Competition in the individual/consumer private medical insurance (PMI) sector is intensifying, with a number of new product launches and market entrants joining the fray.
PruHealth has set down a clear gauntlet to market leaders Bupa and AXA PPP healthcare, which have been gaining an even stronger price foothold in the highly competitive consumer market over recent months. Meanwhile, Health Insurance understands that Standard Life Healthcare is also planning a renewed assault on the individual space, while AIG Direct has already entered back into the sector after withdrawing from it in 2006.
PruHealth said its new plan – called Select – is aimed at consumers on a budget who are looking for a “high-quality product with mid-range benefits at an affordable price”. The plan has a standard annual excess of £250 and, according to PruHealth, will be better suited to those individuals who are less interested in gym membership, one of the key features of PruHealth’s proposition. Select offers more cover than the PruHealth Essential plan at a lower cost, but gym membership will be charged at the Bronze rate regardless of Vitality status.
Standard Life Healthcare, meanwhile, plans to launch Personal Healthcare in “early summer”, according to its head of product, Ronjit Bose.
Built on the same technology and platform as Business Healthcare and Corporate Healthcare, the SME and large corporate propositions launched in 2007 and 2008 respectively, Personal Healthcare is the “final piece of the jigsaw” for the provider, Bose told Health Insurance exclusively.
Personal Healthcare will offer the same no claims discounts and hospital range that Standard Life Healthcare currently offers in the individual market, as well as the “Guided Option” facility which gives a 15% discount for choosing to go down the managed care route.
Bose told Health Insurance: “Personal Healthcare is about finding the right balance between need and cost, about having the ability to offer flexible cover that manages to hit the sweet spot.”
Bose denied that by offering almost limitless flexibility, intermediaries and their clients might be overwhelmed. They will be encouraged to use “starting points” of cover which they will be able to either flex up or down, depending on customer need and budget.
The re-emergence of AIG Direct into the individual PMI market will also give intermediaries another option to discuss with their clients. Its product, called HealthChoice, gives customers a cash sum if they require certain medical procedures. With HealthChoice, customers are able to either use the money to pay for treatment at a discounted rate at BMI Healthcare hospitals or use it to pay for treatment elsewhere. If they choose to be treated in the NHS, they can keep the money themselves. AIG Direct has an agreement in place with Healix Health Services, which helps customers to source treatment, both in and out of the NHS.
A spokesman for AIG Direct confirmed that the insurer pulled a previous individual PMI product called Healthnow in 2006, but said the provider was committed to the UK healthcare market and is also looking to launch into the over 70s market later in the year. It is also planning to launch HealthChoice into the SME market in 2009, after piloting it with intermediaries Jelf Employee Benefits and Premier Choice Group. It is thought that it will be available to schemes of up to 50 members and employers will be given the choice of keeping any money allotted for approved treatment or giving it to the individual employee.
But it is in the individual market where the insurers seem to be focusing on the moment, with anecdotal evidence suggesting that they are looking to fill some of the expected drop in corporate premium income with individual business.
Martyn Field, sales and marketing manager at PatientChoice, another insurer, said that he has witnessed an increase in enquiry levels in the individual market, as consumers look for the most competitive deals.
According to Field, there has been no price increase for four to five years on PatientChoice’s Hospital Treatment Plan – unless a client goes through an age band the premiums has remained the same since it was taken out. Also, there are “no plans” to increase premiums in 2009 on its Access product, which offers cover for outpatient consultations and diagnostics.
Other insurers that have come on to the scene with innovative offerings in recent months include HealthFund and National Friendly, which has also rebranded.
Specialist intermediaries welcomed the competiveness in the market, although some expressed concern that without intermediated advice consumers could lose out.
Lionel Barnett of Essex-based Fidelity Health Choice said: “The effect of the credit crunch or ‘credit restraint mechanism’ on PMI is that there is an opportunity for brokers/intermediaries to assist their clients in maintaining or selecting policy benefits at lower cost, and this is good for business provided that clients are not medically disadvantaged.”