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The State of the Industry

  • Tom Sackville
  • Insights

Health insurance is a strange business. It is an industry on which commentators, and politicians and even its own contractors and customers like to attack whenever it suits them.

The main accusations seems to be unjustified price rises: this is unfair, in that most insurers operate on ultra low margins: health inflation is actually caused by doctors, hospitals and pharma, apparently immune from any blame, and regulators, whose expensive interference is not generally understood.

It is often alleged that “we pay in year after year, getting nothing in return, but when we need to claim you try to avoid paying”. This ignores the fact that an insurance policy is a contract, to which two parties commit themselves, with the limitations of benefits set out in detailed rules. Customers may be tempted to fain ignorance of any such concept, and have rarely acquainted themselves with the terms of the contract until its various restrictions become apparent following a claim.

We need to recognise that as health insurers we will rarely get the credit for efficiency and provision of outstanding care, or for providing a comparator and stimulus for moribund and dysfunctional public services.

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