Excessive AXA health insurance premium increases

aroominyork

I am in correspondence with AXA about our health insurance premiums, which are rising excessively. As background:

• We have been with AXA since 2018 (possibly earlier)
• I am now 64, OH is 68
• In 2021 we moved to the guided option, meaning we have a shorter list of consultants to choose from
• My wife was diagnosed with cancer in February 2023 and has been claiming in each policy year since
• Our no claims discounts steadily rose 67%/2018, 70%/2019, 72%/2020, 74%/2021, 76%/2022, 77.5%/2023. Mine then rose to 79%/2024, 80%/2025, proposed 80%/2026 (I assume 80% is the maximum), while my wife’s fell to 72%/2024, 63.5%/2025, proposed 50%/2026.
• Our combined premiums rose from £2398 in 2021 to proposed £10,648 in 2026.

I queried this with AXA, asking for a breakdown of how the policy is calculated. They sent a thorough reply, explaining that the base premium is increased annually on age, longer lifetimes, treatment advances, inflation, changes to IPT etc. The quoted premium is then adjusted for NCD, adding one step up to a maximum if there have been no claims and reducing three steps if there have been claims. The type of claim and amounts claimed are not taken into account, nor is the diagnosis. Hence, our base premiums have been increased annually by the same percentage as each other (there is no apparent difference in base percentage increases due to our difference in age) and then decreased by an increasing NCD for me and a decreasing one for her. AXA provided clear annual figures to corroborate this.

So far, so fair (it seems?). My issue with AXA is the level of the base rate increases. They were 31% in 2022, 19% in 2023, 23% in 2024, 24% in 2025, proposed 25% in 2026. This makes a 200% cumulative increase in five years. At the five year average of 24.6% the base premium would more than double every three years.

ChatGPT suggests the typical UK PMI annual increase is in the range of 5% to 12%.

These increases are becoming unsustainable. I would appreciate other forumites’ insights on this.

MyRealNameToo

How are you calculating the base rate? Are you losing sight of the adjust for your age increases?

The problem is that the two will compound so if the "base rate" is increasing by 12% and the age component is increasing by 10% points then you are increasing at 23.2% per year. As you get older then the age component will accelerate quicker.

Unfortunately yes, PMI often becomes unaffordable for those that self fund rather than getting it as an employee benefit in later life

aroominyork

AXA has clearly laid out the base rate for each year, which they describe as based on age, longer lifetimes, treatment advances, inflation, changes to IPT etc. What you consider base excludes the age component; for AXA, base includes the age component.

MyRealNameToo

https://forums.moneysavingexpert.com/discussion/comment/82013032#Comment_82013032

They are already showing more than most do but unless you have friends who are you clones other than being 1 year younger you won't be able to unpick what is being driven by the true base moving (inflation, change in treatments etc) and what is personal (eg age)

Im guessing "base" therefore isnt the base at all but simply the premium before NCD so other rating factors may be impacting it… at least from every insurer I've done pricing for they had a true seed premium which then other factors applied a multiplier to like age, gender, postcode etc.

Pricing is typically an important commercial secret and hence for anyone with exposure to customers its normally a black box so they can't see how the pricing is done even if they wanted to.