“It will only last a couple of weeks”, “we’ll be back to normal by the summer”, “Ooooh working from home for a couple of weeks, I’ll save a bit of money on the commute”! A snippet of our thoughts just over 12 months ago as the up to then unknown grim reality of the COVID-19 pandemic and its life changing effects started to emerge…
Then a couple of months into the first wave, the sad realisation that we were in for a long bumpy ride started to sink in and for the health insurance sector it started to become clear that private healthcare was not going to be available in its full capacity for some time (due to private hospitals being utilised by the NHS to strengthen its capacity in the fight against the virus).
At that time, some of the leading insurers in the private healthcare market advised that they were looking into introducing measures to ensure that they will not make any undue profit in the event of a reduction in paid claims due to the impact of the pandemic.
As the months went by and it started to become ever more apparent from analysis collected that claims utilisation had significantly reduced and full year results were likely to finish notably lower than they were originally forecast to be, it was time to act!
So what are insurers doing?
Providers are sticking to their word and starting to give back to their customers in the form of premium rebates and credit.
In fact, WPA were the first provider to act as they actually provided credits and rebates to their customers as early as May 2020! This proactive approach naturally went down very well with WPA customers and now other providers are starting to follow suit…
Bupa will be starting to contact it’s customers from the first week of April, with the expectation that most customers will see a rebate of approximately one month’s premium. All UK health insurance customers who paid a premium between 23rd March and 30th September 2020 are eligible for the rebate. This includes active and lapsed customers with payments being made between April and the end of July 2021
Cigna has also recently started contacting its customers to confirm what their rebates will be (these rebates are based on each specific scheme basis and structure).
In relations to offering a premium rebate, at this point in time Vitality Health are taking a prudent approach and continue to monitor the situation carefully with the view to making a more long-term decision. However, at the start of the pandemic last year, Vitality responded by offering a range of new benefits such as an enhanced Cashback Benefit of up to £500 per day for those who are hospitalised due to Covid-19 (subject to a limit of £5,000) as well as offering increased access to their digital healthcare services – including virtual GP consultations, remote mental health and physiotherapy and remote specialist consultations.
Elsewhere, as things stand, whilst they are also still both very much committed to making no undue profit from COVID-19, as per Vitality’s stance, Aviva and AXA PPP are taking a longer-term view on the current situation before they act with no plans to offer a credit or rebate to their customers in the imminent future. Both providers also provide digital healthcare services – including virtual GP consultations, remote mental health and physiotherapy sessions.
Whilst the confirmed rebates will obviously come as very welcome news for many businesses, and whilst there is a visible glimmer of light shining at the end of this long dark tunnel, sadly the pandemic is by no means over yet and a great deal of uncertainty remains around the overall impact of the pandemic, and in relation to Private Medical Insurance claims there is a strong likelihood that 2021/22 will see significantly higher than usual claims due to the delays in planned treatment taking place since the first wave began, therefore some businesses may want to reserve any rebate given against the possibility of a higher than usual premium increase at the following renewal.
Alternatively, businesses could consider using their rebate to invest back into the health and financial wellbeing of their staff by putting it towards implementing other Employee Benefit products that they may not currently have, such as a Group Income Protection, Group Life Assurance, or a Group Critical Illness policy.