Rising demand for private health insurance in the UK

Worries over NHS waiting lists contributed to a 41% growth in policy sales, which contributed to £1.5bn operating earnings.

Amidst near-record NHS waiting lists, the demand for private health insurance in the UK has surged, driving annual profits at Aviva and highlighting a growing trend among individuals and businesses.

Increased Sales and Profits

Aviva, the UK’s largest general insurer, reported a remarkable 41% increase in health insurance sales in 2023 compared to the previous year. This surge in demand contributed to a 9% rise in annual operating profits, reaching £1.5bn, surpassing analysts’ expectations.

Individual and Business Demand

According to Aviva’s Chief Executive, Amanda Blanc, individuals and businesses alike are turning to private health insurance as NHS services face ongoing challenges. 

Individuals, recognizing the strain on the state health service, are opting for private cover, while businesses are increasingly providing health insurance as an employee benefit.

Expansion of Coverage

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Aviva’s health insurance business has seen notable growth, with small employers offering coverage to their staff and larger companies expanding their benefits packages. 

Add-on provisions, such as digital GP services, are becoming more popular, providing convenient access to healthcare professionals through video consultations and text.

Market Position

With approximately 1.2 million people covered by Aviva health policies, the insurer ranks as the third-largest player in the UK market, trailing behind Bupa and Axa. 

The company’s robust presence underscores the significance of private health insurance in the current landscape.

Factors Driving Premiums

Premiums for private health insurance have increased due to rising medical costs, which are climbing by 8% to 10% annually. 

Aviva has managed to mitigate some price hikes through long-term contracts with hospitals. Additionally, customers are making more frequent claims, ranging from low-cost treatments like physiotherapy to more expensive procedures such as surgery.

Looking Ahead

As the demand for private health insurance continues to grow, insurers like Aviva are poised to play a crucial role in providing healthcare solutions to individuals and businesses alike. With ongoing challenges in the NHS, private insurance offers a valuable alternative for those seeking timely and comprehensive medical care.