LaingBuisson has published the 20th edition of their Health Cover UK Data Insights Report.

 

Highlights include:

  • The total market value for the UK health cover market is estimated at £7.59 billion
  • The total UK health cover market has grown 12.2% year on year – an £825 million uplift
  • The private medical cover market alone is valued at approximately £6.15 billion – growing 12.2% year on year
  • The big four players in private medical insurance – Bupa, AXA Health, Aviva, and VitalityHealth – capture 95% of the market. This is up from 88.3% in 2017.
  • Dental cover market remains buoyant – with the combined market segments of dental insurance and dental capitation/maintenance plans reaching more than £1 billion for the first time.
  • Record customer numbers put the health cover market in its strongest position since the 2008 financial crisis

Record numbers of people are turning to private health cover as lengthy waits for NHS treatment continue. New research published today by LaingBuisson found surging demand from both employers and individuals for private medical insurance (PMI), health cash plans and dental cover. This has led to a record high of £7.59 billion for the UK health cover market – up £825 million year on year.

 

In total, 4.68 million people were subscribed to private medical cover (health insurance) schemes – once dependents are included, it means that 8.06 million people were able to make use of private medical cover. This is more people than ever previously reported – and equates to coverage of 11.8% of the UK population – the strongest market coverage there has been since 2008 (12.3%).

 

A further 6.4 million are covered by health cash plans or dental cover options. This means that more than 14 million people in the UK are now covered by some form of privately paid health cover option.

 

Against a backdrop of high inflation and the increasing values of claim incurred, cover providers appear to have protected customers from equivalent rises in premiums. Average premium prices fell in real terms for many customers – meaning many customers are paying equivalently less than they were at the same time in 2022.

 

Private medical cover

 

Private Medical Cover (PMI and company-paid self-insurance schemes) represented the largest segment of the market at £6.15 billion – up 12.2% in 2022, or 4.7% in real terms. This represents value growth of £669 million.

 

4.68 million individuals were enrolled on private medical cover schemes in 2023. This is up c.279,000 on 2022 (6.3% growth year on year). The vast bulk comes from company-paid schemes with less than 20% (19%) held by individuals paying out of their own pocket.

 

Private medical cover pays for about half of private hospital and specialist treatment carried out in the UK. Two-thirds of private medical cover is funded by employers as an employee benefit. The remaining third is paid by individual PMI policyholders.

 

Health cash plans

 

Premium income for health cash plans, which help to pay for ‘low ticket’ health expenses such as visits to dentists and opticians, was estimated at £435m in 2023 – up £19 million in 2022 (4.6% growth).

 

2.89 million individuals had health cash plans in 2023. This was up 129,500 in 2022 (4.7% growth year on year). The average price of a company-paid health cash plan is £94 per contributor, compared to £272 for an individual or employee-paid health cash plan. Company paid cash plans increased by just £2 year on year, meaning in real terms they cost companies less per head than in 2022. The result is that despite volume growth in the company segment, overall real-term growth was muted.

 

Dental capitation plans and insurance schemes

 

Demand for dental cover products has grown steadily since 2007 and in 2023 LaingBuisson estimates the market value crossed £1 billion for the first time. Market growth over the last fifteen years has been aided by long-standing issues in accessing public-pay dentistry, along with rising cost in the NHS co-pay for dental.

 

The latest figures demonstrate robust growth between 2022 and 2023. Dental capitation subscriptions grew to 2.67 million individuals – an increase of 342,000 on 2022 levels. Since 2007, the market value has risen from £454 million to £804 million – a pace that has allowed it to remain steady in real-terms, despite the recent backdrop of high inflation.

 

Demand for dental insurance, measured by contributor numbers and persons covered, has also seen strong growth. The number of subscribers rose to 802,000 by the end of 2023, an increase of 7,000. This is significantly lower than the previous year, which saw an increase of nearly 90,000. However, the figures may have been affected by Cigna’s exit from the UK market in 2023.

 

Author of this year’s report, Tim Read said:

 

“In our last report, LaingBuisson reported a real-term fall in overall market value despite uplifts in subscriber volumes. This was due to the high level of background inflation that wiped out any nominal growth. Despite inflation levels only beginning to fall back in the last quarter of the year, the market has managed an impressive real-term growth approaching 5% to year-end 2023. 

 

“The overall health cover market tracks to changes in the medical cover market – this is because – at more than £6 billion – it accounts for more than 81% of the market value. Growth in the medical cover segment was 12.2% last year.

 

“However, all market segments – from health insurance to dental cover to cash plans – saw growth in both value terms and in the number of subscribers. The strongest growth was in dental capitation and maintenance plans (16.9%), while health cash plans saw more limited growth (4.6%). However, for the first time the combined dental cover market is believed to be over £1 billion. 

 

“The market continues to grow faster than both recent and historic norms and would now appear to be the strongest it has been since prior the 2008 financial crisis – with nearly 12% of the UK population estimated to be covered under some type of subscription. However, the background drivers are very different to those in the mid-2000s. The ongoing waiting list challenges alongside a sharp fall in support for the NHS amongst the public suggests there are limited reasons to expect a significant slowdown in health cover take-up over the next couple of years.”