Chief executive outlines his vision to Health Insurance, with a message for like-minded brokers
Brokers who see Vitality as "some discounts added to PMI" have failed to understand PruHealth’s proposition, according to the insurer’s chief executive.
In an interview with Health Insurance yesterday, Neville Koopowitz said that he wanted PruHealth to operate in the private medical insurance (PMI) and wellness field, not solely in the former.
Speaking following the launch of additional Vitality benefits yesterday, Koopowitz argued that wellness was the key to shaking up a market in need of reform.
"If people just see it as some discounts added to PMI then quite frankly they don’t get it," he said. "And to be provocative, if people just want to sell plain PMI then maybe PruHealth is not the place for them. We are offering an integrated new generation product. That does a whole lot of things, not just giving you great PMI cover but creating value add. It’s important to keep young and healthy people in the mix.
"The market needs a shake-up. This issue of purely just marketing or selling on cost and churning the market, that is not the space we want to be in. We want to make a meaningful difference to people’s lives and with Vitality we can do that.”
Behavioural economics
Since its launch in 2004, PruHealth has focused on rewarding its members for engaging in healthy behaviours, arguing that this will both benefit members and result in cost savings through lower claims.
Although Vitality has been welcomed as truly innovative by brokers, some have suggested that it has failed to deliver on its early promise.
Although PruHealth has published studies showing that members engaged with the programme are less likely to claim, these have, to date, focused on members in South Africa. Although Koopowitz acknowledged that Vitality had a "quite dramatic" impact on claims in the United States and South Africa, where insurance covers chronic conditions and primary care, he said there were "a lot of similarities" with the UK.
"We started something in 2004 and the market has certainly tried to follow but I am hoping that this latest launch puts us into a different stratosphere in terms of the power of behavioural economics," he said.
Yesterday's presentation launching the new benefits available through the programme explained that to gain the most from it, members will need to engage in healthy behaviour over the course of several years.
Old reasons for PMI purchase 'no longer relevant'
During the launch yesterday, PruHealth sales director Dave Priestley warned brokers that the marketing of PMI needed to change, given the fact that dramatic improvements in the NHS have undermined the old reasons for purchase such as long waiting times.
Although Koopowitz believes that NHS reforms will "create some stimulus" for the PMI market, he agreed with Priestley that it would be dangerous to rely on this for growth.