General Insurance Article - Aon says rising costs for PMI could make it an elite benefit

Aon Employee Benefits, says rising costs associated with Private Medical Insurance (PMI) are creating pressure on HR and employers to find extra budget, without seeing any further advantages for staff. This raises the question of whether increases from Insurance Premium Tax (IPT), medical inflation and the impact of high cost cancer treatment will make employers question the affordability of PMI arrangements altogether.

 Rachel Western, principal at Aon Employee Benefits, said: “There is a three-way increase on PMI costs creating an incentive for employers to review funding and administration approaches to help mitigate cost increases without having to degrade benefit levels.

 “PMI is already largely a benefit for higher-paid employees – our concern is that if associated costs continue to increase, it will become even more of an elite offering. Insurance Premium Tax (IPT) has gone up in the last two Budgets from 6% to 9.5% and then to 10%. With IPT at significantly higher levels in some EU countries - in excess of 20% - there is growing concern that further rises may be forthcoming.”

 Employers’ costs are also increasing because of high medical treatment charges, particularly those related to cancer. Additionally, costs from employer-sponsored medical plans are expected to rise; an Aon global survey on medical trend rates estimates that the average cost increase will rise by 9.3% in the UK this year.

 Western advises that Healthcare Trusts have historically been targeted at the larger corporate but smaller corporate schemes should now seriously consider this style of funding. Development of trusts mean they are now easier to administer, making them particularly appealing to companies that do not have the infrastructure to do the work that was once necessary, especially around the provision of trustee services.

Back to Index

Similar News to this Story

Tesla autopilot feature seeks to reduce insurance premiums
The vehicle manufacturing industry is undergoing significant technological change leading to advances in vehicle safety that insurance premiums have y
Old Mutual Wealth to rebrand as Quilter
Old Mutual Wealth have announced that it remains on track to list in 2018. The intention is to complete this listing as early as possible in 2018, sub
Insurers can help educate SMEs about cyber attack risk
With increasing technological advances, the risks surrounding cyber-attacks continue to grow and develop. Small and medium sized enterprises (SMEs) ne

Site Search

Exact   Any  

Latest Actuarial Jobs

Actuarial Login

 Jobseeker    Client
Reminder Logon

APA Sponsors

Actuarial Jobs & News Feeds

Jobs RSS News RSS


Be the first to contribute to our definitive actuarial reference forum. Built by actuaries for actuaries.