- ...but it is the third-biggest category within general insurance
- Figure 30: Top ten categories of general insurance advertising
expenditure (sorted on 2007 data), 2004-07
- PruHealth has launched an aggressive advertising campaign
- Figure 31: Top 20 PMI advertisres, by expenditure (sorted on 2007 data),
2004-07
- TV and direct mail are the most popular forms of PMI advertising
- Figure 32: PMI advertising expenditure, by media type, 2004-07
- Channels to Market
- Key points
- Sales of corporate PMI are heavily intermediated
- Figure 43: Proportional distribution of PMI sales, by channel, 2005-07
- The growing role of the internet...
- ...and of course, the retailers
- The Consumer: Product Ownership and Attitudes towards Healthcare
- Key points
- Almost two in ten consumers are covered by PMI
- Figure 44: Ownership of PMI and other related healthcare/protection
products, June 2008
- Over half of PMI holders are covered by their employer
- Figure 45: Ownership of PMI, by type of policy, June 2008
- PMI is the domain of the middle age groups...
- Figure 46: Ownership of PMI and other related health/protection
products, by gender, age, socio-economic group, lifestage, newspaper
readership and gross annual household income, June 2008
- ...and also of the more affluent
- Superbugs are a major cause of concern...
- Figure 47: Attitudes towards public and private healthcare, June 2008
- ...yet many are reluctant to pay for healthcare
- Intermediaries have a role to play
- Policy exclusions and medical disclosure are off-putting
- Older consumers are most concerned about superbugs
- Figure 48: Agreement with selected statements regarding public and
private healthcare, by gender, age, socio-economic group, marital status and
gross annual household income, June 2008
- Wealthy consumers are more open to private healthcare...
- Figure 49: Positive sentiment towards private healthcare, by
socio-economic group, June 2008
- ...with DEs and young adults being the most apathetic
- Married couples are also worth targeting
- Healthcare protection product owners have greater NHS concerns
- Figure 50: Attitudes towards healthcare, by ownership of health-related
protection products, June 2008
- Paid-for in taxes NHS treatment remains a barrier to some
- The Consumer: Further Analysis
- Key points:
- Consumer mindset groups identified
- Potential PMI Targets
- And/or, respondents that have any of the following opinions about private
healthcare:
- Happy Policyholders
- PMI Rejecters
- PMI Sceptics
- NHS Critics
- Happy Policyholders are likely to be high-income ABs
- Figure 57: Profiles of various consumer mindset groups, by gender, age,
socio-economic group, gross annual household income, household tenure, TV
region, and age/socio-economic group, June 2008
- Young Potential PMI Targets look for wider coverage...
- Figure 58: Key reasons for choosing PMI among potential PMI targets, by
gender, age, socio-economic group, marital status and lifestage, June 2008
- ...as do price-insensitive ABs...
- ...whilst third agers want cover for pre-existing conditions
- How much do NHS concerns influence PMI uptake?
- Figure 59: NHS concerns, by consumer mindset groups, June 2008
- PMI holders tend to be more concerned with the NHS
- Figure 60: PMI/cash plan ownership, by levels of concern in the NHS, June
2008
- CHAID analysis
- What is CHAID analysis?
- CHAID analysis confirms ABs are the key target group for PMI
- Figure 61: CHAID analysis on the PMI market, June 2008
- Appendix -- The Consumer: Product Ownership and Attitudes towards
Healthcare
- Figure 62: Ownership of PMI and other related healthcare/protection
products, by gender, age, socio-economic group, marital status, lifestage,
presence of children, Mintel' s Special Groups, working status, household
income, tenure, region, ACORN category, media usage, supermarket usage,
household size, car ownership, detailed lifestage groups, age/socio-economic
group and terminal education level, June 2008
- Figure 63: Attitudes towards public and private healthcare, by gender,
age, socio-economic group, marital status, lifestage, presence of children,
Mintel' s Special Groups, working status, household income, tenure, region,
ACORN category, media usage, supermarket usage, household size, car
ownership, detailed lifestage groups, age/socio-economic group and terminal
education level, June 2008, (Table 1 of 2)
- Figure 64: Attitudes towards public and private healthcare, by gender,
age, socio-economic group, marital status, lifestage, presence of children,
Mintel' s Special Groups, working status, household income, tenure, region,
ACORN category, media usage, supermarket usage, household size, car
ownership, detailed lifestage groups, age/socio-economic group and terminal
education level, June 2008, (Table 2 of 2)
- Appendix -- The Consumer: Further Analysis
- Figure 69: Profiles of various consumer mindset groups, by gender, age,
socio-economic group, marital status, lifestage, presence of children,
Mintel' s Special Groups, working status, household income, tenure, region,
ACORN category, media usage, household size, car ownership, detailed
lifestage groups, age/socio-economic group and terminal education level,
June 2008
- Figure 70: Appealing characteristics of PMI for Potential PMI Targets,
by gender, age, socio-economic group, marital status, lifestage, presence of
children, Mintel' s Special Groups, working status, household income, tenure,
region, ACORN category, media usage, household size, car ownership, detailed
lifestage groups, age/socio-economic group and terminal education level,
June 2008, (Table 1 of 2)
- Figure 71: Appealing characteristics of PMI for Potential PMI Targets,
by gender, age, socio-economic group, marital status, lifestage, presence of
children, Mintel' s Special Groups, working status, household income, tenure,
region, ACORN category, media usage, household size, car ownership, detailed
lifestage groups, age/socio-economic group and terminal education level,
June 2008, (Table 2 of 2)
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