Press Reviews on Premiums Rises

Premiums have doubled over the last ten years - faster than the increase in healthcare costs. Figures from Laing & Buisson, the healthcare analysts, show that the average annual premium for an individual policyholder has climbed from £410 to £990.

A Laing & Buisson spokesman says, "Some of the premium increases for individuals have been much higher than the rise in the rate of claims. While the cost of claims has risen by 54 per cent between 1990 and 2000, premiums for individual policyholders have climbed 78 per cent in real terms, while those for corporate scheme members have gone up by just 24 per cent."

The cost of insurance cover went up by 18% last year, which is almost 10 times the rate of inflation. However, the amount paid out in claims during 2000 rose by 2.8%. Therefore the premium increase has served to boost insurers' profits and the average annual premium has now risen to £ 1,007, the first time it has broken the £ 1,000 barrier.

The latest increase is bigger than previous years with rises of 11% in 1999 and 3% in 1998.

In terms of payout from the insurers only 71% of the money taken in by premiums is paid out in claims compared with 79% in 1999 and 85% back in 1991.

This article went on to recommend that patients shop around for cover and noted the domination of the market by the two major insurers, BUPA Insurance and PPP, who make some of the highest charges for cover.

Mr. Roger Hymas, former Managing Director of BUPA Insurance said "Insurers are boosting profitability by increasing premiums to unprecedented levels, while cutting their costs by getting tougher on claims. It is older people who suffer because their premiums are much higher than the average £ 1,000"

PMI sales rose by 5.5% last year, the biggest rise in a decade. Company Plans rose by 7.4% whilst the number of individual PMI subscribers fell by 3.2%. There were 6.9 million UK PMI subscribers at the end of last year compared with 6.7 million 10 years ago.

Press Reviews on Value for Money

Through 2001, there have been many reports suggesting that the private medical insurance sector is not offering value for money:

Private medical cover "poor value"
Pauline Skypala on the FT website ( on 21 May and 5 June 2001 wrote: Private medical insurance is poor value for money and too confusing, according to a report from the London School of Economics.The report, "Voluntary health insurance in the European Union", points out that PMI subscribers paid an average of £746 in 1998/99. This compares with the £382 per person that it cost the NHS to provide hospital and community services for ages 16 to 64.

Private medical insurance now costs over £1000 a year on average, and the high costs have led to a drop in the number of people covered with a drop of 4.5% in 1999 (and 3% in 2000 -Laing & Buisson report Ed). Premiums have regularly gone up by far more than inflation, with increases of between 6 to 12% a year from 1993 and 1999.

The report also says that making comparisons between policies to work out which offers the best value is still too difficult despite the call from the Office of Fair Trading in 1999 for greater clarity and accuracy in the information available to policyholders.