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Gross written premiums within the private medical insurance department amounted to GBP3.65 billion in 2012, recording increase of 3.2% from 2011, and a compound annual rate of growth (CAGR) of 2.47% during the review period (20014–2017).Favorable developments in premiums belie the underlying trends in demand, however.
at one's discretion insurance product, supplementary to free-to-access healthcare through the National Health Service (NHS), the number of private medical policyholders has been subject to a downwards trend since 2006 and hit its shortest level on record in 2012, at 5.6 million.
Factors driving the apparently shift in attitudes included improved levels of contentment with the NHS, raised public healthcare spending, and deterioration in labor market conditions.The marketplace for private medical insurance is dominated by four insurers – Bupa, Axa, Aviva and Prudential – which have a combined with market share of 92%.
Despite this concentrated market, a lack of competition between private hospital operators has restricted insurers' bargaining power and resulted in inflated claims costs.
Coupled with the decline in client numbers, this has been the highest driver of premium growth as insurers competent to drags on profitability by growing prices for clients.The consumer shift away from private medical insurance is unlikely to be absolutely reversed.
Nevertheless, favorable forces will underpin a modest CAGR of 2% for gross written premiums over the forecast period (2013–2017).
