Health Cash Plans - UK - November 2007

Table of Contents

• Issues in the Market
• Key issues examined
• Market definitions
• Abbreviations
• Market in Brief
• A fairly small market, but with much potential
• A number of factors give fresh impetus to the market
• Individual and employee-paid policies represent the bulk of in-force business
• Providers managing claim costs well, given the sharp rise in their volume...
• ...and have successfully diversified into new areas
• One organisation controls nearly half the market
• Most HCPs are sold through direct channels
• The main findings of Mintel' s consumer survey
• Results show a healthy subscriber base
• Dental and optical benefits top the rankings
  • Figure 1: HCP benefits in order of popularity, by HCP subscribers (illustration), July 2007
• Potential to increase HCP penetration fivefold
  • Figure 2: Potential size of the HCP subscriber base (illustration), July 2007
• Broader Market Environment
• Key points
• Slower income growth will drive demand for affordable healthcare
  • Figure 3: Total PDI, consumer expenditure and PDI per capita, at constant 2003 prices, 2003-12
• Implication and opportunity
• Household spend on healthcare rises by a fifth in just three years
  • Figure 4: Household expenditure on healthcare and hospital services, by component, 2005/06
• Implication and opportunity
• Reduced NHS investment post-2008
• The impact of changing lifestyles and working patterns
• Extending patient choice
• Implication and opportunity
• The SME market
  • Figure 5: Number of private sector enterprises, employees and turnover -- UK, start 2006
• Implication and opportunity
• Strong demand for health cover among employees
  • Figure 6: Top ten company benefits and ten most desired, January 2007
• Weighing up the costs
• Implication and opportunity
• Diversifying into new markets: occupational health
• Internal Market Environment
• Key points
• Claims ratio remains within predictable parameters
  • Figure 7: Claim amounts incurred and claims as a proportion of contribution income earned, 2000-06
• Implication
• Dental treatment accounts for the largest proportion of claims
  • Figure 8: Proportional distribution of claims (volume and value), by benefit category, 2005 and 2006
• Fewer visit the dentist post-April 2006
  • Figure 9: Active patient registrations in England and Wales, 2003-06
• All change
• Implication and opportunity
• New NHS price bands
  • Figure 10: Dental charges in England, 2007
• Two thirds of adults wear specs or lenses
• Voucher entitlements
• Millions get their eyes tested each year
• Sight test fees
• Competitive Context
• Key points
• Dental plans appear more popular than cash plans...
  • Figure 11: Penetration of HCPs and related health insurance products, July 2007
• ...with demand boosted by the decline in NHS dentistry
• New affordable PMI poses threat to cash plans
• PMI: a market revived
  • Figure 12: Number of PMI subscribers, people covered and gross earned premiums, 2002-07
• Implication and opportunity (or threat?)
• Healthy demand for OH services is a positive trend
  • Figure 13: Size of the UK market for occupational health provision, 2002-06
• Strengths and Weaknesses
  • Figure 14: HCPs -- SWOT analysis, 2007
• Market Size and Forecast
• Key points
• HCP market at a crucial turning point
  • Figure 15: Number of HCP subscribers, people covered and contribution income earned, 2002-07
• Contributing factors to recent decline
• A fresh approach needed?
• The corporate sector represents a silver lining
  • Figure 16: Proportional distribution of HCP subscriber base, by sector, 2006
• Competitive pressures depress premium inflation
  • Figure 17: Average HCP premium, by sector, 2002-07
• Implication
• Standard scenario predicts steady growth
  • Figure 18: Forecast of HCP subscribers and contribution income earned -- standard scenario, 2007-12
• Note about the forecast
• Positive scenario assumes faster premium growth
  • Figure 19: Forecast of HCP subscribers and contribution income earned -- positive scenario, 2007-12
• Factors incorporated
• Market Share
• Key points
• Contraction in supply
• Not-for-profit organisations dominate the HCP market
  • Figure 20: HCP provider rankings, by contribution income, 2005 and 2006
• Market leader, Simplyhealth controls almost half the market
  • Figure 21: Illustration of HCP providers' market shares, 2005 and 2006
• Companies and Products
• Simplyhealth Group
• Westfield Health
• BHSF
• Medicash
• Brand Communication and Promotion
• Key points
• Total industry adspend stabilises...
  • Figure 22: Total advertising expenditure on HCPs and other health insurance products, 2002/03-2006/07
• ...although many HCP providers cut back on advertising
  • Figure 23: Advertising expenditure by selected HCP providers, 2004/05-2006/07
• Providers prefer to advertise in the press
  • Figure 24: Distribution of advertising expenditure for selected HCP providers, by media type, 2006/07
• HSA' s ' crazy' ad
• Event sponsorship and charitable work
• Channels to Market
• Key points
• Direct sales dominate
  • Figure 25: Proportional distribution of HCP sales, by channel, 2005 and 2006
• Implication and opportunity
• The workplace remains an important marketing channel
• Online advances
• The Consumer -- Product Penetration
• Key points
• Survey background
• Low penetration of health cash plans
  • Figure 26: Ownership of HCPs and other related products, July 2007
• Assessing penetration: a note about the data
• Significant product overlap
  • Figure 27: Ownership of HCPs and other related products -- cross-analysis, July 2007
• Implication
• Are health cash plans losing out to dental plans?
  • Figure 28: Trends in ownership of HCPs and other health products, 2003-07
• Implication and opportunity
• The typical HCP subscriber is aged 35-64
• Implication and opportunity
• CHAID analysis
  • Figure 29: Target groups identified for health insurance products, July 2007
• Implication and opportunity
• The Consumer -- Health Status and Health Needs
• Key points
• HCP subscribers are very health-conscious
  • Figure 30: Health status, by ownership of HCPs and related products, July 2007
  • Figure 31: Health status of HCP subscribers versus total sample (illustration), July 2007
• Over-55s watch their diet
  • Figure 32: Health status, by gender and age, July 2007
• HCP subscribers most likely to use the services of a health professional
  • Figure 33: Health check-ups and other experiences, by ownership of HCPs and related products, July 2007
  • Figure 34: Health check-ups and other experiences, by ownership of HCPs and related products, July 2007
• Implication and opportunity
• Why are men less likely to go to the doctors?
  • Figure 35: Health check-ups and other experiences, by gender, July 2007
• Implication and opportunity
• Two fifths of over-65s have not visited a dentist in the past two years
  • Figure 36: Health check-ups and other experiences, by age, July 2007
• Implication and opportunity
• Londoners least likely to visit a GP or a dentist
  • Figure 37: Health check-ups and other experiences, by region, July 2007
• Implication and opportunity
• Difficulty registering with NHS dentist is a likely catalyst for taking out an HCP or dental plan
  • Figure 38: Proportion of adults who have had difficulty accessing health advice or treatment, by ownership of HCPs and related products, July 2007
• Implication and opportunity
• 25-34-year-olds face problems accessing NHS dental treatment
  • Figure 39: Proportion of adults who have had difficulty accessing health advice or treatment, by gender and age, July 2007
• Londoners are over 50% more likely to say they' ve had problems registering with a GP
  • Figure 40: Proportion of adults who have had difficulty accessing health advice or treatment, by region, July 2007
• Product Penetration -- Detailed Demographics
  • Figure 54: Ownership of HCPs and related products, by gender, age, socio-economic group, marital status, lifestage, Mintel' s Special Groups and working status, July 2007
  • Figure 55: Ownership of HCPs and related products, by tenure, gross annual household income, region and ACORN category, July 2007
  • Figure 56: Ownership of HCPs and related products, by new technology usage, newspaper readership, commercial TV viewing and supermarket usage, July 2007