Looking to the long haul: How can the sector maintain the surge in private health insurance sales?

Looking to the long haul: How can the sector maintain the surge in private health insurance sales?
Looking to the long haul: How can the sector maintain the surge in private health insurance sales?

Karen Woodley


Head of Healthcare Distribution Sales

This year, the NHS has celebrated its 75th anniversary. But amidst the celebrations, a backdrop of record-high waiting lists and continued difficulty in accessing primary care services is leading more consumers to consider private healthcare alternatives.

As this trend gains momentum, the health insurance industry is seeing a notable rise in interest from consumers exploring health insurance as one alternative. But how long will current market growth remain positive? And what can we do to prepare should the current ‘boom’ in interest for private health insurance come to an end?

Is uptake sustainable?

From a consumer perspective, easy access to healthcare is understandably a priority. Almost 400,000 patients have been waiting over a year for treatment on the NHS1 – over 300 times as many as in May 2019, before the pandemic began. Not to mention, research from The Exeter’s 2023 Health and Financial Fears report indicates that over a third (37%) of all UK adults are concerned about getting a same-day, or face-to-face GP appointment.

When services are less easily available in the public healthcare system, for all its advantages, consumers begin to look at alternative solutions. It’s no secret that in the private healthcare sector, we’ve seen increased growth in sales since the pandemic. According to the Private Healthcare Information Network (PHIN), the number of private admissions paid for with private medical insurance has reached record levels, with 156,000 paid for in this way from January to March 20232.

Even after recent events, the NHS remains part of the national psyche, with 54% of the public stating that the NHS is what makes them most proud to be British3. The challenge we face as an industry is to ensure that the increase in private health insurance uptake is driven by consumers who genuinely understand and value its benefits, rather than simply viewing it as an alternative to the NHS during difficult times.

Naturally, waiting lists will eventually begin to come down and the news cycle will eventually shift from the challenges the NHS faces, prompting us to consider a more sustainable plan for maintaining health insurance uptake in the long term.

Regular customer engagement, driven by informative consumer marketing campaigns and further collaboration between providers and advisers, can help the private sector showcase its value. Furthermore, with the NHS increasingly using private facilities to meet demand, there is an opportunity for the private sector to prove its worth to patients who may not typically consider this option, even with the current delays.

The role of guided options and additional benefits

If we’re going to best support the UK consumers who need this alternative option, we’re going to have to address the main challenge in accessing private treatment: affordability.
At the moment, more and more UK consumers currently have or are applying for private health insurance policies – 29% are doing so in 2023, compared to 18% last year, according to our research. However, our 2023 Health and Financial Fears report also found that more than a fifth of UK workers (21%) are concerned about being unable to afford private healthcare in 2023, compared to 17% in 2022.

So how do we overcome this barrier? One solution will be guided options. These policies reduce costs for the consumer by reducing the range of specialists and hospitals available for treatment, without compromising on quality of care or accessibility. This increased affordability will be important in attracting new customers, particularly if living costs remain at current levels.

But the value of tailored private health insurance extends beyond immediate medical needs, too. From greater access to services, including preventive measures such as health check-ups and screenings, to wellness programs that empower individuals to lead healthier lives, the benefits that come with health insurance serve as more than just a safety net for the cost of immediate treatment.

Today’s consumer wants convenience with healthcare, and improvements to private digital offerings may help to attract a younger audience. As the NHS continues to invest in digital healthcare, remote GP appointments will no longer stand out as a unique selling point. The better speed and accessibility of private options, as well as the continual private sector investment in digital services, will help to show consumers that there is definite, undeniable value in a policy that is worth the monthly cost.

The current surge in interest might be encouraging consumers to take out private healthcare policies, but it may well be these additional benefits that convince them to keep, and use, a policy long-term.

Education and communication are key

In the post-Consumer Duty world, collectively our industry is focused on ensuring consumers are equipped to make good decisions. But more can always be done to provide education on the long-term benefits of health insurance.

By offering regular advice that is tailored to individual needs, advisers are not only acting in their client’s best interest but also demonstrating how health insurance can be of benefit over an extended period of time. What’s more product providers must ensure they regularly communicate with customers through a range of channels. Not only will this ensure clients are fully aware of what’s included with their cover, but it will also help to build long-term, trusting relationships and customer loyalty.

Private health insurance isn't just a safety net, but an opportunity for consumers to take greater control of their health decisions. As the healthcare landscape shifts and pressures on the NHS hopefully ease, we need to ensure that we work together so that private alternatives continue to be front of mind for consumers.


1 - www.bma.org.uk
2 - www.phin.org.uk
3 - www.ipsos.com


This article was originally published in IFA Magazine on 13/12/2023.

Link: Looking to the long haul: How can the sector maintain the surge in private health insurance sales? - IFA Magazine