Bupa Increases New Business by 36%

Bupa, the UK's largest health insurance provider, announced some successful figures for 2008 despite the economic downturn.

The medical insurance provider saw a 38% increase in new business in life assurance products, income protection and critical illness cover.

Steve Casey, head of Bupa's product development and marketing team said, 'To report a 38% increase in such unpredictable economic times is credit to our supporting intermediary partners, the quality of our products and our continued commitment to innovation.'

He added, 'We don't intend to sit back on our laurels. We will continue to develop and improve our products to provide customers with comprehensive insurance cover when they need it most.'

Despite this good news Bupa announced a 53% fall in full-year pre-tax profit to £187.1 million last week. Bupa UK represents 34% of group revenue and includes domestic and international private medical insurance operations.

Ray King, Bupa chief executive said, 'We are not immune from the economic downturn. Looking into 2009, I expect trading conditions to weaken. Nevertheless, I believe that the Group’s breadth of activities in terms of geography, sector and focus on health, will help us to weather recession in our key markets. In this environment, our focus is very much on continuing to offer excellent customer service and tightly managing costs and capital expenditure.'

Bupa has been around since 1947 and provides a range of health insurance services,and also owns and runs care homes, The Bupa Cromwell Hospital, a private London hospital, Health Dialog, a leading US disease management company, and Bupa Home Healthcare an out-of hospitalcare specialist.

People Happier with NHS

According to the latest British Social Attitudes report people have never been happier with the NHS. So what does this mean for the medical health insurance business? Does it mean that the consumer is less likely to take out private health insurance? And are there options which combine NHS care with private health care?

The report, conducted by the National Centre for Social Research, found that people are the happiest they have been with the NHS since 1984. When asked the question: And how satisfied or dissatisfied are you with the NHS as regards being in hospital as an in-patient? 46% answered that they were either 'very' satisfied or 'quite' satisfied. The similar levels of satisfaction applied to people's experience of the care of children and young people in the NHS.

However, even though there is a higher level of satisfaction this still means that there is a high proportion of people who are not happy. 18% of people surveyed said they were either 'quite' dissatisfied or 'very' dissatisfied with the NHS. It is interesting to note that this figure is close to the 12% of Britons who have private medical insurance.

The ABI has reported that they are not seeing a decrease in the number of people taking out medical insurance but that they are seeing people reducing the level of their cover. This appears to be related to the current economic situation rather than any other factor. Additionally recent survey's by BUPA show that the main reason people turn to the private health insurance sector is that they have concerns over NHS levels of cleanliness and the risk this poses of catching superbugs.

There are a couple of private health cover options available which capitalise on the improvements in the NHS:

The Six Week Option
This is where you only use your health insurance policy if you have to wait more than six weeks in the NHS. One of the reasons that people are happier with the NHS is that waiting lists have been cut down since 2004. The target set by the NHS is 18 weeks. However this is still a long time to wait if you are unwell and distressed. There are several companies that offer you a reduced premium if you are prepared to wait six weeks to see if you can be treated by the NHS in that time. Standard Life Healthcare for example, offers this in both of their EspritHealtcare plans and provide a 10% reduction in your premium if you take up this option.

Freedom Healthnet Ltd
Freedom offers an excellent alternative to traditional health insurance policies. They give you, in many cases, very cheap health insurance cover and in return you get paid in cash should you fall ill. This leaves you with a great amount of freedom. If you are perfectly happy to be treated on the NHS then you are free to use the cash for anything else that you choose.

Smoking Damages Your Health Insurance Premium

Smoking is one factor which will affect the amount you pay for your private health care. Other factors are your gender, your age and your general lifestyle, including how much you drink and how overweight you are.

Of all the preventable killers smoking provides the greatest risk and this is reflected in the cost of your medical insurance premiums. If you want cheap medical insurance you need to stop smoking. But stopping now won't give you cheaper cover immediately. There is an average period of three years from the time you stop smoking before the medical insurance companies treat you as if you are a non-smoker. This reflects the potentially long-lasting effects of smoking.

Below is a comparative look at PruHealth's premiums for a smoking and non-smoking 35 year old man. The figures were collected on 6th February 2009:

Basic Cover
Smoker £40.93
Non-smoker £37.44

Mid-Range Cover
Smoker £48.60
Non-smoker £44.45

Comprehensive Cover
Smoker £60.73
Non-smoker £55.55

With the Pru Health Vitality programme you can pay decreased premiums if you follow a healthy lifestyle and that includes if you don't smoke. They also help you to stop smoking by providing discounted rates for courses at Allen Carr's Easyway to Stop Smoking.

BUPA have recently launched a new tool (in conjunction with Facebook) to help people give up smoking . The tool measures how long you have been a non-smoker and encourages your contacts to suppport your continued efforts to give up. Senior health editor at BUPA Alastair McQueen said "QuitClock is the first Facebook application BUPA has released. It's a new way to engage people who use social networking sites and who want to stop smoking." The highest proportion of smokers is young people so anything which engages this age group is beneficial.

So what is it that private medical insurance companies are worried about when it comes to smoking and why do smokers have to pay more?

114,000 people a year die in the UK of smoking-related diseases including lung cancer, cardio-vascular diseases and emphysema. Smoking cuts your life expectancy by seven years and according to netdoctor.co.uk:

'the number of people under the age of 70 who die from smoking-related diseases exceeds the total figure for deaths caused by breast cancer, AIDS, traffic accidents and drug addiction. '

ASH is a charity which provides information about smoking and publishes reports about the health effect of smoking.

Because people know that smoking is likely to increase their health premium they may lie when applying for private health care cover. The discovery of any lies will immediately invalidate any claim you might make whether it is related to smoking or not. With a recent increase in insurance fraud, insurers will be more vigilant to this in future. Nick Starling from the Association of British Insurers, said that, 'honesty is the only policy. Cheating to get cheaper insurance puts your cover in jeopardy, with potentially disastrous consequences.'