It was very interesting to hear what LaingBuisson’s latest predications are for the UK private medical insurance market. Their full report has just been made available but attendeeds to this year’s AMII conference in London on the 23rd November we were given a sneak preview.
LaingBuisson’s latest report reiterated that the UK private medical insurance market peaked in 2008 with 4m subscribers. Since that time the market has struggled to grow in any meaningful way.
2015, however, was a positive year for the industry; one that saw a 2.1% increase in self-insured subscribers. The increase was driven by the company market, with the individual sector seeing more downward pressure.
The overall breakdown looked like this:
- Paid-up – 3.4% increase
- Large – 4.7% increase
- SME – 0.7% increase
- Individual – 1.7% decrease
Lapse rates over the last few years have generally been higher than new business indicating plenty of churn. 2015 saw a slight reversal of this trend, however, with new business coming in higher than lapse rates.
Independent Healthcare Sector
The Laing Buisson report noted that London-based hospitals do virtually no NHS work but outside London, 38% of the independent facilities’ business is made up of NHS work. That remarkable statistic isn’t preventing the independent sector in London from growing, however, with a 7.8% CAGR seen from 2006 to 2015.
Future of the Independent Healthcare Sector
The report predicts that NHS funded independent hospitals will see strong growth from 2016 to 2019 but that PMI funded facilities will not enjoy the same experience:
Overall, the challenging environment for the UK PMI sector seems set to continue. Whether the current Government’s tendency towards privatisation will change that is yet to be seen. The effect BREXIT is another unknown factor that may upset the forecasters’ predictions and the increase in insurance premium tax is unlikely to help take up of the cover.
Will the next few years see a changing environment for the UK PMI sector? Quite possibly.