The first conference organised by Health Insurance magazine provided plenty of food for thought for its mix of insurer and intermediary delegates.
Beyond the Welfare State – New Opportunities
which was sponsored by PPP healthcare, was recently held at the Commonwealth Conference Centre in Kensington, London, and chaired by Health Insurance’s
technical editor, Andy Couchman.
The keynote speaker was Professor Alan Maynard, professor of health economics at York University.
He is known as having controversial views and at the conference did not pull any punches. He said there while there was an urgent need for cost control – welfare costs the taxpayer some £140 billion a year – but there was “antipathy and apathy” towards the private sector from the Labour government.
And “Dobbo”, as health secretary Frank Dobson was irreverently referred to, has not, according to Maynard, produced the right strategy to strengthen the NHS. Maynard held out little hope of a working partnership with the private sector. “Dobson doesn’t like insurers and does not want collaboration at any level,” he said.
He claimed the government had got it wrong in its attempts to control costs by attempting to cut waiting lists. He said this would merely add to the problem, by leading to more patient referrals to the creaking NHS. The answer, stressed Maynard, was to control doctors.
“If you give GPs more money they will merely refer more patients which will in turn generate longer waiting lists,” he said.
From the point of view of the private sector, Maynard said the key to controlling escalating premiums was to tackle consultants’ costs.
The picture he painted was a frank one, and far from rosy, although it was not bad news since he indicated there were opportunities in the private sector, although he said these were “fragmented”.
It was then on to conference chairman Andy Couchman who revealed the results of an exclusive survey carried out by Health Insurance
magazine. The main findings of this are shown in the table overleaf and clearly provided some interesting topics for debate.
Peter le Beau of Swiss Re Life & Health took to the rostrum next, speaking on the opportunities for insurers. While these may have been slow to materialise, the rising cost of welfare will undoubtedly lead to more business.
Le Beau explained the reasons behind the critical illness sales success story, pointing out they were an obvious sale with mortgages and their relative simplicity made them attractive to many buyers. This was in contrast to income protection – critical illness outsells this product by four to one. He said tax incentives might be the only way to kick-start the income protection market, which he said was too expensive for many, although he praised UNUM for attempting to move into the blue collar market with its Essential Ability plan.
He too did not mince his words. Le Beau commented that there had been high hopes for social security minister Frank Field to “think the unthinkable” as far as welfare reform was concerned, but that in the end his conclusions “were too unthinkable for the government’s taste”.
He added the government’s principal concern was to be re-elected, and so was doing little more than offering “catchy soundbites” on welfare reform. It was all pretty sobering, although le Beau did stress that simple and more flexible product design and and a new approach to selection could make all the difference for many providers.
Provider PPP healthcare addressed delegates next and was represented by its consultant, Dudley Lusted. His brief was to discuss the opportunties in the corporate market, which is widely seen as having much potential. “Intermediaries need to learn how to sell and not how to switch,” were among his opening words and would have ruffled a few feathers in the audience.
Lusted’s talk was partly linked to PPP’s product Back to Health, which is aimed at tackling absenteeism. The premium for this is a low £ 110 a year, although there are restrictions on claiming and each claim needs to be on the recommendation of the employee’s occupational health physician.
He added there was scope for the corporate PMI market to double in the next four years and that this product was among the most forward-looking in the market. Even so, he commented at present there was minimal new business and the market was flat.
Regulation was next on the agenda with the subject tackled by Ron Wheatcroft, chairman of the Investment and Life Assurance Group. He explained the key issues affecting the market were polarisation, the OFT report and the Ombudsman scheme.
Finally an open forum was held to look at the opportunities for intermediaries. The previous speakers were joined by John Humphrey of healthcare consultants Sedgwick Noble Lowndes and Graham Fidoe of Morton Wilson, a specialist in long term care.
When questions from the audience were allowed, Dudley Lusted raised eyebrows when he claimed cash plans were “all but irrelevant” when compared to the benefits of PMI cover. This clearly rankled some of the cash plan providers who were in the audience.
Indeed, Jill Davies, of Westfield, which supplies cash plans, commented these were the ideal way “to help people get back to work short term”.
Paul Cowman of Guardian Financial Services raised the issue of income protection and asked why it was still seen as a “Cinderella” product. Certainly several IFAs said they were seeing rising sales, including Diane Saunders of Leeds.
After lunch it was on to a choice of workshops, which kept delegates working hard until the close of play. And, judging by the feedback, those at this year’s conference had all spent an informative and enjoyable event.
The full results of the Health Insurance
Conference Survey will be published next month.