Private Medical Insurance Growth

Despite the recession a new report by analysts Laing and Buisson states that the private health insurance market is still growing. 7,562,000 UK citizens have private medical insurance policies or trusts and this figure represents 12.3% of the population. This report contradicts other reports which have registered health insurance market decline.

In comparison to 2006 and 2007, where the industry experienced 2% growth each year, the increase last year was a modest 0.6%. Nonetheless this is a significant growth which came from individual policy holders rather than business policyholders. This sector of the business declined by 0.2% in 2008 despite a growth of 5.6% over the previous two years.

Philip Blackburn, a Laing and Buisson economist said: 'Individual purchasing of PMI held up well in 2008 as insurers offered a wide choice of policy options and budgeting, and insurers worked hard on retention, though there is a growing ‘trading down' trend, as individual spending levels remain relatively fixed while PMI costs continue to rise strongly.'

The figures suggest that people are reluctant to give up their private medical insurance. However rising health cover costs are forcing people to look at alternatives that perhaps provide less cover at a cheaper cost. Health News UK has been giving advice over the last few months on how to find lower cost policies that still offer the best health insurance cover.

According to Laing and Buisson some people are likely to drop their medical cover in 2009 as rising levels of unemployment are likely to reduce people's disposable income.

Blackburn said, 'The ongoing recession in 2009 is certain to have a more acute impact on PMI demand than the previous year as increasing unemployment across industry and services delivers a fallout in employee benefits, and downward pressures on household incomes and personal net worth (savings/investments) deliver more cautious individual spending, with reductions in many purchases that are considered non-essential. '