Private health insurance on the up

Despite the downturn in the economy, private medical insurance (PMI) continues to show resilience and signs of rude health.

Andrew Tripp, chief executive of Perfect Health and chairman of the Association of Medical Insurance Intermediaries, said The health insurance sector is fairly recession proof. It stood up well to the recession in the early 1990s and, although there have been some losses, it’s been pretty resilient this time too. Employees really value their health related benefits, which makes it difficult to take them away.

There are some concerns that the strength of the sector may be coming to an end. Figures from a new report by Laing and Buisson have revealed that there was a 4.7 per cent drop in the number of corporate medical policies, across both insurance and trusts, in 2009.

However, much of this drop can be explained as due to companies downsizing or going bust, and not medical insurance being withdrawn. Retention rates are being maintained at most private health insurers, and lapses are only really occurring at small companies who aren’t able to afford the insurance costs.

Employers are also looking for ways to lower the charges on healthcare as a cost-cutting exercise in these lean times. One means to achieve this has been in raising excesses and removing dependants from the cover, while some companies have put a cap on claims.