Key themes from HBI’s new PMI report
This week we’ve published our first ever Special Report on the private medical insurance (PMI) industry.
The report looks at the big trends, developments and avenues of innovation in the industry, and features case study interviews with three of the most innovative PMI companies: Vitality, Bupa and Alan.
The big takeaway theme from the report is that insurers are trying to move away from being seen as financial intermediaries to becoming “trusted partners of the patient”. Now “100% of them would say they are a health company” rather than a financial organisation, according to Christopher Watney, CEO of the International Federation of Health Plans (IFHP), the main trade body for PMI companies.
For some insurers it could perhaps be argued that this is little more than PR. But the three insurers we case study in this report demonstrate that there are quite radical moves insurers can make which have the potential to improve the deal their members are getting whilst simultaneously helping their own bottom line.
Vitality offers a different kind of insurance contract to its members, which involves nudging and incentivising them to be more healthy, for example by exercising, and giving them rewards for doing so, which ultimately should lead to fewer claims. James McGrigor, who runs a consultancy advising on the global PMI industry, says Vitality is “strong enough on the data front that the argument holds up”, although there is an issue that people who are already health-motivated are more likely to make changes than those who aren’t.
Bupa is trialing a more extreme form of prevention with a scheme that involves sequencing the genome of thousands of its members. The company aims to scale this up to 250,000 people by the end of 2027. The aim is to develop a whole new type of predictive, personalised medicine.
Getting involved in members’ health to this degree cannot be done without vertically integrating with healthcare providers, which Bupa has been doing for years. Many insurers have been pursuing vertical integration with providers, to varying degrees, driven primarily by a desire to control quality and costs. Typically this involves buying a thin layer of primary care or telehealth, although there are a handful of more extreme cases which involve acquiring hospitals, Bupa being one of these.
For the majority of private medical insurers who are not interested in becoming integrated payer-providers, there is still a lot that they can do to help their members navigate complex care systems, and improve the experience of their product. People “expect the same level of experience they get from Netflix or their banking app,” Jean-Charles Samuelian-Werve, CEO of Alan, a French insurer which has invested heavily in developing a fully digital and AI-assisted customer experience, said. “Insurance should be the wedge, not the end product. You need an integrated model where the insurance and the services are one seamless experience.”
HBI Intelligence members can download the full report here. Everyone else can download the Executive Summary here.
We would welcome your thoughts on this story. Email your views to Martin De Benito Gellner or call 0207 183 3779.
