Corporate PMI insurance premiums are increasing at a rate of around 6% a year, with costs rising as a result of higher claims by employees, according to a survey.
The Aon Consulting Healthcare 1998 Corporate Health Insurance survey also found a significant drop in confidence in the NHS among corporate PMI clients, with 24% expecting services to deteriorate, compared with 9% in the 1997 survey.
The survey found that out of the 875 companies responding to the survey, only 28% operated an excess.
“We were surprised at how few companies operate an excess,” said Aon Consulting Healthcare sales and marketing manager Steve Desborough. “This reinforces the emotive nature of health insurance benefits. The one area where employers do often impose restrictions is psychiatric benefits, where nearly half impose some restrictions to limit liability to potential large claims.”
Respondents showed a high level of satisfaction with the service of insurers, with 85% saying service was good, very good or excellent. The market is jointly dominated by BUPA, with a 34% market share, and PPP healthcare/ Guardian Health with 35%.
Aon concluded that companies are not extending their healthcare benefits, with only a third of companies saying they cover more than 50% of employees.
“We would not expect provision of healthcare benefits to increase in the current economic climate, whilst healthcare premiums continue to rise above inflation,” said Desborough, who added that he expected to see the markets harden over the next year, leading more employees to take self-insurance options.
“High claims can affect scheme performance. Over 20% of respondents had experienced individual claims in excess of £15,000. This demonstrates the need to consider limiting liability if self-insurance is selected.”