Oliver Crawford

By Oliver Crawford

Private Medical Insurance (PMI) - a sector that has been growing in popularity in recent years - is the latest sector where Fairer Finance has rated customer experience. You can see our ratings here.

Our customer experience ratings compare how providers treat their customers. They are designed to encourage firms to compete on more than price. They look at four measures:

  • Customer satisfaction - how happy customers say they are with the service they receive from their provider

  • Customer trust - how much customers say they trust their provider

  • Complaints performance - how many complaints are upheld against a provider by the Financial Ombudsman Service

  • Transparency - how clearly a provider explains and signposts key information about their products on their website and in their documents

How does private medical insurance compare to other insurance sectors?

In February 2023, we polled thousands of insurance customers to ask them how satisfied they were with their provider and how much they trusted them.

PMI customers had similar levels of happiness and trust to customers for other types of insurance. They tended to be less happy than car and home insurance customers but happier than travel insurance customers.

Most PMI customers were either 'fairly satisfied' or 'extremely satisfied' with their provider - the same pattern of responses found in all insurance sectors.

Younger PMI customers tended to have higher satisfaction levels than older customers, though the difference was not particularly large. This gap is to be expected, given the higher premiums paid by older customers.

Overall, there was no great divergence between PMI and other insurance sectors in terms of customer happiness and trust.

At a provider level, we use customer responses to create a 'happiness score' and a 'trust score' for each provider. These are calculated using the following formulas:

Happiness score (participants are asked how satisfied they are with their provider):(Extremely satisfied * 2) + (Fairly satisfied) + (Fairly dissatisfied * -1) + (Extremely dissatisfied * -2) / Total / 2
Trust score (participants are asked to what extent they agree that they trust their provider): (Strongly agree * 2) + (Agree) + (Disagree * -1) + (Strongly disagree * -2) / Total / 2

We use these formulas to give additional weight to customers who are extremely satisfied or extremely dissatisfied, and to create a single score to compare providers.

The provider that scored best for both customer happiness and trust was Freedom Health. Axa, Aviva, Bupa, Saga and Vitality were also above average on both measures. National Friendly, health-on-line and The Exeter were below average.

The top score for happiness (Freedom Health - 64.48%) was below the score of the top performing provider for happiness in car insurance (NFU Mutual - 80.14%) and home insurance (Ecclesiastical - 77.63%). This indicates that health insurers, though similar on average to other insurance sectors for customer satisfaction, don't get the very highest marks.

Complaints performance

When it comes to complaints referred to the Financial Ombudsman Service, health insurers have a relatively low proportion of complaints upheld against them, compared to the average for all insurance complaints.

This may be because health insurance policies are relatively clear on what is and isn't covered, leaving less room for dispute around claims than other types of insurance.

Transparency

In our analysis of online applications for health insurance we looked for:

  • Whether providers made it clear that premiums could rise over time

  • Whether providers explained why they asked questions about the applicant's health

  • Whether hospital options were offered clearly and fairly, with information on the coverage and limitations of each option and an interactive map of nearby hospitals

  • Whether add-ons were offered clearly and fairly, with information on what each option covered and did not cover

  • Whether providers made it clear that pre-existing conditions might not be covered

  • Whether cover limits for out-patient treatments were made clear

  • Whether excesses were clearly displayed

  • Whether customers could easily access an IPID and policy document

  • Whether customers were automatically opted in to marketing

  • Whether there is an 'Mx' or 'Other' option for customers when inputting their personal details

  • Whether websites were easy to use - this means whether they had a large font, simple language, no accessibility issues (such as colour contrast issues), adaptability for mobiles, and a webchat that directed customers to a human agent

We also assessed policy documents against our criteria, marking them for the ease of understanding their language and the clarity of their design. Our guide on clear communication for the Association of British Insurers gives a sense of what we look for here.

No provider met all of our transparency criteria, though some did better than others.

In our view, more could be done to warn customers about potential premium rises and to make sure that they understand pre-existing conditions may not be covered (for example, by making applicants tick a box to confirm that they understand this). When providers do ask background health questions, for example whether the applicant smokes, they should clearly explain why they are asking this. Some providers also opt customers into marketing automatically, which we consider bad practice.

We're always keen to get feedback on our transparency methodology, since we want it to be fair to providers as well as informative for customers. To contact us to give feedback, or to find out how your company performed in greater detail, please email corporate@fairerfinance.com.