Case study | Employee benefits - Private Medical Insurance

Turning a £28,000 PMI renewal increase into a £14,000 renewal reduction

Client overview

Business type

Tech company

Locations

Employees

c. 60 employees

Key outcomes

Transformed a proposed 44% PMI renewal increase into a 22% (£14,000) saving against the current premium.
Leveraged detailed claims analysis and strong insurer relationships to secure a saving for the client within tight budget requirements
Enabled clearer financial planning, freeing up £14,000 of budget that the business could allocate to other priorities.

The challenge

At the first opportunity to review this client’s group PMI arrangement, their current insurer proposed a 44% premium increase, equating to an additional £28,000 in annual cost.

With the business already seeking approvals for other benefit spend, their finance team made clear that such a steep rise would not be supported. Their internal target was for a maximum 10% increase which was a challenging goal in the current group PMI landscape.

The main challenges of this project were:

A proposed 44% increase from current provider that far exceeded the business’s expectation and internal budget tolerances.
The need to reduce the proposed increase by 34 percentage points to meet finance approval thresholds.
A desire to ensure employees were impacted as little as possible by higher Benefit-in-Kind taxation caused by inflated premiums.

Gurdip Memmi
Senior Employee Benefits Consultant

The solution

NFP conducted a comprehensive, data-driven review of the client’s policy and market position. We analysed all available data and gathered ample evidence to dispute the 44% renewal increase on the client’s behalf.

By doing so, we negotiated reduced renewal quotes from both their current and alternative providers. As a result, we were able to far exceed the client’s goal of a maximum 10% premium increase by securing them a 21% reduction in their current premiums with a new PMI insurer, amounting to over £14,000 in freed up budget. This was all done without sacrificing the level of PMI cover enjoyed by their people.

To get the best result for the client, we also:

Challenging the premium increase, presenting a clear and reasoned underwriting commentary to the wider market to contextualise the client’s actual risk.
Leveraging established insurer relationships to signal that the client sought a more sustainable premium, encouraging competitive underwriting engagement.
Negotiating further reductions after first-round quotes were received, driving both current and alternative insurers to reduce their rates even more.
Providing the client with multiple options with new insurers that exceeded their initial expectations, and ultimately saving them £14,000 without sacrificing the level of PMI cover experienced by their people.

The results

For their business

Turned a 44% proposed increase into a 21% saving

Delivered a result that materially outperformed the client’s internal threshold of a maximum 10% increase.

£32,000+ premium improvement secured

Negotiated a new provider rate that delivered a reduction of over £32,000 versus the incumbent renewal quote.

Improved financial planning flexibility

Freed up £14,000 of budget, enabling the business to reallocate funding to other strategic priorities.

For their people

Avoided Benefit-in-Kind tax impact for employees

Prevented unnecessary increases in employee tax liability that would have arisen from a higher PMI premium.

Maintained employee wellbeing commitments

Ensured the provider switch preserved the existing level of PMI cover, avoiding any reduction in benefits for employees.

Is your Group PMI policy meeting the needs of your people?

To find out how NFP can also help ensure your group PMI plan meets the unique expectations of your diverse workforce, get in touch with our dedicated team today.

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