According to LaingBuisson, the UK private medical cover market is estimated to be worth £4.83 billion with 4.02 million policies covering 6.9 million lives in 2016, meaning that the market flatlined compared with 2015.
In 2015, the private medical cover market grew well as two large corporates extended medical cover to their entire populations. Although there was marginal growth of 0.6% in corporate market policies, this was not repeated in 2016. Meanwhile individual paid policyholders declined by over 2%, a similar fall to the previous three years. This is set against strong demand for private healthcare from self-payers, which is currently growing at around 10% per year.
Two leading reasons for the market’s lack of growth have been highlighted:
- There is greater political and economic uncertainty due to Brexit, and the magnitude of how it will change corporate Britain is still unknown. It also seems unlikely that there will be the kind of growth witnessed in the corporate market in 2015, until companies are more confident about the climate in which they will be operating post-Brexit.
- The market is affected by the sharp increase in Insurance Premium Tax (IPT). The additional costs this has imposed means it is more challenging to achieve new sales and retnetion, and the full impact of this tax rise may take some time to entirely filter through to price sensitive customers.
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