There was little doubt that both insurers and intermediaries at the inaugural Health Insurance Leadership Debate expect the tough conditions in the private medical insurance (PMI) market to continue in the short term, at least.
Providers across the market have announced falls in membership numbers over recent months and CIGNA HealthCare’s Louise Dolley conceded that all insurers are finding conditions challenging.
“We are anticipating a reduction in lives, not due to lapsing schemes but due to redundancies and reorganisations across businesses,” Dolley said.
However, Dolley and her fellow participants at the table agreed it is difficult to generalise as different sectors of the market are performing better than others.
“It really does depend on the sector as to whether you are seeing growth or decline at the moment,” she went on. “In some sectors we are seeing joint ventures, growth and improving performance, but with some of them – the finance sector for example – the redundancies are there. We are seeing a large increase in continuation options.”
Simplyhealth’s Jack Briggs said the PMI industry does have to be “worried” about membership shrinkage. However, for a brokerage whose remuneration is based on a percentage of rates there is “no doubt” that if rates go up because the claims experience is poor then they might think the situation is in fact “reasonably rosy”.
Representing the Association of Medical Insurance Intermediaries (AMII), the organisation’s chairman Mike Izzard said some insurers are indeed suffering “a little bit more” on shrinkage on SME schemes – and probably corporate schemes as well – than brokers are.
“Maybe brokers’ businesses will be more affected next year but certainly from what I glean from AMII members then yes, there is slight shrinkage on certain schemes but a very miniscule drop-off or lapses of schemes,” he said, adding that there is some evidence of new schemes appearing in the market.
Simplyhealth’s Briggs conceded that insurers across the market are seeing some shrinkage in SME and large corporate schemes but noted that there are some areas of growth.
“We are seeing many companies who are telling you that we want to take three people off the scheme and we are not replacing them,” he said. “But equally we are seeing three are coming off and four are going on. It is quite complex because some parts of the market are actually doing reasonably well.”
According to Briggs, taking a snapshot of the state of the PMI market is difficult because some observers do so by membership, while income might be a more accurate indicator.
“It is interesting that if your measurements of success are based on income only then will you perhaps have a different view of the health of your business,” he said. “Membership drives income but whenever one of my guys comes in and says they have just won a scheme, I do have to admit that I used to tend to say ‘who is it and how much is it worth?’ rather than ‘how many members are in it?’.”
Tal Gilbert of PruHealth, meanwhile, said that the recession is a threat for some but it also presents an opportunity for others.