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News Brokers mourn departure of Groupama from UK PMI industry


Brokers have expressed grave concerns about consolidation in the SME private medical insurance (PMI) market following the acquisition of Groupama Healthcare by Simplyhealth, announced as Health Insurance went to press. The deal, set to be completed in


the next three to six months, will see Simplyhealth become the fifth largest player in the PMI market, gaining 4,500 schemes and 88,000 members. Groupama Healthcare is the UK’s eighth largest specialist health insurer and has built up a strong reputation for customer service with SME brokers. François- Xavier Boisseau, chief executive at parent company Groupama Insurances, said the business had been unable to achieve the critical mass necessary to ensure profitability. Wayne Jackson, sales and marketing director at national intermediary Premier Choice Healthcare, was among the brokers “bitterly disappointed” by the news. “Groupama will be greatly


missed,” he said. “Here is an insurer with a slick operation that has pushed hard against the tide to bring claims transparency out into the open.” Karen Gamble, director of health


and wellbeing at consultancy Gallagher Employee Benefits, said


Groupama had fallen victim to its forward-thinking approach. “We got a lot of declinatures and


they asked far too many questions,” she said. “If every other insurer did it, you would get a really good price for risk but they have been too ahead of their time. They were too transparent, too risk aware. They have acted as a proper medical insurer should and they have fallen over themselves.” Gillian Campbell of Medisave, a specialist intermediary in Northern Ireland, expressed concern about another exit from the market. “Such consolidation restricts


choice and causes major upheaval for existing customers, as shown with the PruHealth/Standard Life Healthcare merger,” she said. “Buying other providers to increase market share might look good in business terms but in my opinion it is a cop out. What it says to me is that Simplyhealth either can’t be bothered or do not have the nerve or vision to use the money they have spent buying Groupama to develop new policies to bring to market.” Jack Briggs, intermediary sales and


marketing director at Simplyhealth, said that by acquiring scale the insurer could enjoy more success in controlling escalating costs. However, he said that brokers would have to work with


insurers to create a more sustainable SME PMI market and prevent other providers from going under. “We have to get a handle on


operating costs and do what we can on the tariff piece but intermediaries have to help us on the premium piece,” he said. “Premiums need to match risk and we can’t work with them with unsustainable levels of commission requirement.” Intermediaries needed to reward


those providers that invested in customer service, he said. “It’s all very well to say ‘there


goes another excellent provider of intermediary service’ but if it is not being supported then there are consequences to everything,” he said. Brokers told Health Insurance


that they sought “meaningful dialogue” with insurers about how to restore sustainability to the market. Gamble, who has seen price increases of up to 25% on her SME PMI book, said there would be “no simple answer” to the problems that led to Groupama’s departure. “There is distrust, mistrust


and a distinct feeling of cynicism between intermediaries and insurers,” she said. “We must work closer together if we are to bring affordable and sustainable products to our market.”


HI


NHS REFORMS ‘WILL HIT BUSINESSES’ Senior HR and finance professionals in the UK’s largest businesses expect reforms to the NHS to hit their corporate balance sheets dearly. Almost half (47%) of respondents to a study carried out by London South Bank University predict an increase in per-employee health benefit costs resulting from government health reforms. Just 4% think the reforms will result in a decrease. The survey, sponsored by health solutions company vielife, also found that there is too much focus on cutting public spending rather than improving public health, according to 30% of survey respondents.


GPs WARY OF FIT NOTE Half of Britain’s GPs say the new fit note system has not enhanced their ability to help people keep their job during an illness, according to research from Legal & General. A similar proportion (47%) also disagree that the new system gives them a clearer role. The fit note was introduced by the last Labour government to assess what people can do rather than what they can not. Training for GPs is still being rolled out.


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