Health Shield announces strong results in a competitive market

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Health Shield – one of the UK’s leading corporate health cash plan providers – continues to confound the market after increasing gross annual premium income to over £25 million in another year of strong organic growth.

Despite difficult economic conditions, the Society has maintained momentum in executing its ambitious expansion plans, once again recruiting over 40,000 new members to the organisation in 2011. It has also successfully increased both its contribution income and margin, resulting in a surplus of over £5.7 million after taking into account the movement in its long-term business provision.

In addition, Health Shield has nearly doubled its contribution income over the last 10 years and has seen the number of members increase by over 100,000. During the last three years, it has achieved growth in market share, while significantly enhancing its reputation amongst peers and intermediaries in the health cash plan sector.  More importantly, the Society has increased the level of free assets considerably over this period to remain in a very strong financial position.

Despite difficult trading conditions, which have resulted in other health cash plan providers struggling to increase turnover, Health Shield’s earned premiums rose by 10 per cent in 2011.  It also recorded the highest ever annual figure for new members – this increased to 44,743, building on the previous record of 43,909 new members for 2010.

Company-paid health cash plan solutions continued to record strong growth, including Tailored scheme bespoke offerings and off-the-shelf Essentials and Essentials Plus sales. The organisation also made good progress in the Flexible benefits market, with the overall number of new group schemes increasing by 61 per cent to 422 new corporate client wins.

Jonathan Burton, Chief Executive at Health Shield, commented: “Health Shield has seen unprecedented growth, both in its membership levels and its turnover. This has not been achieved by accident – it has been brought about by investing in our staff, who have demonstrated absolute commitment in helping to grow the organisation. This is not purely in terms of numbers, but also in the way we are regarded by our members.

“2011 also saw the Society receive the coveted ‘Best Health Cash Plan’ award at the Health Insurance Awards for the first time. To receive market-wide endorsement for our achievements, including an industry award, is really the icing on the cake. We firmly believe that the foundation of our success lies in a market-leading product portfolio, coupled with exceptional levels of service from the dedicated Health Shield team.”

Customer care surveys continue to highlight extremely high levels of member satisfaction, with 99 per cent of members stating that they are happy with the Society’s service level standards regarding claims payments.

In 2011, the number of claims paid increased by 6 per cent to 374,356 in line with the significant membership increase. In the last year, the non-profit making Friendly Society paid out 75 per cent of its net contributions back to members in the form of benefits. This figure is both sustainable for the Society and still significantly higher than many of Health Shield’s competitors.

Burton added: “The Society has entered a new chapter in our exciting progress – and our dedicated team continues to develop further service and product improvements, while remaining loyal to our not-for-profit Friendly Society values.”

The 2011 annual results also revealed that Health Shield increased overall active membership by a further 16 per cent and now provides cover to over 140,000 members. As a result, it has further increased its market share and provides cover to 20 per cent of the company-paid market.

In the last 12 months, significant improvements have also been made to risk management procedures and the Society now has a documented Risk Management Framework and Policy.  In line with this, it has developed detailed risk appetite statements which, in conjunction with the Society’s new dashboards, will help to monitor risks. Despite Solvency II being put back until 1 January 2014, Health Shield is in the process of developing its own capital model, which will assist the organisation with strategy and business planning. Furthermore, the balance sheet strengthened at the end of 2011, with total assets under management increasing by 4.1 per cent to £52.6 million.