How the evolution of PMI is attracting new customers
As PMI continues to evolve and expand, the traditional perception of health insurance is changing and this is attracting new customers, writes Greg Levine, Chief Operations and Growth Officer, Vitality.
As we explore in our latest Health Claims Insights Report, it’s clear that the private medical insurance (PMI) market is going through a period of immense change.
We’ve seen the biggest period of growth in demand for PMI since the mid-‘90s in recent years, with access to healthcare existing as a major motivating factor for people taking out health insurance.
Concerns around NHS waiting lists still appear as the top reason for customers taking out PMI (50%), with 38% seeking GP and primary care support, according to a recent consumer survey conducted by Vitality1.
And the market is not expecting this demand to just disappear, with 93% of advisers believing PMI demand will increase over the next 12 months (not lessen), a live viewer poll during our recent Forward Thinking webinar also told us.
Another major change is the extent to which people are claiming on their PMI. According to the same consumer survey, 73% of health insurance customers report using their plan in the last year1.
We’re seeing this in our own data too. Since 2019, Vitality has seen a 45% increase in members making a claim2. Expectations from customers and the ways they’re using cover have clearly shifted and, as a result, we’re seeing PMI evolve with it.
Perceptions of traditional health insurance are changing
One of the factors driving increased usage of health insurance is growing demand for everyday care services – including virtual GP, physiotherapy and Talking Therapies – which now account for 64% of Vitality health claims2.
Alongside the expanding range of health and wellbeing services within PMI plans, these services are increasingly appealing to a broader base of customers, as individuals look for more support to help them live in better health, alongside access to treatment when they need it.
According to Vitality’s findings, 75% of UK health insurance customers believe insurers should support them to improve their health outside of making a claim1.
As an insurer, this is something we’ve pioneered since day one. Today, there’s far a greater emphasis on prevention and early intervention, offering a more holistic approach to healthcare.
Services like annual health checks, digital cancer screenings or benefits that reward healthy lifestyle choices are no longer a nice-to-have. Not only are they more needed than ever, but they are also ensuring people spot signs and symptoms earlier, helping us to improve longer term outcomes and control claims costs over time.
All this is changing the traditional view of health insurance as a product that primarily appeals to older, more affluent clients, given that new, younger segment of customers are increasingly seeking the benefits of PMI.
Appealing to new segments of customers
When we delve into the survey data of UK customers with PMI that have used their cover in the last 12 months, we see it is highest (86%) among 18 to 34-year-olds1.
As with evidence of wider usage trends, this is once again being driven by the growth in demand for everyday care, with Vitality members under the age of 40 now 40% more likely to claim for everyday care2.
Amongst the services used across all members, access to private GPs unsurprisingly ranks high, with Vitality having seen a six fold increase in GP consultations between 2019 and 20232.
When looking at further research elsewhere, we also see that private GP usage ranks highest amongst 18 to 34-year-olds, steadily decreasing as people get older3.
Claims for Talking Therapies are also much higher in younger members, with women under the age of 40 most likely to use Talking Therapies through their Vitality plan, now accounting for half of all claims2.
When you consider the fact that claims for cancer treatment and in-hospital treatment for musculoskeletal conditions are lower for those under 50, increasing as members get older2, it’s clear that health insurance is now a product that appeals to people of all ages.
With this comes the opportunity for insurers and advisers alike to provide healthcare access to more people, unlock better value for more customers and, perhaps most importantly of all, help people to live in better health for longer in a way that’s more sustainable over the long term.
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1. Vitality and Opinium survey of 1,000 health insurance customers, May 2024
2. Vitality Health Claims Insights Report 2024
3. ‘Going private – What people think of private healthcare in 2023’, Independent Healthcare Providers Network, October 2023.