IFAs focusing on protection to bolster earnings in these tough economic times should embrace PMI as an integral part of that product mix.
Looking at an average IFA’s client base, it makes sense. Many of the six million people covered by PMI fall into familiar demographic groups: high net worth individuals; professional or managerial occupations; self-employed; directors and partners of businesses; and expatriates.
Surprisingly, for a product whose target market so closely matches the IFA’s market, PMI is often overlooked. At best, it’s a tick-box question on a factfind, set aside as the IFA concentrates on other areas of protection and investment. Classified as “general insurance” by many, it is away from their comfort zone of long-term protection and investment.
Some IFAs give limited advice on PMI when the need arises; using product providers familiar from their other activities. However, many specialist PMI insurers get overlooked, as they are not used by IFAs for other products. Consider cash plans, international health cover or dental insurance and the number of providers expands even further. With a complex array of products, unfamiliar providers and new terminology, it is not surprising that for many IFA’s PMI takes a back seat.
However, some larger IFA firms are establishing specialist healthcare departments. Where PMI is embraced within the advice culture of the IFA, health and well-being an integral part of the factfind process, coupled with the right marketing, healthcare becomes a valuable income stream.
For smaller IFAs, without the resources for an in-house PMI specialist, the same synergy can be obtained with a successful strategic alliance or introducers agreement with a like-minded independent healthcare intermediary.
Meet several healthcare intermediaries before choosing one. Ensure they cover the same geographical areas as your clients. Explore their “advice style”. If you already have your own medical insurance, why not ask each to review your own scheme, to see who you are most comfortable with recommending to your clients.
As an association of healthcare intermediaries, AMII supports IFAs in two areas. Membership is open to IFAs with their own specialist PMI department, giving access to update on PMI market developments, training and CPD events, and a valuable forum to network with healthcare intermediaries and insurers.
For IFAs exploring the introducer’s route, AMII can provide details of specialist healthcare intermediary members within your area.
Aiming to reach a wider intermediary audience, AMII is exhibiting at the BIBA conference in Manchester this month (13-15 May). Also, IFAs considering advising on PMI, should attend the AMII Annual Conference at Hinckley, Leicestershire on 17 June. Further details available at www.amii.org.uk
MARTIN MATHEWS – DIRECTOR, ULTIMATE HEALTH LTD
How and when did you start advising on PMI?
I’ve been in the industry 10 years now. Like most people I meet in this industry it was a complete fluke! I answered a job ad not really knowing what it entailed and ended up working for an intermediary and getting full private medical insurance (PMI) training.
Do you advise on individual/corporate – or both?
Being a fairly small but growing intermediary it’s a case of we all muck in and I find myself dealing with both individuals and SMEs, although I would say that 80% of my day to day work is in the SME area.
What time does your day start -what time does it end?
I’m a morning person and live fairly near to our office so I tend to get to the office between 7.30 to 8am. I normally finish by 6pm and once I’m done for the day I’m done! I like to think I’ve got a good work/life balance and although I really enjoy my work I work to live not live to work.
Who/what gets you through the day?
As I say I really enjoy more work so I don’t see at “getting through the day”. As anyone will tell you in this business every day is different and the different people and situations you are dealing with make the day fly by.
Do you work with introducers and, if so, how?
Yes we do. As we specialise in PMI we have some very good relationships with IFAs and general brokers and we also work closely with accountants who feel we can help their clients find savings.
What in your view is the key issue in the PMI market today?
Like most intermediaries I think we need to see a lot more transparency from insurers with regards to loss ratios and claims loadings at renewal. I think insurers which don’t already, need to set out parameters in their rules to clients when they join them with regards to “maximum annual loadings” they could receive, based on claims performance and be open with these details at renewal. The fact that there are times at a clients renewal I have to say to them that “you’ve been given a 15% claims loading and by the way the insurer won’t tell me how much you’ve claimed” can’t be right and gives our industry a bad name.
How much time do you spend seeing clients?
This varies hugely from week to week. Last week I was out three days out of five, but this coming week as things stand I’m in the office every day.
Who in the PMI industry do you most admire and why?
I am still good friends with my old boss Sherry Saidy at Healthcheque. He put a lot of time and energy into training me into the PMI market and I will always be very grateful for that. I would also like to think that the very ethical way he runs his business with the client’s needs always coming first has rubbed of on the way we run Ultimate Health.
What/which PMI product/s do you currently most rate and why?
In the current economic climate everyone wants a bit more for their money and for value for money and extra benefits you can’t beat the PruHealth model. I also think the current Norwich Union Solutions model offers very good value and as an insurer they have made great strides on their administration side in recent years.