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The route to PMI value

The key to effective competition in today&#39s private medical insurance market, where product differentiation can no longer rely on price alone, is providers&#39 ability to add value to their PMI offerings via innovation and flexibility.

The service provided by private medical insurers must as flexible as their products so that when customers&#39 needs change, they can get the advice they need to help them change their PMI cover to meet those needs.

Some people will want PMI to do everything for them and will be able to afford to pay for a top-of-the-range bells and whistles policy that takes care of most aspects of their healthcare.

But what about those who still want the reassurance of comprehensive cover providing both outpatient and inpatient treatment but who do not have such deep pockets?

The answer is to look for comprehensive policies that cut the cost of premiums in other ways and thanks to the flexibility of the market and a number of recent innovations, there is now quite a choice.

Choosing policies with specific limited hospital lists is one option and opting for a policy that uses only NHS pay beds will make it even more affordable.

Policies are also available which give the customers a choice of private or NHS treatment at the point of claim. If their circumstances mean that they are happy to use the NHS, they get a cashback sum.

Some products keep premiums down by providing private treatment only if the NHS waiting list for the treatment needed is longer than a certain period. These options show how the NHS and private health cover can complement each other and work in partnership.

Recent entries to the PMI market include products which provide cover only for a limited list of conditions. Premiums are relatively low but people buying this kind of policy need to be absolutely clear that they will not be covered for many other illnesses they may develop.

For customers with savings that they are prepared to spend on healthcare, high-excess products could be suitable. These work well for those considering self-pay, offering significantly lower premiums in return for excesses as high as £5,000 but still giving customers the comfort of knowing that if they need treatment costing more than this, they are covered.

Prospective PMI customers with some spare cash might also be happy with a budget PMI option which excludes most outpatient treatment, so they would have to pay for initial specialist consultations.

So, that is what is on offer to people who need to claim on their private medical insurance but what about providing product features from which people can benefit, even if they do not get sick and need treatment?

Telephone helplines providing information, help and guidance on symptoms, stress counselling, conditions and lifestyle, that is, prevention as well as cure, are features of some policies.

Health screening services, a range of counselling services and discounts off health club membership are also on offer as the general shift from “illness” to “wellness” continues.

As far as the corporate market is concerned, businesses are becoming more and more aware of the advantages of providing PMI for their workforce and are now looking for flexible products which allow them to pick and choose the aspects of cover they want to provide for their staff.

Innovation is just as essential in the corporate market – which is expected to be the biggest growth area within the PMI market – at a time when employers are increasingly keen to control their sickness absence levels and to be able to offer attractive benefits in order to support staff recruitment.

Clearly, there is a large market for corporate customers who can appreciate the very real benefits that company schemes can bring. An estimated two million people a year suffer illness as a result of their job, costing British industry an estimated 197 million working days and £11bn, according to information from the Confederation of British Industry.

Against this background, PMI for companies has a three-fold benefit – helping companies to attract and retain staff, keep their workforce healthy and keep their workforce working.

Again, flexibility is the key and in developing new service packages, it is important that the PMI industry recognises the need to offer companies a tailored option which exactly meets their individual needs. This means they can avoid off-the-shelf packages which may include unnecessary services and additional costs.

One of the most significant trends within the group PMI market over the next couple of years will be the development of increasingly flexible products aimed at smaller and smaller groups.

Providers will be offering more modular products, allowing employers to buy a core product and service and then bolt on whichever additional benefits suit their particular company.

Promises have been made by the Government about improved NHS performance and shorter waiting lists but it is going to take time to prove that their aims are achievable and that people can rely on quick access to high quality treatment when they need it.

Private medical insurance enables people to choose where and when they get their treatment and the more flexible the industry can make the products and the better value they are, the more attractive they are likely to be.

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