Employer-paid PMI policies decline by 14,000

There were 3.94 million private medical insurance (PMI) policies at the start of 2015, compared to 3.97 million a year earlier, according to a study by market intelligence firm LaingBuisson.

PMI plan

Its Health cover UK market report also found that employer-paid PMI policies fell by around 14,000 over 2014.

The research also found:

  • The number of employer-paid health cash plan contributors increased by 12% in 2014 to reach a high of 833,000 at the start of 2015.
  • The number of medical cover policies from 2012 to 2014, inclusive, was 9% below the peak of 4.32 million at the start of 2008.
  • 11% of the UK population had private medical cover at the start of 2015, compared to 12% at the start of 2009.
  • Medical cover payouts decreased by 0.8% in real terms to £3.45 billion.
  • Individual demand for health cash plans continued to decline in 2014, falling by 2.4% to 1.81 million individual paid contributors at the start of 2015, which is the smallest annual fall in seven years.

Philip Blackburn, economist at LaingBuisson and author of the report, said: “Private medical cover is currently at a crossroads. A lack of growth in volume demand when the UK economic cycle is at a strong point, suggests there are barriers to a wider market, which need to be addressed.

“While tackling high costs of cover needs to be an ongoing priority for everyone within the private healthcare industry, demonstrating the financial benefit of private healthcare to employers would appear imperative for long-term market prosperity.

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“To this end, investment in the value of private healthcare is required from insurers, hospitals and doctors alike. However, while the medical cover market has recently seen some progressive achievements on cost management, a regressive step has now been delivered by the government.

“Private medical insurance needs a 3.5 percentage point rise in IPT like a hole in the head, and this additional cost is projected to dampen market demand in 2016 and 2017.”