02 Apr 2020
Posted in Insurance
Private medical insurance policies to suffer declines in the UK following COVID-19
Private medical insurance (PMI) in the UK is set to suffer declines as private hospitals reached a deal with the NHS to provide beds, ventilators, staff and space amid the coronavirus (COVID-19) pandemic, according to GlobalData, a leading data and analytics company.
GlobalData’s UK Insurance Consumer Survey reveals that in 2019, 28.8% of respondents were concerned about the service provided by the NHS or waiting times for procedures. These were the main reasons why consumers were driven to purchase PMI, and this is a substantial increase on the 13.8% of respondents in 2018.
Yasha Kuruvilla, Insurance Analyst at GlobalData, comments: “PMI policyholders would have thought they would bypass the NHS and go straight into private care if they catch COVID-19. However, following the reallocation of resources, customers will no longer be able to access private hospitals, and will default to using NHS services.”
Policyholders may consider cancelling their cover, especially as they seek to ease their financial burden during a time of economic uncertainty and reduced job security. Consequently, insurers should be proactive about contacting customers before they see sudden increases in cancellations, as they can still provide assistance.
Kuruvilla continues: “These policies can still provide meaningful value to the customer as they can offer additional resources such as access to digital GP services and mental health counselling – the latter may see an increase in demand, given the current restraints on daily life.”
Some insurers have already reacted, as Bupa and Vitality are offering a cash benefit to policyholders for days spent in hospital with coronavirus.
Kuruvilla concludes: “Insurers could highlight that if customers do cancel policies they will have to go through the underwriting process again in the future and could face hikes if their health deteriorates. However, insurers should first look as what values they can offer to customers before taking that approach in these testing times.”