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New Zealand-born PruHealth chief
executive Catherine McGrath says Antipodeans can often get away with
being more direct in business than British people and that can be

Since moving to the UK eight years ago, McGrath has used this
directness and her business acumen to make her way up the ranks of
financial services to the point where now, as head of the newest
private medical insurance provider, she says she can do something
truly innovative on a national scale.

McGrath did not leave New Zealand until she was in her 20s when she
moved to Glasgow in 1996 after three years at the Bank of New Zealand
where she developed and implemented a new superannuation product and
managed the bank’s mortgage products.

In Glasgow, she led a investment management project for the National
Australia Bank before being recruited by Yorkshire Bank to develop a
new direct customer proposition and established a new business unit.

After leading NAB’s Vivid financial services business, she joined ITV
Digital in 2001 to bring a more commercial focus to marketing and key
strategic projects. This was a considerable success with the firm
seeing a 25 per cent increase in the average revenue per customer
under her leadership but it was not enough to keep the flailing
company afloat.

After 18 months at the Pru, the opportunity to head the new PMI
provider – a joint venture from the Pru and South African provider
Discovery – was the chance to launch something very different in the

The PruHealth proposition is the first time that the UK public have
been offered private medical insurance where policyholders can reduce
their premiums by taking measures to improve their own health, such
as giving up smoking, going to the gym or receiving regular health

The idea has proved itself in the US and South Africa where the
concept was conceived and IFAs are finding it an attractive product
for clients.

PruHealth has seen double the volume of business it expected since
the October launch. Intermediaries who have embraced the concept are
finding it a useful tool to talk about with prospective clients. “It
is an exciting proposition that IFAs like talking about with their
clients,” says McGrath.

At the launch of the product, some newspaper articles claimed the
deal was a gimmick to lure consumers away from traditional providers
but McGrath says once intermediaries see the product pricing is
competitive and there is a genuine ability for policyholders to
decrease their premiums significantly year on year, it speaks for

She claims that PruHealth is at the forefront of a change in PMI
product design. She believes the industry in the UK has been
producing uninspired products that do not appeal to consumers. “Most
PMI providers are simply buying the services of private hospitals
with the perception that all they need to do is beat NHS waiting
lists and this is a big problem. It is a stagnant way of thinking
that hampers innovation.”

McGrath is concerned that the big players are operating on the basis
that the NHS provides a poor service and she believes that this means
in the long term that they will find it difficult to compete with
innovative products. “I would be surprised if there were not
attempts by other providers to try and replicate what we are

But she says PruHealth has a secret weapon that will keep imitators
at bay. By teaming up with South African provider Discovery, Pru
Health has at its fingertips seven million life years of data which
it uses to analyse behaviour, structure pricing and design services
that will meet consumer’s needs. “This gives us insight into claims,
health and behaviour that other companies will not be able to touch.”

The individual product has been well received, with policyholders
ranging from 18 years old to the mid-60s. PruHealth’s corporate
business is all done through IFAs and McGrath says the firm is
working on a corporate product. “If people think that the product we
launched this year will be the only innovation we make, they are very
much mistaken.”

The company launched with partnerships with fitness clubs Holmes
Place and Cannons as well as GPs, specialists, consultants and
hospitals and a deal has just been signed with a quit smoking
organisation and agreements are being discussed with a weight-loss
organisation and a range of health spas. “The intention is to make
our PMI offering comprehensive and holistic by teaming up with
innovative partners from a wide spectrum of related industries.”

McGrath has a history of innovative thinking, not just in financial
services. When she was at ITV Digital, part of McGrath’s remit was to
tackle piracy, hunting down access card pirates. Company technicians
would send focused interruption signals across the airwaves aimed at
disrupting punters who were accessing the network illegally.

She discovered illegal access to ITV Digital was usually at its peak
during premier league football matches and established that this was
the best time to send through the signals.

Such measures may not be required in the running of a PMI provider
but McGrath’s belief in the new product means that she will do
everything she can to bring people’s attention to the PruHealth
offering. “We believe in it so why pull any punches?”Born: 1971,
Wellington, New Zealand.

Lives: LondonEducation: LLB/BComm, University of Canterbury, New
ZealandCareer: 1990-91: Law clerk, Murray Crossman and Partners,
Tauranga, New Zealand; 1991-92: Law clerk, Cooney Lees and Morgan,
Tauranga, New Zealand; 1993-96: Bank of New Zealand, Wellington,
mortgages and personal lending analyst, product manager and segment
manager; Aug-Dec 1996: Project manager, National Australia Life,
Glasgow; 1996-98 Retail design programme project manager and direct
operations senior manager, Yorkshire Bank; 1998-2000: Head of
mono-line retailing for Europe, National Australia Group; 2000-2001:
Chief operating officer, Vivid (NAB direct financial services
business); 2001-2002: Director of product development and customer
value management, ITV Digital; 2003-present: chief executive
PruHealthCareer ambition: Get PruHealth to the point where it is a
significant player in the marketplaceLife ambition: Keep happyLikes:
Sailing, people, travelDislikes: Unfairness, mushrooms, dark wintersDrives: BMW M3 convertible


Independent view

Young people are leaving the industry, disillusioned by the constant barrage from the media and the FSA.

What exactly is product innovation?

By Fiona Tait, Pensions Specialist Ros Altmann reportedly hoped for more product innovation following pension freedom¹ and, according to one poll, 66 per cent of advisers also believe that providers should be doing more². This article considers whether there is a real client need for new products, or whether we should be focusing our attention on efficient delivery […]


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