Brakes need to be put on after costs soar 40% over past 10 years
The individual private medical insurance (PMI) market faces huge challenges unless the industry gets to grips with rising costs, according to Mark Noble, health and group risk director at Aviva UK Health.
Speaking at today's Association of Medical Insurance Intermediaries Annual Private Healthcare Summit, Noble (pictured) told delegates that while the corporate PMI market is performing well, he is concerned about the individual market.
He said: "The individual market has shrunk significantly, and unless we get a hold of rising costs I think this will be a huge challenge for us going forward."
Noble pointed out that the cost of PMI has gone up 40% in the past ten years and said that unless the brakes are put on rising prices, it could soon become "unaffordable".
PMI providers are increasingly looking at different ways of keeping costs down in order to make cover affordable for individuals.
While different cost containment strategies apply to the individual, SME and corporate markets, they have included the introduction of hospital networks and so-called 'open referral' options which give insurers greater control over which hospital consultant can treat the individual member.
Noble said today: "I think that hospital networks and open referral is the way the market has got to go. That will be really difficult for some people because it is going to reduce choice, but otherwise costs are going to run away from us."