NHS crisis sparks boom in private health insurance: Aviva chief Amanda Blanc reports ‘very strong demand’ for cover
Insurer Aviva is cashing in on the woeful state of the NHS after signing up 170,000 private health insurance customers over the past year.
The FTSE 100 firm said that sales of its health cover rose by 58 per cent to £86million, boosted by ‘current pressures on public health services’.
‘Customers are worried that they may not be able to get access to health treatments when they need them, they don’t want to have to wait long periods of time,’ said chief executive Amanda Blanc.
Official figures this month showed the NHS waiting list for routine operations in England has risen to a record high of 7.6m.
Last week, the boss of French insurance giant Axa said the crisis facing the UK health service would create ‘quite a few business opportunities’ for its private health cover.
In demand: Aviva – led by boss Amanda Blanc (pictured) – said sales of health cover rose 58% to £86m amid ‘current pressures on public health services’
Blanc said Aviva now has more than 1m customers.
Susannah Streeter, head of money markets at Hargreaves Lansdown, said: ‘It’s hardly surprising given the tales of woe about backlogs in the NHS and continued strikes by staff in disputes over pay and conditions.
‘Clearly many more people are willing to pay to have peace of mind that when they do fall ill, support will be available.’
But it has not been plain sailing, as unprecedented demand has meant call waiting times for customers have lengthened, Blanc said. She said service levels were expected to return to normal at the end of this year as more staff are recruited.
Aviva reported a better-than-expected 8pc rise in operating profits to £715million for the first half of the year and hiked its dividend by 8 per cent, helping shares climb 0.9 per cent, or 3.3p, to 383.2p.
It estimated full-year profit growth of 5 per cent to 7 per cent. AJ Bell investment director Russ Mould said: ‘A big increase in demand is a useful driver for the business – reflecting the big NHS backlog.’
Aviva was helped by a 13 per cent rise in UK and Ireland general insurance sales, which includes home and motor cover, to £3.22billion, boosted by price rises.
Aviva Wealth saw a mixed performance as workplace pension products did well but there was a 51 per cent fall in net flows to £1.2billion for its Adviser Platform for investing.
Public health crisis: Nurses strike in London at the end of last year. Official figures this month showed the NHS waiting list for routine operations in England has risen to a record high of 7.6m
Blanc said: ‘Aviva is delivering consistently strong and profitable growth.
In the first half of 2023 we grew sales, operating profit and dividends for our shareholders.
‘Our excellent trading momentum is a direct result of the decisions we have taken over the last three years to refocus.’
The results come after activist investor Cevian, which had a major holding and put pressure on Aviva to deliver more returns to shareholders, sold most of its stake this year.
That was seen as a vote of confidence for Blanc’s strategy, as Aviva span off some overseas businesses.
Blanc added that the company was ‘far from believing that we have achieved what needs to be done’ with ‘much more for us to go after’.
