UK employers are facing soaring private medical insurance (PMI) premiums, according to Aon.
The global professional services company has warned that PMI rate rises are averaging 18.8%, compared to 9% in 2022, because of market pressures.
Aon believes the increase is being driven by a combination of factors, including that the number of employees joining PMI schemes is growing. Another factor is that one of the biggest medical insurers has left the market, as well as the fact that more new joiners making claims from day one.
Chris Simmons, chief broking officer, Health Solutions UK, Aon, said: “Previously, it would have been possible to broker a favourable price by analysing needs, reviewing the market and potentially switching providers, but many providers are at full capacity due to the growing demand and there are fewer savings to be made. Our guidance to employers is to discuss this early with specialist consultants and consider all options to mitigate any impact and make better decisions.
“We are seeing far greater use of private medical benefits, which is also shown by digital general practitioners (GPs) experiencing a 50% utilisation, leaping from 15% in 2022. Traditionally, NHS GPs refer further treatment through the NHS. However, people who use a digital GP are automatically referred to private medical care.”
Aon is now encouraging HR and finance professionals to start conversations early so that these issues can be addressed.
Rachel Western, principal, technical team, Aon UK, added: “HR and finance teams are likely to have different approaches to this problem, with HR having a responsibility to employee wellbeing, attraction and retention, while finance has a responsibility to reduce premium costs in an economically challenging period. There are actions they can take to help the problem – benefit redesign, different funding options and focusing on a preventative health strategy to bring down claim costs.
“Our recommendation is for HR and finance teams to bring each other into the conversation in order to consider both the strategic and health needs of the organisation and build a more resilient workforce.”