Protection  

Bupa and the return of the prodigal son

When asked about the possibility of further exits, Bupa’s Richard Norris said: “You can never say never in business, but it is not our intention to withdraw again.”

A new commission structure certainly bodes well, as does the recent appointment of industry stalwart Jack Briggs as interim head of broker relations at Bupa.

Stephen Walker, director of Brighton-based specialist intermediary Medical Insurance Services, said: “Reading between the lines, this appointment suggests a realisation within Bupa that it had made a mistake and that it is clearly realising that working through intermediaries is cost-effective. The problem with Bupa is that every now and again it appoints a new chief executive and they tend to bring in their own management experts from other industries.

“These individuals think they can restructure, but they just make the same mistakes as before. The fact that it brought in Jack Briggs, who knows the industry well and has relationships with intermediaries, suggests it is beginning to approach things from a different angle.”

Broadly positive initial feedback from intermediaries on the new Bupa By You product is also fairly encouraging. Soft-launched this January to ensure that online systems for intermediaries were working properly, and going whole-of-market a month later, it has more rating flexibility than its predecessor, primarily as a result of being able to price according to geographical location in addition to age.

Graeme Godfrey, director of Best Go Private, a specialist intermediary based in Bushey, Hertfordshire, said: “The new product is good and has everything you would want to see in a PMI contract. It’s one of the more competitive options, but location is the main thing. So for our clients, who are mainly based in Central London, Middlesex and Hertfordshire and require Central London hospitals, its prices aren’t so competitive.”

Most reservations expressed about Bupa By You refer to the fact that it has an unusually high maximum no-claims discount (NCD) of 70 per cent, which was only 30 per cent for Bupa’s previous ClientChoice product. But these are largely just the same generic criticisms that have traditionally been levelled at other insurers who offer high NCD formats, like PruHealth, Aviva and AXA PPP healthcare.

The main beef here is that PMI has been designed to help people get better when they are ill, so to encourage them not to claim through mechanisms like NCDs undermines the purpose of them having it in the first place. Additionally, policyholders can be left with huge leaps in premiums which could prove unaffordable at renewal.

“If you claim over £500 in a policy year on Bupa By You then you lose the full NCD in that year,” continued Mr Godfrey, “and £500 is a tiny level which you could exceed with a few sessions of physiotherapy and a couple of consultations. We don’t favour products with NCDs and we prefer insurers who don’t offer them, like WPA, Exeter Family Friendly, April UK and Freedom.”