Private Medical Insurance - UK - July 2008

Abstract

Prior to 2006, the individual PMI market had been reliant on the corporate sector to make up for a steady decline in sales. Since 2006, the individual sector has shown signs of recovery, although there is still work to be done to rejuvenate the market. Maintaining affordable premiums and product innovation are key in this respect, with providers like PruHealth making significant progress here. On the other hand, the corporate sector has seen sustained growth for a number of years, largely due to the benefits for both the employee and employer in offering health at work initiatives.

A lack of public faith in the NHS is one of the key driving forces behind consumer uptake in recent years, although significant investment in public healthcare is slowly improving things. However, the challenge still remains convincing people that the benefits of PMI are worth paying for when a free alternative exists, with many are reluctant to do so. Providers have focused on shorter waiting times, access to consultants and treatments and drugs that are not available on the NHS. Budget policies aimed at individuals and the use of no claims discounts and other incentives may also have helped, whilst in the corporate sector, modular policies aimed at SMEs have become quite popular. One of the biggest challenges, however, remains how to deal with the spiralling cost of medical inflation, whilst still attracting virgin business to the market.

This report covers the dynamics of the PMI market, looking at the market forces that are driving the sector and the competing products that are available to consumers. The report looks at the overall size of the market and how it has grown in recent years, alongside the market shares of individual providers and examples of the new innovations they have introduced. This report also contains a section that examines the main brands in the market in detail, before concluding with an analysis of the consumer research commissioned exclusively by Mintel for this report.

Key report themes:

• The steady decline of the individual PMI sector up until 2006.
• The continuing battle against a ' free' state-funded healthcare system.
• The spiralling cost of medical inflation and increasing cost of claims for providers, combined with the pressure to keep premiums down.
• The downturn in the current economic climate is likely to impact sales.
• Cheaper alternatives available to individuals and companies, such as health cash plans and healthcare trust schemes.
• A lack of intermediary involvement in the individual PMI market.