ProtectionJun 26 2015

Firing Line: Chris Horlick

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Private medical insurance has suffered from advances in technology; as medicine has improved, so it has got more expensive and premiums have gone up.

But, according to Chris Horlick, the healthcare distribution director of Axa PPP, the second biggest PMI provider in the UK: “It’s important to grow the market rather than cut each others’ throats.”

While consumer demand has fallen, the corporate market is picking up and has signs of long-term growth prospects.

Mr Horlick said: “The government is increasingly challenged to meet the ever-increasing costs of healthcare, and it will start to push down more and more on the corporates, which will have to respond in some way.”

Just as companies have been seen as the gateway to more individual pension saving, so employers are being given more responsibility for employee welfare.

Mr Horlick said: “Whether it’s straightforward PMI or occupational health programmes or well-being, or a combination of these, we will increasingly see corporates start to play a bigger and bigger role in healthcare, and to some extent it’s in their interests to do so.”

The challenge for employers is that with an ageing workforce there will be fewer skilled people in the market and companies will need to do more to look after them, and more to entice staff.

Mr Horlick said: “You will get companies having to think about how they will retain their workers for longer, and there are fewer and fewer people around. It will become more important to attract them.”

The challenge for employers is that with an ageing workforce there will be fewer skilled people in the market

The big demographic challenge is the fact that there are more claims induced by stress from a faster paced world, increasing obesity and widespread back pain. If companies adopt a holistic approach, including providing private healthcare, they are making a long-term investment in their workforce. HSBC and Lloyds are two examples, making PMI available to all their staff, he said.

The consumer side is more of a challenge, but Mr Horlick said personal policies need to be seen in the context of the individual.

He said: “The NHS is a fantastic part of our culture, but if you’re running a small business and have to be there, if you have a cartilage tear in your knee that prevents you from getting to work, that’s quite a problem. If you’re in an area where you may have to wait 18 weeks to have that dealt with, it is a big problem.”

He added that PMI for individuals did not automatically need to be expensive. His company offers a range of options that suit different circumstances.

Mr Horlick joined Axa PPP in September last year, his second time in the company. He had left in 2009 after doing a not too dissimilar role, to work for Partnership as managing director of care in the long-term care division.

He said: “Long-term care is one of those interesting areas of life that people believe will never happen to them, and many believe they will be looked after by the state. If you have accumulated even a relatively modest amount of wealth, including your home, you will be too wealthy for the state to look after you, for social care. People will have to plan for themselves.”

Mr Horlick was directly involved in the flotation of Partnership in June 2013, and was personally invested. After the Budget announcement last year dropping the requirement for people to annuitise, he said he personally lost “quite a lot” of money.

He said: “I can assure you that the entire industry was gobsmacked when the announcement came. There was no consultation, no inside track, it was an enormous surprise.

“I believe that annuities will continue to form part of people’s retirement planning.” He added that companies will adapt and develop new products.

Mr Horlick left Partnership after it floated: “I decided that I would step down and take some time away. I took a year off, and thought about what I might like to do next.” At that point his former boss, Keith Gibbs at Axa PPP, asked him if he might like to come back.

The company had changed slightly. It had split out the international and consumer direct business and has since made an acquisition.

Earlier this year it bought the PMI business of Simplyhealth, a smaller provider of medical insurance. He said: “We are quite a large player. We already had significant strengths. Simplyhealth was the opportunity to increase the market share by about 3 per cent. It puts Simplyhealth through our superior buying power and we can deliver better value for our customers.”

The acquisition now gives Axa PPP a 29 per cent market share, catching up with Bupa’s 40 per cent. Would he like to overtake the bigger player?

He said: “What we’re focused on is delivering profitable growth and outstanding value for our customers and looking after our shareholders and staff. We want to grow profitably in the right areas and the right way.” He added that he is always happy to have “discussions” with other potential targets.

As for advisers, he believed PMI offers a good opportunity – PMI offers trail commission – and if the adviser does not feel expert enough, they can always pass the client on to Axa in exchange for a introducer’s fee.

He said: “The traditional IFA has significant potential in the PMI market. When an IFA does a fact-find – where they ask the question: ‘Do you or your family have PMI?’ – that’s potentially a significant opportunity.”

Melanie Tringham is features editor of Financial Adviser

Chris Horlick’s Career Ladder

2014-present Axa PPP, healthcare distribution director

2009 to 2014 Partnership, managing director of care

2000 to 2009 Axa PPP, healthcare sales and marketing director

1998 to 2000 Denplan, managing director

1980 to 1983 Barclays Bank, (small corporate lending) corporate finance division