The UK’s private medical insurance (PMI) market proved resilient
to deteriorating economic conditions in 2008, data published by the
Association of British Insurers (ABI) reveals.

People covered by PMI schemes offered by private health insurers
increased by 3.7 percent compared with 2007 to 6.22 million, while
the number of people covered by health care trusts decreased by 2.2
percent to 1.11 million.

Overall this left the total number of people with some form of
private health cover at 7.33 million, up 2.7 percent compared with
2007, and equal to some 12 percent of the total population.

Health care trusts are arrangements where individual companies
provide a form of PMI which is then administrated by insurers and
offer cover for employees and their dependents.

According to the ABI, this enables the subscriber to receive
hospital attention or undergo operations in private hospitals at a
time more suitable, or earlier, than would be available under the
National Health Service.

Despite the increase in the number of people with PMI in 2008, the
UK’s PMI market has over the past 10 years reflected sluggish
growth. Specifically, the number of people covered by private
health insurers increased by mere 1.3 percent between 1998 and
2008, a CAGR of 0.13 percent.

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Indeed, the number of people covered by private health insurers
peaked at 6.59 million in 2001 before falling to a low of 5.82
million in 2005.

Data for health care trusts date back to 2002 and reflect an
increase of 57.8 percent in the number of people covered between
2002 and 2008. During this period, the number of people covered by
private health insurers grew by 0.5 percent.

Gross premium income (GPI) earned by private health insurers has,
however, displayed more robust growth than the number of people
covered and between 1998 and 2008 increased from £1.75 billion
($2.57 billion) to £3.47 billion, a CAGR of 7.1 percent.

In 2008, GPI increased by 7 percent compared with 2007, of which
£1.64 billion was generated by personal cover and £1.83 billion by
group cover.

Claims incurred between 1998 and 2008 increased at a slightly
slower pace than GPI, rising from £1.41 billion to £2.65 billion, a
CAGR of 6.5 percent. Claims incurred in 2008 were up 6.1 percent
compared with 2007.

BUPA continues to dominate the UK PMI market, with a share of some
40 percent. Though BUPA does not provide an exact revenue figure
for its UK PMI business, segmental data indicates that it was about
£1.9 billion in 2008.

Total revenue in 2008 was £5.87 billion of which £2.6 billion was
derived from foreign PMI operations.

Axa UK, the UK’s second largest PMI provider, reported revenue of
£1.07 billion in 2008, up 8 percent compared with 2007. Axa UK’s
PMI unit, Axa PPP Health care, has a market share of about 33
percent.
UK: private insurance