PMI Article (June 2010)

Private Medical Insurance � Why Use a Consultant?

For organisations that already offer the benefit of group private medical insurance (PMI) to their employees, or indeed those organisations that are considering doing so, the market remains an ever evolving and complex one.

It is therefore vital that cover is regularly reviewed and tested against other products in the market to ensure continued best value and suitability. Reviewing and comparing medical cover can be both time consuming and challenging, and whilst the largest organisations may possess the expertise and experience internally, the majority of organisations do not have the necessary resources.

In general the PMI market does not operate a dual pricing policy. That is to say, an employer should pay no more for PMI when buying via a broker, than if going direct to the product provider. Indeed, some insurers will not allow a group scheme to be set up directly with them, preferring to work via a third party to ensure there is good understanding and communication of the policy. This would not apply to the largest corporate organisations.

Another point to consider is that at a time when high corporate governance standards are pre-requisite, owners, directors and managers are more aware of risk mitigation. Taking on the responsibility of selecting and recommending a scheme could represent unnecessary time and risk.

When a �whole of market� adviser is tasked to review, provide advice and manage the process it is likely to stimulate a more competitive environment resulting in reduced costs and the refinement of benefit levels. In addition the involvement of an experienced adviser will ensure that the scheme is tailored and therefore most suited to the particular needs of an organisation and its staff.

One of the key components of cost within the PMI market is the effect of medical inflation which generally rises at about 8% per annum, in some part due to medical advances in treatments and drugs. Medical inflation is likely to continue to increase and therefore to have a significant impact on the overall cost of PMI. Regular reviews will help to manage the cost, enabling an understanding of how the total cost is allocated to particular elements.

The Cartlidge Morland 10 Stage PMI Audit

Understand the strategic and business/HR objectives of the organisation
Discuss and establish budget requirements
Review current arrangements (if applicable)
Discuss PMI requirements/scheme design
Undertake a �whole of market� review
Produce executive summary report and recommendations
Present findings and recommendations
Agree final scheme structure, costs and implementation timescale
Implement communication strategy
Establish administration procedure and future review dates

Cartlidge Morland is an independent employee benefits consultancy. We provide benefit services to a wide range of partnerships, family companies, PLCs, charities and governmental organisations. We also provide financial advice to private clients, investment management and mortgage broking services

Phone us on 020 7709 5560 or complete the online contact form