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Insurer rebates: A welcome windfall

Insurer rebates: A welcome windfall

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Background
In the early days of the pandemic, as it became clear that private healthcare was not going to be available for some months (with private hospitals seconded to the NHS to boost capacity in the first wave), the main insurers in the market all confirmed that they would take steps to ensure they’d not make any undue profit from the impact of the pandemic, should claims overall be reduced.

It became rapidly clear from the management information that the impact was significant, with claims really taking a dive during the second quarter of the year, resulting in many schemes sitting with a large surplus on fund.

Most of the insured market was understandably conservative when considering rebates, with the expectation that claims would stabilise and delayed treatment take place over a period of time, and this was proved sensible as we saw claims beginning to climb from that point, returning to usual levels or higher for many schemes.

WPA took a more proactive approach, however, and provided credits and rebates to clients as early as May 2020, when the reduced claims experience started to come through.

What’s new?
Other players in the market are now starting to put their money where their mouth is. Cigna has already started contacting clients to confirm what their rebates will be (these are bespoke from scheme to scheme), and Bupa will be starting to contact clients next week, with the expectation that most clients will see a rebate of approximately one month’s premium.

Aviva and AXA Health are still committed to making no exceptional profit from COVID-19, but are currently sticking to their approach of taking a longer-term view with no plans to make a rebate imminently.

So what next?
These rebates will no doubt come as very welcome news for many businesses. The fact still remains that 2021 could see higher than usual claims due to delayed treatment taking place, therefore some businesses may want to reserve any rebate against the possibility of a higher than usual premium increase at the following renewal.

Alternatively, companies could consider re-investing their rebates in wellbeing activities for staff. As an example, companies could consider offering one-off cancer screenings to employees who have perhaps missed a routine NHS screening, or not seen a doctor about concerning symptoms, due to the pandemic.  Our World Cancer Day blog  provides some background and context.