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Demand for private medical insurance in the UK is expected to rise this year, according to industry executives and independent analysts, as the junior doctors’ industrial action shows no sign of ending and NHS waiting lists remain high.
Payouts for private claims hit a record of almost £3bn in 2022, the latest year for which there is complete data, the Association of British Insurers said. Independent research suggests the number of Britons with medical insurance has grown at a high single-digit annual rate in recent years.
Industry figures expect the growth to continue despite the cost of living crisis.
“We’re being told by the private medical insurers that they are taking on record numbers of customers and that is reflected in the data we receive from hospitals for how people are paying for their procedures,” said Dr Ian Gargan, chief executive of the Private Healthcare Information Network, an independent organisation that assesses the fees and performance of private consultants and hospitals. “There were record numbers using insurance for their treatment in 2023.”
There were 12,000 more admissions paid for with private medical insurance in the second quarter of 2023 compared with the same period in 2022, a 9 per cent increase, PHIN said.
Aviva, one of the largest providers of health insurance in the UK, reported that its “protection and health” premium sales were up 23 per cent in the third quarter of last year compared with the same period in 2022.
David Furness, director of policy and delivery at the Independent Healthcare Providers Network, an industry body, said: “Nearly nine in 10 companies across the sector feel the market environment for private medical insurance-funded services is ‘very positive’ or ‘positive’ so independent providers are upbeat about the[ir] prospects.”
Some 46 per cent of respondents in an IHPN survey said an inability to get quick treatment on the NHS was a factor in their decision to seek private care.
The waiting list for routine NHS hospital treatment in England has fallen slightly from a record 7.77mn treatments at the end of September to 7.6mn two months later. But the median referral-to-treatment time for such care almost doubled from 7.5 weeks in February 2020 to 14.7 weeks in September 2023, according to analysis of NHS figures by the British Medical Association, the doctors’ union.
However, 1.3mn appointments have been cancelled since the junior doctors’ strike began in December 2022, with more than 200,000 cancelled in England as a result of the work stoppages in the past month.
The area of private medical insurance that has seen the strongest growth has been in the number of people taking out personal cover, according to a survey by Statista Consumer Insights, a research company. The percentage of people in the UK aged 18 to 64 with personal cover jumped from 17 per cent in March 2022 to 26 per cent in September last year, while those taking out cover through company schemes rose from 21 per cent to 28 per cent over the same period.
Data from the PHIN indicates that during the pandemic there was a surge in people paying for private treatment. This has waned recently as people have taken out insurance instead, but remains 35 per cent higher than before Covid.
James Daley, managing director of Fairer Finance, a consumer group that rates and reviews financial services providers, said the growth in private health insurance was likely to continue, although he described the market as “growing from a small base” rather than “exploding”.
“This is likely even with a change in government [at the next election] because there’s not the flexibility in the public finances to make a big difference to the NHS,” he said.
However, he warned that as the private market grows providers will “have to work harder to explain what they’re offering”, particularly what is and is not covered.
