Association of med cal Insurance Intermediaries (AMII) chairman Bill Poynton has predicted “a consumer crisis” equivalent to the endowments misselling scandal if private medical insurance (PMI) is sold over the internet.
His comments have provoked anger among medical expenses insurers, many of which have invested heavily in this new distribution channel.
Poynton feels PMI is too complex for people to buy without independent advice, and believes sites should be information-based rather than incorporating online sales.
WPA chief executive Julian Stainton, whose company has embraced e-commerce with its XS Health website, said he was surprised to hear such views. An advocate of technology, Stainton said the new economy is here to stay and the industry should align its thinking with current trends.
Bupa’s new Heartbeat product will also be available over the internet in response to customer demand for more flexibility and choice. Company spokesperson Adam Lewis said the advantage of online selling is that customers can peruse product details at their leisure. He added that customers can telephone or e-mail Bupa staff throughout the process to guide them through online purchasing.
But recent statistics suggest Poynton may not be as out of touch as providers seem keen to suggest. Swiss Re Life & Health’s Insurance Report 2000 reveals only nine per cent of people said they would be “fairly or very likely” to buy health insurance online.
Stainton said: “We take care to ensure online customers are properly informed about what they are buying. I don’t see the difference between online sales and selling over the phone or through the post.”
Specialist PMI intermediary, and AMII member, Stephen Walker said: “One of the major problems, not just with medical insurance, but with financial services, is misbuying rather than misselling – which is an important difference.
“People are price-driven and often don’t take the time to understand what they’re buying, and I foresee similar problems with online sales.”
Poynton said: “If things go down the online sales route, I think we could well have a consumer crisis on our hands, similar to the recent endowment problems.”