Aviva’s private health cover sales jump 25% as NHS struggles with backlog

UK insurer Aviva reported a jump in sales of its private medical cover on Wednesday, as new data also showed patients have turned to private healthcare in record numbers while the NHS struggles with waiting times.

In a trading update, the FTSE 100 insurance company said its private healthcare sales rose 25 per cent to £33mn in the first quarter of the year as the NHS backlog encouraged more people to go private. 

“Whilst the NHS does a great job for millions of people, there are people who would like to accelerate their treatment, or give themselves that confidence that should something happen to them, they want to have that accelerated treatment,” Aviva’s chief executive Amanda Blanc told the Financial Times. “The volumes are very robust and to be honest we don’t see that changing any time soon.”

Aviva has taken on about 123,000 new private medical customers in the past year, she said. Its products include a virtual GP service that had been attractive to people struggling to secure an appointment with their local practice, she added. 

“I think private healthcare needs to be seen as a positive complement to the NHS in clearly what are difficult times,” Blanc said. Aviva’s health and protection business generated £2.5bn in revenue last year.

The number of people waiting to start hospital treatment hit a record high earlier this month, with figures published by NHS England showing that 7.3mn patients had yet to start treatment at the end of March.

Research released by the independent Private Healthcare Information Network (PHIN) on Wednesday also revealed there were 820,000 UK private inpatient and day-case admissions in 2022, the highest number since the organisation that tracks treatment data began collecting these records in 2016.

The annual total was up 8 per cent compared with the previous year, and represented a 5 per cent increase compared with 2019, the last full year before the Covid-19 pandemic.

More than 200,000 people went private in the fourth quarter of 2022, which also marked a record high for any individual quarter.

The PHIN reported that procedures paid for with private medical insurance reached the highest level since the start of the pandemic. There were more self-pay admissions — where people choose to fund their own healthcare rather than use private health insurance — in 2022 than in recent years.

PHIN chief executive Ian Gargan predicts there will be more than 1mn private sector patients this year and expects private medical insurance to become more popular. “In a cost of living crisis, people still are willing to pay and prioritise their health,” he said.

Gargan believes the main causes behind the increase in demand are public awareness of NHS waiting lists and uncertainty over how long they will have to wait. “People know they may be waiting a long time for a cataract or to have their knee replaced,” he added. “They feel if they haven’t heard from someone for a long time, they’ve been forgotten about.”

Spire Healthcare, a London-listed independent healthcare group, in March reported an 8 per cent rise in revenue in its preliminary results for the year ended 31 December 2022. It said the increase was driven by increased private treatment, with private revenue up by 14.5 per cent. 

Its chief executive Justin Ash said at the time that “last year saw continued change in UK healthcare, with even more people seeking prompt and safe private care”. Spire’s outlook added that inquiries from private patients were ahead of the previous year.

International healthcare company Bupa also reported demand for private health insurance had increased in its full-year results published in March.

Meanwhile, investors were not wowed by the wider first-quarter performance from Aviva, with stormy markets weighing on its wealth business and its solvency ratio coming in slightly below analysts’ forecasts.

It also emerged on Wednesday that Cevian Capital, the activist investor, had sold its entire stake in Aviva, three years after launching its campaign.

The insurer’s shares were down 5 per cent by afternoon trading.