When there have been flashes of innovation, the market has simply reacted with ’me too’ variations, without adding any real value into the mix, and as an industry we are guilty of a copycat mentality.
However, the market is now ready for a fresh approach. Following a long-period of a declining or stagnant market, there is now a renewed optimism with signs of returning to growth. PMI providers need to step up to the plate and capitalise on the opportunities that lie ahead.
There can not be a reliance purely on a stronger economy. Providers must pro-actively respond to the needs of customers and intermediaries, while also evolving cover to address gaps in the system.
Now is the time to invest in product value and offer customers more, not less, and to broaden the appeal of health insurance by being flexible to changing needs.
Unfortunately, there continues to be a misguided focus on blunt cost containment tools, such as fee maxima, compulsory networks and open referrals, cover restrictions and limited follow-up care, as a means to control healthcare-cost inflation.
These may have a temporary marginal impact on costs. However, they also seem to be having a greater negative impact on the perceived value of the product, and do not address the fundamental drivers of rising costs.
Our proposition is being eroded by these measures when we should be innovating and enhancing product value by offering extended cover, higher payouts, more originality and looking at where customer and market needs are converging.
The real driver of rising cost relates to demand rather than supply. Chronic diseases are increasing, with conditions such as heart attacks and strokes, cancers, diabetes and chronic respiratory disease accounting for over 63 per cent of deaths in the world today. These conditions are responsible for a high proportion of claims, which can be avoided or better managed through healthier lifestyle choices.
Looking around the world at the more developed healthcare markets, the focus is shifting away from aggressive supply-side management and is increasingly turning to prevention, personalisation, and looking at the role individuals themselves can play through the lifestyle choices that they make.
We can play our part by helping address some of society’s major lifestyle health risks, such as smoking and obesity, and helping to identify problems early.
Sixty per cent of adults in England report a chronic health problem, which is another area we cannot afford to ignore, and is crying out to be addressed, as opposed to continuing to focus narrowly on sickness provision for acute treatment. Ultimately, the goal is to redefine the way people think about health cover to help get the market growing again.
