Cash plan provider Health Shield has bought Medex Protect, a specialist private medical insurance excess provider, for an undisclosed sum.
Medex Protect covers medical excess amounts on private medical insurance plans and shortfalls in cover for treatments.
Health Shield stated the deal was offering a "complementary bolt-on" to its products and it will extend the availability of standalone PMI excess cover to more companies, whether they have a health cash plan in place or not.
Jonathan Burton, chief executive of Health Shield, said: “Medex Protect is a well-respected organisation with a product that represents a perfect fit for Health Shield.
"Whilst health cash plans provide valuable PMI excess cover, we appreciate that not every company wants a cash plan but they still want to cover their PMI excess. This deal will allow us to help them do just that.”
Medex Protect was founded in 2013 to drive innovation and enhanced value in the sector.
Its add-on policy refunds the excess clients pay if and when they make a claim on their PMI policy.
It also provides reimbursements up to policy limits for shortfalls when a hospital or consultant charges over and above private medical insurers’ guidelines.
The deal will give Medex Protect greater range to its distribution channels and skills base.
Jason Dunks, product director at Medex Protect, said: “Medex Protect has built a strong name for itself in the intermediary market thanks to our great service and unique proposition.
"We provide extra protection and peace of mind for clients; in turn giving intermediaries the support to enhance PMI retention levels in light of the ongoing increases in insurance premium tax rates.
“Joining with Health Shield will bring significant strategic opportunities and enable the small team at Medex Protect and our proposition to be an integral part of a growing, innovative employee wellbeing business.”
Medex Protect will eventually use the Health Shield brand and will relocate from Wilmslow in Cheshire to Health Shield offices in Crewe.
Stuart Scullion, executive chairman of the Association of Medical Insurance Intermediaries, said: “Medex Protect offers a cost effective means of insuring against PMI claims shortfalls and policy excesses. Its continued success, and acquisition by Health Shield demonstrates there is a need for this type of product in the market.
"However, I would express a note of caution. An insurer would expect to see a change in claims behaviour as a result of introducing a PMI policy excess, and have historically given a discount accordingly.
"Reimbursement of any PMI policy excess by another means distorts the anticipated change in claims behaviour, effectively turning the addition of an policy excess into a one year discount. This is evident through the changes to insurers excess discounts over the last two to three years.”