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Sunny side up

Summer should be filled with sunshine, frivolity and the prospect of holidays but this year the somewhat inclement British weather has been coupled with rising fuel and food prices and talk of a recession and housing market crash.

As the financial services sector battens down the hatches, consumers face the prospect of increasingly tightened purse strings.

While economists and politicians try to work out where it has all gone wrong, one thing is for sure – we need to prepare for the long haul as the economy looks likely to take its time before returning to some level of normality.

This leads to a potentially uncomfortable situation for those of us in financial services and health insurance, in particular. As consumers ourselves, we know what it is like to be faced with rising food prices, so it is not difficult to understand the temptation to cut financial corners or brush the issue under the carpet and hope it will go away.

As insurance providers, the flip-side of the coin is also obvious. It is never a good time to forgo insurance of any description because the potential danger of this far outweighs any short-term financial gain.

How do we, as an industry, make sure that the value of our products remains at the forefront of policyholders’ minds? The problem becomes more acute if we look at the health insurance industry, in particular.

It is easy for someone who is young and healthy to think that private medical insurance is the last thing they need with all the other financial pressures mounting, so how do we encourage healthy policyholders to keep their PMI policies? How do we prove the value of what we are offering?

We know that consumers are not going to scrimp on basics such as milk and bread but luxuries can become more of a quandary.

The difference between what we want and what we need becomes more pertinent. Do we need that treat? Is it OK to reward ourselves, given that we are trying to watch our outgoings? Is a holiday a luxury or a necessity, given how stressful work has been recently?

An extravagant lifestyle becomes just that little bit harder to justify when the going gets tough. Health insurance policies that link their core offering with lifestyle partners certainly make the decision easier for consumers. If you can get discounts on travel, holidays or entertainment – for example, a two for one offer on cinema tickets or discounts on your family holiday – by virtue of the fact that you are proving to your PMI provider that you are making efforts to live a healthy lifestyle, then the impact of a drawn-out credit crunch may be just that little bit less painful.

However, as much as discounts can be the bells and whistles that make a product more attractive, not least a product that has the potential to be as dry as health insurance – after all, who really wants to think about the possibility of becoming ill? – what providers and consumers should really focus on is the core product. The core of any health insurance product is the cover it provides. What you get in addition to the cover is undoubtedly an added bonus but, first and foremost, you need a policy that is going to be there when you need it most.

The good news is that as an industry, we are in a position to offer the best of both worlds – outstanding cover and outstanding partnership deals. It is not an unnecessary expense which can be forfeited when budgets are stretched – quite the opposite, in fact, it is both necessary and desirable.

We need to make sure that consumers know they can have the peace of mind that comes with a health insurance policy and the added assurance that if they do their best to live a healthy lifestyle, they can get excellent deals with travel, leisure and entertainment partners, as well as discounted premiums on their PMI policies.

That should help make the prospect of an economic downturn and any summer rain just that little bit more bearable. It should help make the autumn, winter and spring rain that bit more bearable, too.

Shaun Matisonn is chief executive of PruHealth

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