AXA PPP buys L&G's PMI

Legal & General has sold its private medical insurance (PMI) business to AXA PPP healthcare, Health Insurance can reveal.

L&G said that a review of its general insurance business had shown that growth in healthcare had “not kept pace” with its "core household business".

The insurer has been providing PMI for more than 10 years and last summer made a bid to grow the individual and SME market with the launch of a new plan for sale by intermediaries called HealthCare Choices. Since then it has chased market share with an aggressive pricing strategy.

However, a spokesman for L&G confirmed that the insurer will close to new PMI business at the end of this month. It will process any new applications received between now and then until the end of March. Existing policies will cease to be renewed from July 2 and be transferred to AXA PPP.

A spokesman for AXA PPP said that “in the vast majority of cases” this will enable existing L&G policyholders to be covered on an AXA PPP plan with “comparable benefits” to those of their L&G plan.

“In cases where this is not possible, customers will be offered the nearest equivalent AXA PPP healthcare plan,” he said. “In all cases this will happen with continuation of their existing personal underwriting terms.”

That means that AXA PPP will not be asking L&G customers to provide it with new medical history information or to be newly underwritten.

The AXA PPP spokesman continued: “Where L&G business has been introduced by an intermediary, we will also be contacting the intermediary to inform them of our agreement with L&G and with details of how L&G customers can maintain their cover.”

The deal enables AXA PPP, Britain’s second largest medical insurer, to eat into the market share of BUPA, the country’s largest.

L&G, meanwhile, will continue to focus on its household business. It is currently involved in one in nine mortgage transactions in Britain. It is unlikely that the sale of the PMI book will have an impact on its other employee benefits businesses, a spokesman added.

Staff at L&G have been informed of the sale, although a spokesman declined to confirm if there would be any job losses as a result of it.

The Health Insurance Magazine: 16 February 2007