However that does not mean specialist intermediaries should feel an additional threat to their businesses, participants said. Representing the Association of Medical Insurance Intermediaries, Mike Izzard said mortgage brokers, for example, are going “all out” to generate income from PMI.
“Now, should specialist healthcare intermediaries feel threatened?” he asked. “I don’t think so. It is a sure opportunity, a partnership. They could either mentor them or have an introducer arrangement in place. There is a huge opportunity for non-specialist PMI brokers to get into the market. I believe they will grow the market because they have generic client bases they have held for years and probably those people have not been exposed to PMI before or they may buy it direct from an insurer.”
Stuart Scullion of The Private Health Partnership said that any specialist intermediary “worth his salt” should be able to “knock a generalist into a cocked hat”.
“It is actually quite a complex market,” he said. “It is a difficult product to get your head around and a general broker is unlikely to have either the breadth of agencies or the detailed product knowledge to genuinely say to his or her client that he or she is independent, that they are doing a full market review for the client and so on. My experience has been that they will go to two or three insurers, they will put them on the table and if that does not fit then it does not happen.”
Simplyhealth’s Jack Briggs said it would be “interesting” to know how many of these newcomers to the PMI market are actually “quality selling organisations” and how many of them are “basically just content to be price comparators”. “If they are just going to be price comparators I would suggest that the specialist PMI market is probably getting pretty close to saturation,” Briggs said. “The PMI market is pretty saturated at the moment and if new brokers believe they can genuinely come in and drive up demand for PMI then great, that will be a very positive scenario. But if all they do is basically emulate a kind of price comparison service then I think there will be troubled times ahead.”
Participants in the debate expressed concern that an unhealthy amount of rebroking is currently taking place in the PMI market as intermediaries and insurers seek to hold onto business and as customers seek to drive down costs.
“Is there more broking going on? Absolutely,” said Jack Briggs of Simplyhealth. “I’ve been told on some schemes that brokers are competing with two, three, sometimes even four other brokerages. Every large corporate scheme that would normally review every three or five years seems to be up for tender at the moment.”
The effect of that, of course, is to put an additional administrative strain onto intermediaries and insurers. While rebroking forms an important part of the intermediary’s service to their client, the panel agreed that excessive rebroking is self-defeating, adding costs to the process and negating any discount secured in the short-term.
The encouraging news for the market is that the more responsible intermediaries and insurers are not participating in what Stuart Scullion of The Private Health Partnership described as a “Dutch auction”.