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The head of one of Europe’s biggest insurers, France’s Axa, has said that the deepening crisis facing the UK’s NHS will present “quite a few business opportunities”, as the financial group expands its private healthcare services.
Thomas Buberl, Axa’s chief executive, said in an interview that the group would invest to take advantage of the stress faced by the UK’s state-funded health service.
The company is a leading private medical insurer in the UK and is looking to extend its telemedicine business, where it provides an online conversation with a doctor as an alternative to waiting for a GP appointment, and support services for medical procedures.
Buberl highlighted the threats faced by the UK’s state-funded health service from inflation in medical costs, such as the price of drugs, coupled with a continuing staffing crisis.
“This puts, by definition, the system under strain,” he said, predicting that the demographic challenge would get worse, given that “you don’t have enough inflow into medical professions” to make up for those heading into retirement.
“With what is happening at the moment, probably the first choice of a doctor that is newly qualified, it would not be the NHS,” he said.
The coronavirus pandemic exacerbated the capacity challenges for the NHS. As people struggle to get GP appointments and hospital treatment waiting lists hit record highs, private companies have made inroads.
Amanda Blanc, Aviva’s chief executive, said in May that private healthcare “needs to be seen as a positive complement to the NHS in clearly what are difficult times”, after it took on more than 120,000 new private medical customers in 12 months.
On Friday, the government announced 13 new “one-stop-shop” diagnostic centres, eight of them funded by private-sector capital. Private equity has bought into so-called “insourcing” firms which provide fill-in NHS staffing.
The problems facing the NHS were not short term, Buberl said. “If you look around [to see] where else could you get more staff, you will hit the topic around immigration, which as you know is a touchy topic,” he added.
Similar strains on labour and treatment costs were brewing elsewhere although less glaringly for now, including in the French state-backed healthcare system, he said. This is also likely to encourage a take-up of private coverage in other parts of Europe too, he added.
Axa pivoted in 2020 to focus more on healthcare insurance. The insurer’s half-year results on Friday showed that a rise in private medical claims in the UK had, however, weighed on the profitability of this business. This was offset by strong trading in property and casualty insurance, which helped the company generate €4.1bn in underlying earnings.
Axa also announced the acquisition of Laya Healthcare from AIG’s Corebridge Financial, a deal that should give it a number-two position in Ireland’s private health sector. Acquisitions in the UK would be “difficult” given its significant market share and so the company was focused more on organic growth, he added.
Buberl acknowledged that rising demand would also create a capacity challenge for his business. “Obviously, if there is more usage in the system, it also means that at some points that needs to be reflected in the price.”
