I can’t foresee that we would ever have a purely corporate market in the future. In the current financial climate, I can’t envisage the group market having a massive spurt of growth either. It may just stagnate – if we are lucky – for the next few years.
I think one reason for the drop in sales in the individual market is due to the fact that many more people who buy medical insurance now qualify for small one-man group schemes under policies such as AXA PPP’s Business Choice. In the past these one-man bands would have been forced down the individual route, as there were not the options available to have a group scheme of this size.
There is no doubt about it that individual PMI is becoming increasingly unaffordable and while no claims discount schemes have swamped the market to try and keep increases down for those who do not claim, this method is not helping to keep costs at an affordable level, making it extremely expensive for those who do need to claim.
There will, however, always be people who will be forced down the individual route, particularly group leavers needing that continuity of cover to protect their medical history. There are also a lot of insured individuals who just fear giving up their PMI, based on their superstition that they will suddenly fall ill should they give up their cover. I sympathise – I feel exactly the same about giving up the National Lottery!
Schemes such as PruHealth have added extra value for the premiums paid. This has also attracted new buyers into the market given the gym and other Vitality incentives and I can see this continuing in the foreseeable future for the right customer.
In the current climate, there will be a growing number of people looking to dramatically reduce costs and considering coming out of the market altogether. I believe this is where schemes such as National Deposit and PatientChoice will come into their own and will help us all continue to gain new individual customers and help retention.