In March Bupa launched a panel of independent financial advisers (IFAs) to encourage intermediary feedback on its products, service and marketing, and lobby the government and special interest groups on long-term care (LTC) issues.
“The LTC market is not growing at the rate people thought it would,” says Brian Bartley, the head of operations at Bupa Health Assurance. “We want to show IFAs why they should be talking about this area, with the aim of raising public awareness and growing the marketplace.”
The panel incorporates a referral service, putting patients requiring care in touch with up to three experienced LTC advisers. Panel membership has now risen to more than 140, with a target of around 200.
“We also run training courses, introductory sessions for intermediaries interested in moving into the market, and master-classes looking at regulatory, financial planning and taxation issues for advisers with more LTC experience.”
Bupa offers both prefunded LTC through its FutureCare plan, and what Bartley calls postfunded, or immediate-needs, LTC through ImmediateCare.
FutureCare offers two options – Choice and Security. Choice allows clients to decide, when making a claim, how they would like their benefits to be paid. Security offers help and support through the Bupa care advisory service when a claim is made.
Uncertainty over the future of state funding for healthcare has hit sales of prefunded plans across the market. “There are still misconceptions about the extent to which the state will fund people in LTC. Hopefully, our panel will help tackle this. But lack of public awareness means more than half our sales are of postfunded care, where the market is growing much faster,” says Bartley.
The immediate-needs market is rate driven and the level of income secured in return for the single premium is the key factor.
“You are always in competition with three or four different companies to offer the best rate,” he says. “Underwriters may view the likely life expectancy of potential clients differently and there can be significant variations. But our experience in the LTC market, and health insurance generally, gives us an edge when making an assessment of risk and setting rates.”
Sue Askham, the director of Health Care Funding in Sheffield and a Bupa LTC advisory board member, applauds Bupa for being “very enthusiastic about LTC and very committed”.
She says Bupa has been proactive, working hard to listen to the demands of IFAs and their clients. “A lot of insurance companies just dream up what they think people want. Bupa has at least tried to find out what the market really requires,” she says.
Bupa’s activity has paid off in increased awareness among the profession of what it has to offer. A couple of years ago its profile was low but intermediaries say this has changed.
Panel member Peter Fisher, a partner at the Nursing Home Fees Agency, says Bupa previously hamstrung itself by failing to decide if it wanted to sell LTC through IFAs or direct. “It has undergone a sea change of late,” he says.
Setting up its panel indicates that Bupa is now aiming to be more responsive towards intermediaries. Of course, by passing on leads it hopes it will benefit by receiving reciprocal business from IFAs.
This is starting to happen. For example, Askham regularly uses the insurer’s immediate-needs package. “I am looking for the most competitive premiums, and if Bupa offers that – as it sometimes does – I will use it,” she says.
But in its desire to boost business, Fisher warns that Bupa must not set criteria for panel membership at too low a level. “It could be casting its net too wide in encouraging IFAs who do not have the necessary skills to cope with this highly complex area. LTC financial planning involves a host of issues, including inheritance tax, government regulations, local authority funding, health and social security benefits. A few short training courses cannot give intermediaries the necessary in-depth understanding.”
But Fisher tempers his warning with praise for the insurer. “I don’t want to knock Bupa for doing this,” he says. “I can’t think of any other insurer that is helping IFAs promote their business and generate enquiries in such a way.”
Fisher thinks Bupa’s policies are good but “not state-of-the-art”. “They are not earth-shatteringly different or better than others in the market,” he says. “Its premium rates are rarely the cheapest, and sometimes the most expensive for both prefunded and immediate-needs LTC. But it is recognising the inadequacies in its premium rates and looking to improve, particularly in immediate needs.”