ICAEW.com works better with JavaScript enabled.

How has health insurance been affected by the pandemic?

Author: ICAEW Insights

Published: 13 Aug 2021

Could coverage levels change because of the coronavirus and will increased demand affect supply, asks Laura Miller.

Insurance sector professionals are seeing a pandemic bounce in demand for private medical insurance (PMI), but there is growing pressure to increase prices to offset demands on other parts of insurers’ business model.

Demand has “never been higher” in the words of one broker, as the public reels from a year-long health emergency that has had the added effect of highlighting the dangers of complications from co-morbidities, and the dire consequences of long waiting times.

Insurers, while benefiting from limited PMI claims due to the moratorium on procedures, will be hoping more demand for PMI will offset other heavy pandemic costs.

Aviva, Britain’s biggest insurer, paid out £1bn last year to life insurance, critical illness cover and income protection customers, its highest ever payout. 

Of that, £682m went on life insurance, over 50s and whole of life plans, with around 2,150 claims for deaths due to Covid, the fourth most common reason for claims at 4.7%. 

But with vaccine roll-out opening the floodgates to deferred private treatments, brokers are expecting PMI claims to rise, followed by premiums.

High costs may not defer new customers, think some insurers. “All private medical insurers are reporting a surge in sales of consumer PMI as the impact of the pandemic on NHS waiting lists becomes clear to the public,” says Brett Hill, distribution director at Towergate Health and Protection.

He adds that while company medical insurance schemes saw a reduction in membership in 2020, with many companies reducing their headcount in the face of economic uncertainty, “this trend is expected to be reversed in the latter half of 2021 and companies begin recruiting again in anticipation of economic recovery”.

Read more about this from the Financial Services Faculty at: How has health insurance been affected by the pandemic | ICAEW

Recommended content

Newsletter
A megaphone
Stay up to date

You can receive email update from ICAEW insights either daily, weekly or monthly, subscribe to whichever works for you.

Sign up
Daily summaries
Three yellow pins planted into a surface in a row
News in brief

Read ICAEW's daily summary of accountancy news from across the mainstream media and broader financing sector.

See more
Open AddCPD icon

Add Verified CPD Activity

Introducing AddCPD, a new way to record your CPD activities!

Log in to start using the AddCPD tool. Available only to ICAEW members.

Add this page to your CPD activity

Step 1 of 3
Download recorded
Download not recorded

Please download the related document if you wish to add this activity to your record

What time are you claiming for this activity?
Mandatory fields

Add this page to your CPD activity

Step 2 of 3
Mandatory field

Add activity to my record

Step 3 of 3
Mandatory field

Activity added

An error has occurred
Please try again

If the problem persists please contact our helpline on +44 (0)1908 248 250