Richard Clarke shares expert insights at CIPD Spring Forward event
At the CIPD’s Spring Forward Event held at the Pomme d’Or Hotel on Thursday 23 May,
Richard Clarke, MD of the Gallagher Guernsey business, offered his expert insights and
perspectives on the emerging macro and local trends in private medical insurance, dental
insurance and health and wellbeing.
Richard started by outlining the state of the current healthcare landscape which he described as
strained and under increasing pressure. This is due to an aging and growing population, an
increasing number of people on UK waiting lists – in February 2024 it stood at 7.54 million – the
rising costs of treatment in the Island, UK and internationally, together with the continued threat of
strike action from healthcare professionals.
Costs in particular have been increasing since the 1960s but it remains difficult to identify averages
internationally as countries differ vastly, particularly where some offer universal healthcare and
others do not. A night’s stay in a US hospital, for example, amounts to 5,000 US dollars and in the
UK, the average comes in at just over £1,000. Exceptions to this include developing countries such
as Nigeria, which has actually experienced a 20% reduction in major surgery costs through
healthcare reform.
Other factors which impact on the provision of effective healthcare include economic fluctuations,
aging populations and medical inflation.
Richard identified the one area which is having a hugely positive effect on the sector, which is
technology. Artificial Intelligence is commonly used in analysing radiology images, chatbots for
diagnosis and patients now wear sensors to detect blood sugar levels, irregular heartbeats. Virtual
Reality is deployed as an immersive tool to help pain management for things such as chronic back
pain and to help ease pain during labour.
Such technological changes are fantastic and are already helping to drive up survival rates and will
continue to do so. In the long term this should bring a cost benefit but in the short term, the
significant investment in health-related technology is driving up the cost of treatments. Richard
commented that although the advancements of technology are positive and very influential, it is
clear that this will not take away the need for human intervention from either healthcare
professionals or increasingly from patient owned care.
Medical insurers are responding positively to the evolving world of healthcare delivery in modern
day society in a number of ways. This includes insurer product design and new / evolving benefit
trends, along with additional value-add services, such as digital and tech services plus flexibility in
corporate benefit policies. Insurers are also embracing the provision of health and wellbeing in the
workplace and how this interacts with insurance policies.
The UK’s health cover market, which encompasses private medical insurance (PMI), dental and
cash plans, is going through a period of notable growth. The market stood at £6.7 billion in 2022,
up 6%, or £400 million in just 12 months. That equated to 4.2 million policyholders and with
additional family dependants covered, a total of 7.3 million lives insured, which is about 11% of the
population. One of the largest insurers, Aviva, saw a notable 41% increase in PMI sales in 2023.
Average annual PMI premiums in the UK sit around £1,250 and are increasing.
Richard turned his attention to Jersey and how global and UK trends impact or relate to the Island.
In comparison with the UK, 30% of the population has access to PMI, whilst the average premium
is also higher, at around £1,750 per person. A recent Jersey Private Patient services strategy
document confirmed the importance of privately insured individuals – both through Corporate PMI
policies and individual policies or self-funding - to the future of the States’ system.
In terms of market share of the local PMI market, AXA Global’s sits around 75%, whilst Aviva
accounts for c.10%, Bupa Global at c.7% with the remainder taken up by a handful of other
insurers. Richard believes that there is room for one or two new PMI providers in the Island with
opportunities to offer flexibility in product offerings in PMI and dental, particularly for smaller
businesses. Whilst PMI is likely to still be the primary benefit businesses look to offer their
employees, Richard noted that there is space for Cash Plans as an alternative lower cost option,
and also the emergence of a new product known as Private Health Insurance, which is positioned
somewhere between a Cash Plan and a more comprehensive PMI plan and effectively provides
access to prompt diagnosis, referral and private treatment for specified conditions.
Fundamentally, greater product choice and flexibility is key for sustainability of the market moving
forward, and Richard noted that the Gallagher team are driving much of this choice by working with
providers to develop new products and modify existing products for the local market.
This includes providers willing to offer group policies for businesses with just one employee, and
greater flexibility to offer Medical History Disregarded (MHD) underwriting - which means an
employee’s pre-existing conditions are effectively ignored – to smaller groups.
Other new and evolving benefits starting to feature in PMI products, which were previously
excluded or not even thought of but have now emerged to reflect modern society, include chronic
condition cover, gender dysphoria / transformation, fertility treatment, proactive health check
benefits and increasing attention on mental health benefits.
Known as the ‘new cancer,’ all PMI providers aim to be market leaders in the provision of mental
health benefits and services. Providers have generally looked to increase their core benefit
allowance for out-patient mental health treatment, expand their benefit wording to now include
cover for previously excluded neurodiversity conditions such as ADHD, autism, dyslexia etc, and
are now typically including additional mental health services such as EAPs and counselling lines
over and above core benefits, to help encourage prevention and early intervention. Richard added
a note of caution, referring to the increasing cost in delivering these additional services.
Richard also spoke about flexible benefits programmes and the fact that there are now more
clients looking to offer an element of flexibility in their benefits provision. Richard spoke about
evolving flexible benefits technology that can provide that support to smaller clients, or indeed a
more manual approach to creating flexibility in benefits programmes for those groups where the
investment in flexible benefits technology may not be cost effective.
Health and Wellbeing strategy was also discussed and Richard suggested that whilst all clients
appear to acknowledge the importance of having a strategy and initiatives in place, not all clients
have managed to get to that point and clients generally seem to fit into one of these three
categories:
• Well established health and wellbeing strategy, fully resourced and supported throughout the business
• No strategy at all, no resource, no budget
• Very supportive of having a strategy but more sporadic in their approach
Richard noted the importance of seeking help from external consultants such as Gallagher to help
develop a strategy, the availability of resources the business already has access to but perhaps
are not aware, and the importance of asking employees what they want in terms of health and
wellbeing.
The local Gallagher team are well positioned to support clients with all of these needs, with local
healthcare experts in the island as well as the wider Gallagher healthcare team in the UK and
internationally, connecting local clients with world leading technology and advice.