Private health insurance is experiencing a downturn after one of their biggest names; Bupa has seen a drop of 72% in profits in the year 2010. This company had to downsize and lose some of its staff as the UK adjusted to the economic downturn. Consumer numbers fell down even further in 2010 and has contributed to the loss in profitability of this company. As it struggled to cut costs and increase productivity in the year 2010, Bupa increased its profits by 14% but there was not much of a difference to create an impact.
The insurance climate in 2011is relatively good but nothing much of an improvement is expected this year. This is because there is less demand for private health insurance given the fact that many people are jobless and unable to pay for their premiums every month. To make matters worse, many companies are cutting down their staff even further to survive the harsh economic times and many more are reducing their pay to their staff. While the numbers of insured people is set to increase in 2011, it will take a longer time for Bupa to make up for the 72% loss it made in 2010. If the unemployment rate increases, there will be a lot more people without need for health insurance since it is not a basic of life.
