Could the Insurance Industry give the NHS the injection it needs?

If the British public are becoming increasingly worried about the NHS; it goes without saying that this could present an exciting opportunity for the protection and health insurance industries. Yet any re-positioning must acknowledge that this remains – fundamentally – a hugely sensitive subject both culturally and politically in the UK

A recent YouGov survey carried out by FirstAssist Insurance Services discovered that 48 per cent of the British public believe that NHS services are going to get worse in the next 12 months. The same proportion believe that the State will be unable to sustain NHS spending in its current format.

More specifically, just under a third of people believe that the NHS will not be able to provide timely access to a specialist, worry about the time it may take to get treatment and to get medical conditions diagnosed.

None of this will surprise anyone working in the insurance industry but it is not so much a case of whether the industry should react – of course it should if it cares about its customers and their concerns – the big question is how?

Any adjustment is arguably easiest for brokers and advisers. They will be well aware that the value which employees and employers place on group PMI is sure to grow as worries about the quality and extent of state healthcare provision increase.

The ‘sell’ gets considerably easier. It may also come in handy for advisers aiming to make the case for PMI when faced with employers looking to divert some resource to pension auto-enrolment compliance.

For other protection products, it certainly doesn’t undermine any of the key arguments either. More financially resilient consumers are better able to pay for extra help and ancillary treatments that may not be offered by the NHS. It also strengthens the case for insurers which offer additional support (such as Red Arc) with both brokers, advisers and their clients.

However, where it may get a little more complicated is in the policy area. The NHS is going to be a huge political factor in the next election (probably second only to the economy as the hot issue) despite the ring fence on spending.

Many voters are nervous about the reforms to the NHS – there has been a huge internal reorganisation and a dramatic increase in private sector involvement in the provision of NHS services, but the ‘free at the point of delivery’ principle has not been challenged.

If that is too hot a potato for all the political parties, then for the insurance sector to be seen on the wrong side of that ‘free at the point of delivery’ argument may not be a very comfortable place to be. Arguably that applies even if firms and industry leaders believe that a more radical shift in thinking is the only way to cope with demographic and financial pressures and seemingly ever-increasing demands on the service.

We think demonstrating an awareness of consumers’ and clients’ concerns in marketing and sales processes, complemented by products that may address some of the core worries about the NHS (about minor treatments, for example) represents the best response.

On the broad policy issues, such as moving to a social insurance system, the industry might offer ideas about how they could support alternative systems. But our instinct would be to steer clear of advocating change itself. That sort of decision is best left up to politicians and the voters to decide, especially when the next election looks like being a particularly nasty one.

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