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Getting the private medical insurance industry into shape

Brokers have been wary of selling private medical cover due to historical issues but the commission on offer is fair and the sector is not difficult to get to grips with

Private medical insurance is one of the few protection products still neglected by mortgage brokers.

Some brokers barely consider mentioning it to their clients, and when clients do express an interest they often prefer to pass it on to a specialist broker.

When I called around and asked brokers why they thought that was the case, their responses suggested that with the complexities and extra work involved in selling the product, the commission rates are inadequate.

Admittedly, PMI has historically had its problems.Growing numbers of claims, increases in medical costs and the number of things people can claim for have led to increases. This, along with other factors, has led to a fall in take-up from some 15% of UK population around 15 years ago, to less than 10% today.

Remember, every provider worth their salt has a broker helpline to offer assistance on products and paperwork

Over that same period the NHS, statistically, has performed more or less consistently it may be argued.

But media attention has focussed away from waiting lists and patients on trolleys in corridors.

Along with that has come a change in customer attitude towards cover from being a requirement to one of a luxury that can be ill-afforded in tough economic times.

The product has suffered hardship and needs some marketing innovation.But I have long held the view that wherever there is hardship or impending change, there is opportunity.

Despite the world’s media being determined to hang on to a recession, I am constantly being told by my consultants that the market is beginning to move again.

More than seven million people in the UK have PMI and as an industry we need to reawaken our awareness of it sooner rather than later.

Now is the time to be reappraising the product.If you have not previously sold PMI you will find it simple, contrary to popular belief.

You will also find the commissioning system fair on corporate and generous on individual business.

Variations in levels of cover mostly surround outpatient consultations and peripheral add-ons such as overseas cover and complementary medicines.

But increasingly, advisers recommend full package cover to avoid customer doubt and confusion.

Just make sure your customers are aware of the moratorium clause and any relevant switch criteria when transferring on the basis of continuing personal medical exclusions.

Finally, remember that every provider worth their salt has a broker helpline and I am certain they will help in product choice, selection levels, underwriting criteria, cover or paperwork.

It’s simple stuff, so don’t be too late to take advantage of the coming boom.


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