The NHS has been under tremendous strain since the COVID-19 outbreak. An emergency agreement at the onset of the pandemic saw beds from the private medical sector being blocked for NHS patients, ensuring state-provided medical care services were not overwhelmed. This has disrupted private medical care provision. In recognition of this, Bupa will offer £125m ($173m) in rebates to its private medical insurance (PMI) policyholders.
Most policyholders purchase private medical insurance owing to concerns about NHS waiting times or services provided.
According to GlobalData’s 2020 UK Insurance Consumer Survey, 20.4% of individuals who purchased a PMI policy over the past 12 months did so for this reason. Soon after the COVID-19 crisis took hold in 2020, and in recognition that it was impacting private medical provision services, several UK PMI insurers pledged to rebate any profit made arising from fewer claims.
Almost a year after this announcement, Bupa’s PMI policyholders will certainly be welcome. Eligible policyholders can expect to receive a payment equivalent to approximately one month’s premium, according to Bupa.
However, such rebates may not be enough to appease patients who had to wait for longer than usual before receiving their treatment; after all, many were driven to buy their policy to avoid delays in receiving treatment while also expecting enhanced medical care provision services.
Bupa is the UK’s largest PMI provider by quite some margin. As per GlobalData’s 2020 UK Insurance Consumer Survey, 28.7% of individuals bought PMI from Bupa, compared to 17.2% and 16.4% who chose AXA (including AXA Assistance) and Aviva, the next largest PMI providers, respectively.
In April 2020, the three largest PMI providers all pledged they would offer rebates to policyholders as a result of the reduced services. Of the three, Bupa is the first to announce when policyholders can expect these rebates. Outside the top three, WPA is the main insurer to have offered rebates. WPA offered two rebates to customers in 2020 – each equating to around 40% of their PMI monthly premiums.
Arguably, PMI providers are being slow to offer rebates to customers – much slower, for instance, than motor insurance providers, most of whom offered refunds last year when it became clear that motorists were driving fewer miles as a result of lockdowns and other restrictive measures. Such a slow move from PMI providers can leave customers feeling that they are not getting value for money. Considering that the main purchasing trigger is to avoid long waiting times to receive treatment, insurers could face a situation where justifying the need for such products becomes more complex.