PMI coverage, claims, and pay-outs hit record high, highlighting vital role of insurance in supporting public and economic health

The Association of British Insurers (ABI) have reported that a record 4.7 million people were covered by Private Medical Insurance (PMI) through their employer in 2023– the highest amount in over 30 years of data collection. Could PMI coverage be the key to revitalizing the UK workforce and boosting economic output?

According to data from the ABI, the overall uptake of both individual and workplace policies increased by 7% in 2023, with 411,000 additional people covered in 2023 compared to 2022. 

The ABI states that this brings the total number of people covered to 6.2 million, all of whom benefit from access to expedited diagnoses, high-quality treatment for health conditions, and preventative care to help avoid the development of serious health issues—all arranged via their insurance.

The number of claims across individual policies and workplace schemes also rose by 21% to 1.7 million, with claims made on workplace schemes being the main driver, up 26% to 1.3 million. 

The total paid out on PMI claims also rose by 21% to hit a record £3.57 billion- the equivalent of £9.8 million per day across 2023- whilst pay-outs for workplace policies increased by 26% to £2.27 billion. 

The record-high levels of PMI coverage, claims and pay-outs in 2023 underscores the growing demand for medical insurance, and the vital role it can play in supporting the public health, relieving pressure on the NHS, and facilitating economic growth.

The correlation between the health of the UK population and economy is clear; as ill-health and long-term conditions amongst the public have increased, so have levels of economic inactivity and rates of workplace absenteeism and presenteeism.

Currently, a record 9.4 million people across the UK are economically inactive, with 2.83 million people aged between 16-64 out of work due to long-term health conditions. In turn, this has seen increased spending on sickness and disability support, additional costs for businesses, growing pressure on an already strained public healthcare system, and reduced overall economic output.

Exclusion from the workplace can also have wider implications, adversely impacting individuals’ mental and physical health, financial security, and damaging social inclusion.

Indeed, data from the ONS reveals that 1.35 million (53%) of those economically inactive due to long-term sickness reported that they had depression, bad nerves, or anxiety in Quarter 1 2023, with the majority (over 1 million) reporting it as a secondary health condition rather than their main one.

Moreover, nearly two-fifths (38%) of those economically inactive because of long-term sickness reported having five or more health conditions (up from 34% in 2019), suggesting many have interlinked and complex health issues.

However, it could be inferred that delays in accessing timely diagnoses or treatments through a strained NHS has increased the likelihood of individuals developing additional, related conditions or of existing issues deteriorating. This, in turn, leads to prolonged recovery times and the need for more time- and cost-intensive treatments.

By enabling access to expediated diagnoses, treatment and early medical intervention, PMI could be key to improving the health of the economy via the health of the public. Not only would this relieve the strain on the NHS, but it would ensure individuals were able to recover and return to work sooner.

The availability of preventative treatments via PMI or workplace schemes would also allow a proactive approach to preventing or mitigating health conditions before they develop or worsen, reducing treatment costs, recovery time and contributing to a healthier workforce overall.

PMI policies or workplace schemes can also play a part in incentivising individuals to live a healthier lifestyle via health rewards or discount schemes, improving public health long-term and reducing costs associated with preventable health issues.

The UK’s economic growth and productivity depends on breaking the existing cycle of poor health and inactivity. Expanding access to PMI could be critical to tackling the root causes of economic inactivity, ensuring a more resilient workforce, and bolstering economic output.

As record-high PMI coverage, claims, and pay-outs demonstrate, private medical insurance is not only financial safeguard for individuals’ health and wellbeing but could play a vital role in transforming the health of the nation and economy.