A new Defaqto report into the cost of private medical insurance reveals PruHealth’s approach can result in premiums that are up to 44 per cent cheaper than competitors in the first year.
Independent researchers Defaqto analysed the premiums charged by five of the UK’s leading PMI providers – PruHealth, AXA PPP, Norwich Union, Bupa and Standard Life – and found first-year premiums can vary by as much as £500 a year.
Defaqto’s Health Insurance Premiums research compared premium quotes from PruHealth, AXA PP, Bupa, Standard Life and Norwich Union in September 2006.
The report was commissioned for PruHealth to mark its two-year anniversary and to get an independent view on how its approach to pricing was working in practice.
It found that a woman in her twenties who actively manages her health could save up to £315 per year with PruHealth with monthly payments of just £42.45. This is compared to premiums for equivalent products of £68.76 with AXA PPP, £62.36 with Standard Life, £55.54 with Norwich Union and £52.92 with Bupa.
Shaun Matisonn, chief executive of PruHealth says: “PruHealth offers a healthy lifestyle discount of up to 30 per cent off the first year’s premium for new members. Beyond year one, PruHealth has a reward system called Vitality, which allows its members to earn points for looking after their health. This means that the most active policyholders could get up to 100 per cent of their year one premium back towards year two if they don’t claim. This system is unique to PruHealth in the UK.This ‘prevention rather than cure’ method is proven to help people change their lifestyles for the better – as well as providing them with the peace of mind of a traditional health insurance policy should they need it.”
The research also found premiums for a 35 year-old with diabetes who managed their condition varied from £97.25 a month with AXA PPP to just £53.82 with PruHealth.
Since PruHealth’s launch in October 2004, its innovative approach has helped encourage more people to take advantage of private medical insurance. 70,000 members have joined PruHealth over the past two years. 32 per cent of the personal customers are new to the PMI market and 50 per cent have never paid for PMI themselves before.
How do PruHealth Vitality points work?
PruHealth members can earn points via a wide range of health improving measures such as regular gym visits, improving health and wellbeing knowledge, going for health screenings, stopping smoking and having a flu jab
Even taking brisk walks and downloading healthy meal planners from the PruHealth website can lead to lower premiums
The more Vitality points you earn, the greater Vitality status you can achieve from Bronze (25 per cent discount) right through to Platinum (100 per cent discount)
Shaun Matisonn, Chief Executive of PruHealth says: “While PMI premiums have been rising for a number of years, PruHealth’s Vitality rewards scheme means you can actively bring down the cost of your PMI year on year, just by looking after your health. With car and home insurance, if you don’t make a claim, you’re rewarded with a discount – health insurance should be the same. With PruHealth, if you don’t claim, your second year’s premium will automatically be reduced by 25 per cent of your year one premium. On top of that, the Vitality rewards scheme means that even bigger reductions are achievable – increasing that percentage up to 100 per cent – for people who take active steps to improve their health.”
Case study 1
Mary Leigh is a 63-year-old PruHealth policyholder, living in London. Mary joined the scheme in December 2004 and in August 2005 accrued enough Vitality points to become a Platinum member. Since then, by reaching Platinum status and not claiming, she has brought her monthly premiums down from £135 per month to £16 per month. In addition, she has opted to increase her excess (the amount she would be responsible for paying if she made a claim), to make her cover even cheaper at just under £50 for the entire year.
Case Study 2
Nicola Buckley is 26 years old and is just entering her third year of membership. Nicola originally decided to join up with PruHealth as an individual member because with the discounted gym membership of £25 per month, she could pay less for health insurance plus gym membership than she had previously been paying for gym membership alone. In her second year, the company she worked for joined PruHealth and because she had reached Gold Vitality status, when she came to renew for her third year, she was eligible for £200 cash back under the corporate scheme.
PruHealth aims to give people a much better deal on their PMI, and even from day one policyholders can take advantage of a wide range of valuable offers such as subsidised gym membership and discounts on health screenings. For example, existing PruHealth members can benefit from Holmes Place and Cannons gym membership from as little as £25 per month.
Matisonn ads: “If you’re already paying for health club membership, or are thinking of joining, you could be paying as much as £80 or more for the membership alone. By becoming a PruHealth policyholder, the discount you’ll receive on your gym fee can mean you’re getting fully comprehensive PMI cover, plus your gym membership. Improving your Vitality status is achievable for everyone. Simply leading a sensible lifestyle and taking steps to improve your wellbeing such as downloading healthy recipes from the website and doing more physical activity can translate into some very substantial savings.”
Private medical insurance : News update: October 2006