SMEs battling with twice the increase faced by corporates
Private medical insurance (PMI) premiums for SMEs have increased by 10% since 2010, according to analysis conducted by Mercer.
The employee benefits consultancy looked at data from136 SMEs renewing their PMI for 2,275 staff during the first quarter of 2011. The average annual PMI premium per member was £1,532, up from £1,499 in 2010. Per employee, annual premiums have increased by an average of £78. According to Mercer's 2010 Europe-wide survey on employer health benefits, large companies in the UK and Ireland are facing PMI premium increases of 4.9%.
Mercer believes that the increase in premiums for SMEs is driven by factors including a bid by insurers to regain margins eroded during the recession, the rising cost of healthcare and an ageing workforce.
Donna Biggs, principal at Mercer, suggested that employers could extract better value for money from insurers via intermediaries.
"We push our financial advisers for the best deals in our personal life but SME owners seem to largely forget these lessons when assessing PMI for their staff," she said. "Companies should look at their broker and challenge them to see if they are capturing the best deals on the market."
The price of SME PMI has been a hot topic of conversation in the industry in recent weeks following PruHealth's announcement that it was moving to level commission for brokers in a bid to curb rising costs. Look out for our report on this, including broker reaction, online soon.