NHS crisis triggers private health insurance explosion: Aviva chief Amanda Blanc reports ‘very strong demand’ for cover

Insurer Aviva is cashing in on the NHS’s dire state after signing up 170,000 private health insurers over the past year.

The FTSE 100 company said its health insurance sales rose 58 per cent to £86 million, boosted by “the current strain on public health services”.

“Clients are afraid they won’t be able to access health treatments when they need them, they don’t want to have to wait long,” said CEO Amanda Blanc.

Official figures from this month showed that the NHS waiting list for routine operations in England has risen to a record high of 7.6 million.

Last week, the boss of French insurance giant Axa said the crisis facing the UK healthcare system would create “quite a few business opportunities” for private health insurance.

Blanc said Aviva now has more than 1 million customers.

Susannah Streeter, head of money markets at Hargreaves Lansdown, said: ‘It’s not surprising given the tales of misery over NHS backlogs and continued strikes by staff over pay and benefits disputes.

“It is clear that many more people are willing to pay to have the peace of mind that support will be available if they become ill.”

But it hasn’t been smooth sailing, as unprecedented demand has caused customer wait times to lengthen, Blanc said. She said service levels are expected to return to normal by the end of this year as more staff are recruited.

Aviva reported a better-than-expected 8% rise in operating profit to £715m for the first half of the year and increased its dividend by 8%, sending shares up 0.9% or 3.3p to £383.2 pence.

It estimated full-year earnings growth at 5 to 7 percent. AJ Bell’s director of investment, Russ Mold, said: ‘A large increase in demand is a useful driver for the company – due to the large NHS backlog.’

Aviva was helped by a 13 per cent rise in general insurance sales in the UK and Ireland, including home and motor cover, to £3.22 billion, boosted by price increases.

Aviva Wealth performed mixed as workplace pension products performed well, but there was a 51 per cent drop in net flows to £1.2 billion for its investment advisor platform.

Blanc said, “Aviva consistently delivers strong and profitable growth.

In the first half of 2023, we increased revenue, operating profit and dividend for our shareholders.

“Our excellent trading momentum is a direct result of the decisions we’ve made over the past three years to refocus.”

The results come after activist investor Cevian, who held a large stake and pressured Aviva to deliver more returns to shareholders, sold most of his stake this year.

That was seen as a vote of confidence in Blanc’s strategy, as Aviva bypassed a number of overseas companies.

Blanc added that the company was “far from believing we’ve achieved what needs to be done” with “much more for us to go after.”