Like many aspects of the UK economy, group private medical insurance has experienced cost increases over the past five years, particularly since the global pandemic. In 2025, many organisations are reporting annual premium increases of around 20%, while others are facing hikes of 50% or even exceeding 100%, particularly where claims activity has been high or where workforce demographics are influencing risk. With medical inflation continuing to rise and the NHS struggling under sustained pressure, employers are having to rethink how they get real value from their group private medical insurance schemes.
This dramatic shift has changed the way many UK businesses approach renewing premiums. Employers who once accepted modest year-on-year increases are now pushing back. Rising costs mean there’s no such thing as a straightforward renewal anymore, and expectations have changed.
Although price sensitivity is high, most employers remain committed to providing health coverage for their staff, recognising that the impact of denied or delayed care, particularly in the face of long NHS waiting times, can harm employee well-being, increase absenteeism, and affect productivity. For now, most employers are keeping schemes in place, but they’re also looking for better solutions.
Some are opting for more focused plan designs. Instead of offering broad and expensive coverage across all treatment areas, they’re choosing policies that prioritise quick access to diagnostics in areas where delays most often impact staff absence and productivity. Others are working closely with brokers like us to analyse scheme usage and adjust cover to match what employers are actually using rather than what looks good on paper.
What’s driving these price hikes?
Several interwoven pressures are pushing premiums up. First, there’s the growing cost of healthcare itself. Diagnostics services, cancer treatments and musculoskeletal procedures have all become more expensive. Combined with healthcare workers and treatment costs rising throughout the health sector, insurers are inevitably having to pass the extra cost onto employers.
Another major factor is the fallout from the pandemic. With NHS waiting lists still at record highs, more people are turning to private healthcare to avoid long delays. That increased demand has led to a surge in the number of claims being made, particularly in diagnostics, oncology, and orthopaedics.
Employers are seeking smarter, cost-effective solutions
At Anderson Health, we’ve seen first-hand how these pressures are reshaping the market. Businesses no longer want blanket cover that fails to reflect the needs of their workforce; now they want to know what they’re getting for their investment. Increasingly, we’re seeing employers ask: Is this plan delivering real value? Is it helping staff stay healthy and return to work quickly? Can we redesign it to be more cost-effective without compromising on care?
At Anderson Health, the answer to all those questions is yes, with the right approach. The market is shifting. In the past, many employers accepted whatever renewal quote they were given. Today, smart businesses are asking for transparency. They want to understand why costs are rising and how to manage them without stripping away meaningful benefits.
That’s where our advisory role becomes critical. We support our clients with clear, honest renewal advice, explaining what drives premium increases, the options available to control them, and how to ensure employees still receive meaningful support when needed.
There’s growing interest in more targeted, efficient approaches. These include “pathway” models that direct care through trusted, cost-effective providers, virtual GP services to help reduce unnecessary claims, and digital triage tools that signpost early intervention.
The good news is that group PMI doesn’t need to be an all-or-nothing conversation. With careful planning, schemes can be redesigned to keep costs under control without cutting support. It’s about being precise with cover, understanding your workforce’s needs, and building in the right kind of support around the core insurance policy. That’s exactly the kind of work our Health Insurance Brokers do at Anderson Health.
Ready to rethink your group PMI strategy?
If your group health policy is up for renewal or if your costs have recently jumped, now is the time to rethink your approach. We can help you review your current scheme, benchmark it against the broader market, and design a package that delivers value for both your business and your people.
Contact our team today and start reshaping your approach to group private medical insurance.
Anderson Health are independent Private Medical Insurance advisors based in the city of London with customers both in the UK and throughout the rest of the world.
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