ABC Renewal Pricing
A fair, intuitive and transparent pricing model.Vitality's ABC pricing is based on 3 simple measures:
- Base Rate
- Claims and Engagement
ABC pricing has been designed to offer VitalityHealth members fair, intuitive and transparent renewal pricing. ABC Pricing will give your clients more clarity on how their renewal premium is calculated, and allows them to control their increase – simply by taking steps to improve their health.
ABC Pricing explained
How is my client's premium calculated?
The increase in a member's renewal premium will be the sum of these three items: A+B+C.
As it is more likely your clients will need to claim as they get older, their premium will rise each year to take account of this. This increase varies but is typically around 3%.
Base Rate Increase
This is the change in the cost of providing healthcare, taking into account the charges made by hospitals and other providers, as well as advances in areas such as medical technology and drugs. This can vary according to where the client lives and their level of cover.
Claims and Engagement
An adjustment for the claims your clients have made, and their Vitality status. This is the part of the renewal price that they can control with ABC Pricing.
Case Study: Meet Helen
Helen took out a Personal Healthcare plan with VitalityHealth. After the first 10 months, Helen's renewal premium for the following year is calculated.
Her age increase is 3% and her base rate increase is 6%. Helen has made a small claim for which Vitality pay £200 and has achieved Gold Vitality status, so there is no increase or discount applied.
In total, Helen’s premium increase is: 3% (A) + 6% (B) + 0% (C) = 9%
Claims and Engagement
|1 Adult on the plan
|No claims paid
|Less than £300 paid
|£300 - 1,000 paid
|More than £1,000 Paid
|2 or more Adults on the plan
|No claims paid
|Less than £450 paid
|£450 - 1,500 paid
|More than £1,500 paid
ABC Pricing: Key Benefits
Giving your clients more control
Your client can mitigate any renewal increase through engaging with the Vitality Programme and improving their status. Your clients therefore have greater control over their premium, beyond simply needing to avoid claiming..
Increases capped for claimers
ABC limits claims-related increases, ‘C’, to a maximum cap each year which protects your clients from high levels of premium increases. The cap remains significantly lower than many other no-claims discount increases.
Simple and intuitive to calculate
The Age and Base rate increase are clearly communicated to your client, alongside a premium adjustment based on your client’s Claims and health engagement linked to a transparently published table.
Takes amount claimed into account
Rather than simply looking at whether or not a claim has been made, ABC takes the size of the claim into account. Small and mid-sized claims therefore have significantly less impact on premiums than a large claim.
We answer some common misconceptions
No-claim discounts mean I can easilycalculate my expected annual increase
No-claim discounts can be very misleading and make it difficult to calculate renewal premiums. For example, a drop from a 65% no-claim discount to a 60% no-claim discount would cause a 14% increase in premium, not a 5% increase in premium as some clients would expect. ABC pricing helps to avoid this by showing clients upfront the exact increase they will see for claiming.
ABC pricing penalises sick claimers who would otherwise reach the bottom of the no-claim discounts scale
Very few members would actually ‘benefit’ from reaching the bottom of their no-claim discounts scale. In reality, to get to this point members would experience much greater premium increases and would likely suffer frequently from poor health.
With large claims, ABC pricing could result in significant premium increases, which I have to tell my clients about
No-claim discounts often produce lower rises and lower premiums
The effect of ABC Pricing over time is a smooth, consistently competitive, progression of premiums. In contrast, disproportionately few members benefit under a no-claim discounts structure which often leaves sick members who claim being punished.
Where to next?
All our plans start with Core Cover; giving your clients peace of mind with fast access to the highest quality private healthcare.
Your clients can tailor their plans by adding additional Cover Options, such as Out-patient Cover, Therapies Cover and more.
Full Cover Promise
Unlike with some other insurers, our Full Cover Promise means your clients won't be left out of pocket when they claim.
Video consultations with a private GP, a 24/7 medical helpline, private prescriptions and more for your clients.