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PMI premiums set to rise as NHS private spend soars

PruHealth is warning that private medical insurance premiums will increase sharply over the next five years as the NHS increasingly farms out procedures to private hospitals.

Sales director Dave Priestley says 15 per cent of the NHS’s procedures will be carried out in the private sector by 2010, making it the biggest spender on private hospitals and weakening the bargaining power that private insurers have with private hospitals.

Private insurers spend around £1.2bn a year with hospitals but the NHS spending with private hospitals will reach around £3bn in five years. Priestley says this will drive up the cost of healthcare for insurers which will be fed back to the consumer in the form of higher premiums.

He says: “Traditionally, big health insurers have relied on their ability to negotiate with private hospitals to control their health premiums. Once they lose this, insurers will have to introduce strategies to improve premiums such as offering incentives to customers to improve their lifestyle.”

Bupa commercial director Stephen Flanagan says: “I am interested that PruHealth, which is relatively new to the market, says this. We are certainly not losing our negotiating powers. In fact, we put some work out to tender this year which has driven our costs down, benefiting consumers.”


Pos Sol announces Partnership and PBO schemes

Positive Solutions has launched two schemes to recruit and reward partners and build profits leading up to a possible stock market flotation in 2010.The partnership scheme will pay out a pot of at least £80m to be shared between qualifying Positive Solutions partners if Pos Sol reaches a value of £600m or more by 2010. […]

House prices on the up again, says Nationwide

House prices increased by 1.3 per cent in September, bringing the annual rate to 8.2 per cent, according to Nationwide.It says strong demand from landlords has helped support the marketNationwide group economist Fionnuala Earley says: “Just like the weather, the housing market was unseasonably warm in September as August’s interest rate hike did nothing to […]

Regulation set to boost Sipp sales

More than eight out of 10 of advisers believe the introduction of Sipp regulation next April will make the market more attractive. A survey by Skandia, which interviewed 465 advisers, found that 83 per cent expect the onset of regulation to bring a boost to the self-invested personal pension market. Skandia also asked advisers what […]

Change slows for mature market

The buy-to-let market is unlikely to see any significant future innovation because it is mature and has already undergone its metamorphosis.Brokers and lenders agree that the market remains buoyant and is not desperate for any new types of products or major changes.It is also doubtful if many new lenders will enter the sector as it […]


MPAA consultation

By Fiona Tait, pensions specialist The chancellor’s announcement of proposed cuts to the Money Purchase Annual Allowance means it will be more important than ever to be able to tell your PCLS from your UFPLS What was in the statement? Not much. The chancellor spared three sentences to inform us that the Money Purchase Annual Allowance will be reduced […]


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