Intermediary survey suggests continued interest in lower cost health cover

Three quarters of intermediaries have reported increased interest in low-cost healthcare cover as PMI and cash plan premiums continue to rise, according to a survey by Benenden Health.

The not-for-profit mutual society, which offers low-cost health cover that is designed to complement NHS services, questioned 47 UK intermediaries in March. The majority reported heightened interest across a broad range of health cover, but more said they were getting increased enquiries for lower cost products than for PMI (73%) and health cash plans (61%).

Increased claims costs have been pushing up premiums for health cover. A report by Reuters in 2023 suggested premiums could increase by 20% this year as more people use private healthcare and medical inflation drives up costs.

Over a third of healthcare intermediaries who responded to the survey said they had seen more businesses ‘trading down’ to less expensive products in the previous 12 months, with just 11% reporting more businesses ‘trading up’.

Appetite for Employee Assisted Programmes (EAP) also appears to have tumbled with just 27% of intermediaries reporting increased enquiries over the previous year – down from 58% in 2023.

Simon Friday, private clients manager at intermediary Advo Group, said businesses were increasingly looking for ‘free’ value-added services that allow employees to use their schemes without needing to make a full claim.

‘There is also huge shift in expectation from employees that their employer will look after them from a health and protection perspective. With growing NHS issues, businesses won’t part with their money if they are not convinced that the healthcare provision is useful for all employees,’ he said.

Benenden Health chief commercial officer Andy Wiggans said it wasn’t surprising to see businesses switching to more affordable options.

‘However, it is interesting to see that businesses are expecting more value from their healthcare providers, regardless of any commitment to increasing spend,’ he added.

‘Less accessibility to NHS care, recognition of a multi-generational workforce with diverse health needs, and the need to justify and scrutinise every business expense due to inflation, are just a few factors that are making the decision for businesses.’