Review of the Year: Health Insurance: Return to health

Health screen

Health insurance personalities reflect on the past year and look forward to 2014, with high hopes for improving customer service and numbers as well as seeing an end to the EHIC scandal.

Arguably the biggest health insurance story in 2013 was that Spanish hospitals were refusing to treat patients presenting with a European Health Insurance Card. The issue is far from resolved, and 2014 will hopefully see the publication of the European Commission investigation into the matter.

For private health insurers, the economic downturn continued to plague results, with Bupa reporting decreases in both revenue and customer numbers. Meanwhile, a Competition Commission report blamed a lack of competition in the private healthcare market for inflating consumer premiums. The findings were welcomed by the Association of British Insurers and Bupa.

Post’s annual review of the health insurance sector gathered reflections from market players Bupa, Axa PPP, Simply Health, Pru Health and Jelf Employee Benefits to reflect on 2013 and the challenges and expectations that lie ahead next year.

What was the most important development concerning your business in 2013?
tony-woodBupa Health funding sales director Tony Wood: The Competition Commission’s provisional findings into the private healthcare market were good news for patients and for private healthcare.

paul-moultonAxa PPP healthcare intermediary distribution director Paul Moulton: The introduction of Axa PPP’s ‘The Healthcare Pathway’. It is a complete and sustainable approach for larger-sized employers to improve the health of their employees.

mike-waggSimply Health intermediary sales head Mike Wagg: Des Benjamin retired as Simply Health chief executive after 13 years. Romana Abdin, who has been part of Simply Health since 2001, has taken over, and is now taking all Simply Health has achieved forward.

david-priestleyPru Health sales director David Priestley: Pru Health launched its new lifestyle health insurance, which is designed to address the fact that healthcare needs are changing and that there is a growing need for preventative measures as well as treatment for sickness.

iain-lawsJelf Employee Benefits UK healthcare director Iain Laws: Jelf Employee Benefits receiving an award of 3* (Outstanding) Rating for Investors In Customers.

health-ins-48What was the biggest market disappointment in health insurance in 2013?
Wagg: The disappointment of a contracting market has been well-documented in recent years, but we now have renewed optimism in our marketplace, with the private medical insurance group sector returning to growth after several years of decline. We have also seen a continued increase in corporate cash plan customers.

The fact that providers are continuing to do things the same way, despite a declining market. Industries evolve, consumers change and companies adapt. However, the PMI sector continues to stand still and focus narrowly on sickness provision for acute treatment.

What was the most significant achievement for your business in 2013?

Wood: We have continued to develop new ways of delivering excellent care to our members. Some examples of this include that we now have seven specialist support teams for different condition areas, collectively taking more than 18 000 calls per week. We also introduced an online knee clinic, and launched a
quality-assured breast cancer network.

Continuing profitable growth. Axa PPP healthcare has continued to strengthen its UK service and products through propositions to individual members, such as an enhanced heart and cancer commitment, support to new parents through a midwife and nurse callback service and a new second opinion service.

The launch of two new private medical insurance products, Simply Employee Health and Simply Personal Health, were a key development for our intermediaries and customers alike.

We started the year by launching our free movie benefit. It was met with a cynical reaction from some corners of the market, as they didn’t understand what free movies had to do with health. The answer is ‘everything’, as it demonstrates how you can change behaviour by offering the right motivation.

How would you sum up 2013 in a tweet (140 characters)?

Wood: An exciting time for the market. Here’s to a happy, healthy 2014!

Wagg: A year of optimism in the economy, with Simply Health’s private medical insurance offering and with growth in the corporate cash plan market.

Priestley: Traditional PMI addresses the health issues of yesterday but lifestyle health insurance is the way ahead #innovationandvalue

Laws: Tough trading which brought out the best in our business and the worst of the industry.

What are your main targets and goals for 2014?
Wood: We are looking forward to the Competition Commission’s final report in 2014. We hope that the commission will take forward its bold proposals to drive better quality and value for money.

To continue to innovate in order to improve our products and services.

With increased demand for our products, it’s essential we continue to listen to our customers and develop our suite of healthcare solutions accordingly.

Through our new lifestyle health insurance proposition we will help our members understand their health, make it easier and cheaper for them to be healthy, motivate them with intelligent incentives and rewards, and provide access to the best clinical care at the point of need.

health-ins-9Who would you choose as the health insurance personality of 2013, and why?
Wood: Damien Marmion, managing director of Bupa Health Funding, for tirelessly leading the charge for better value
private healthcare.

Sadly 2013 saw the passing of Mike Izzard, a former chairman of AMII, a hugely respected figure [who was] passionate about our industry and a good friend to me personally – and to Simply Health.

Jessica Ennis-Hill, who has helped us to raise the profile of lifestyle health insurance and promote the benefits of healthy living, as well as inspiring the nation with her own sporting achievements.

If Santa was to bring you one present this year, what would it be?

Wood: A return to growth for the market, and a million new customers. But he might struggle to fit them all on his sleigh.

Moulton: Acceleration of the economic recovery.

Wagg: A gadget to remove middle-lane drivers from the motorway.

Will the recovering economy continue to impact health insurers’ policyholder numbers and revenues in 2014?
Moulton: We believe it will continue to have a positive effect on the market.

Any optimism returning to the economy is a good thing for all sectors. We all want to grow our customer base, but that doesn’t just rely on a strong economy; it relies on us responding to the needs of our customers, clients and intermediaries.

We have already seen the market stabilise, with the previous trend of a falling market not only halting but growing marginally. I’m sure I’m not the only one who would like to see this trend continue. There’s no reason that with the right product offerings we won’t see a gradual recovery in demand for PMI.

health-ins-101Will a lack of confidence in the NHS continue to benefit health insurers in 2014?

Moulton: People’s perceptions of NHS performance have long been linked to the uptake of private medical insurance. Therefore, a lack of confidence in the NHS may be of benefit to health insurers as consumers, employers and intermediaries appreciate the advantages that private healthcare can bring.

We have always complemented the NHS and worked alongside it. There are challenges for both the NHS and private providers; the key is finding ways of working together to overcome them.

The NHS continues to suffer from cost constraints, balanced against stringent targets for delivery of care, which are likely to provide opportunities and a further trigger for growth in the PMI market.

The public continues to have confidence in the NHS but is increasingly recognising that it struggles to meet all of its needs and expectations.

Any New Year resolutions for your business or the health insurance sector?

Wood: We are going to start offering commission again for consumer business. We are very excited that intermediaries will be able to sell our flagship individual product, Bupa By You, for the first time.

Moulton: To continue to listen to customers and employers in order to ensure that we continue to meet their needs through innovative, high quality products and services.

Wagg: We’re continuing to see the green shoots of recovery, so we want to ensure we work collaboratively with intermediaries and clients to take advantage of the renewed optimism in the market.

Priestley: To redouble our efforts to make people healthier and help our members to live life well.

Laws: Continue to reinforce the value of private healthcare to employers and to redouble efforts to find appealing and sustainable products.



Health insurance timeline 2013

31 January: Giles Healthcare appointed Jelf senior corporate account manager Lisa Blackwell as senior healthcare consultant

4 February: Private medical insurer specialist intermediaries Chase Templeton Group secured investment from Palatine Private Equity as part of its acquisitions strategy

20 February: Health Shield set out its five-year vision for growth as part of a strategy to provide affordable healthcare support to the widest possible community

27 February: An organisation representing independent midwives was revealed to be in discussions with a broker ahead of the launch of legislation requiring all healthcare professionals to have professional indemnity cover

21 March: Medical insurance intermediary Chase Templeton recruited disability broker Fish Insurance managing director Warren Dickson as its new chief executive

18 April: The Private Health Partnership appointed sales director Andrew Middleton and group finance director Judith Warr to its board of directors

25 April: The Collinson Group announced its acquisition of Aria Assistance, saying its plan to buy the business stretched back as far as Aria’s management buyout from Europ Assistance in 2012

14 May: Simply Health announced HR and corporate affairs director Romana Abdin would take over from Des Benjamin as chief executive on July 1

30 May: The European Commission demanded information from Spain over complaints that Spanish hospitals were refusing to honour the European Health Insurance Card scheme

5 June: Spanish authorities hit back at accusations that public hospitals were refusing to accept holidaymakers’ EHICs, amid suggestions medical institutions in Cyprus, Greece and Portugal were following suit

8 July: Mike Izzard, chief executive of healthcare intermediary Premier Choice Group and former president of the Association of Medical Insurance Intermediaries, passed away

17 July: Independent midwives were given the green light to set their own adequacy for a captive insurance solution, ahead of mandatory legislation requiring them to have professional indemnity cover

7 August: Bupa revealed its UK insurance customer numbers dropped by 2.8% and revenues decreased in the first half of 2013

7 August: David Free-Pearce joined Simply Health as key account manager for its corporate account team

15 August: Private medical insurers vowed to take advantage of declining confidence in the NHS by extending cover, offering higher payouts and providing more innovation

28 August: The Competition Commission slammed costs paid for PMI, blaming a lack of competition for inflating the costs for consumers. The Association of British Insurers agreed the sector needed greater transparency

16 September: ABI figures showed the cost of medical treatments under private health insurance and accident policies accounted for £9.5m per day

23 September: The UK Independence Party called for migrants from outside the EU to be required to provide evidence of medical insurance before entering the UK in order to curb health tourism

2 October: Health insurance comparison website Best Medical Cover was banned from using a web-based advert by the Advertising Standards Agency after the site was found to be misrepresenting a report into hospital mortality rates and appealing to fear to sell policies

2 October: Allianz Worldwide Care has launched a service to allow UK members to directly book an initial appointment with a consultant without a GP referral
1 November: Simply Health made customer service director Mark Day and IT director Ian Maude redundant in a restructure designed to show more customer focus

12 November: Bupa signed a deal to remain the official health insurance partner of UK Sport until March 2014

26 November: Aetna acquired Interglobal Group, a private medical insurance provider for groups and individuals in the Middle East, Asia, Africa and Europe

This article was published in the 5 December 2013 issue of Post magazine 

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