HM meets…Nathan Irwin

WPA CEO Nathan Irwin had been in post a matter of months when the Covid-19 pandemic forced the shutters down on access to private healthcare, but he says the not-for-profit insurer’s quick decision on rebating premiums proved the right call. He talks to Maria Davies about WPA’s approach and how it is growing the business with a focus on wellbeing and prevention

Nathan Irwin already had big boots to fill when he took over the reins of WPA from veteran CEO Julian Stainton, who had served 32 years with the not-for-profit health insurer, at the end of 2019.

Then came Covid. And as the shutters came down on private healthcare Irwin and his colleagues were faced with the unenviable decision of what, when and how to compensate customers who were no longer able to access the healthcare benefits they were paying for.

In common with other insurers, WPA decided the answer was a rebate. The difference – and one perhaps driven in part by the fact that Irwin was group finance director for six years before becoming CEO – is that it made the call and the payments within weeks rather than years.

According to Irwin, however, this should not have come as a surprise. WPA has always put customer before profit. ‘It’s part of our DNA’, he says.

Rebates aside Irwin’s task has been more about raising the company’s profile than it has about transforming internal culture.

‘Julian was such a character and he’d been brilliant for WPA but he has quite a different style to me and that created an opportunity for me to put my stamp on the business,’ Irwin tells HM. ‘It’s been a privilege to take over and adapt the business in a way that I think is fitting for WPA’s future.’

Part of that future-proofing has been about realising potential. Customer retention and product innovation aimed at prevention and wellbeing have helped the business grow by 30% over the last three years.

HM caught up with Irwin to find out how he is leading the company through the challenges of the 2020s and his thoughts on the outlook for PMI and the private healthcare market.

What were your main priorities when you took over as CEO at WPA?

We’ve spent a lot of time working on being able to articulate what WPA does and how we do it and we can characterise that in one sentence: we treat our customers as would wish to be treated ourselves. That’s not a culture that I’ve set. It was that way for years before I joined. But by spending a bit more time communicating that outwardly, it’s enabled us to gain traction and that comes through in the growth that we’ve experienced.

In the past, we were quite content with how the business was performing and I’ve taken a more outwardly facing perspective and sought opportunities to tell people about WPA and what we do.

The Covid pandemic hit just four months after you took over as CEO. What challenges did this bring and how did WPA respond?

The government announced it was effectively requisitioning private hospitals at the end of March 2020 and all elective work going through private facilities stopped almost immediately. I was really proud that by the end of April we’d rebated to our customers 40% of April’s premium. So, within four weeks, we’d done what the next insurer took two years to do.

I think that was a real demonstration of our values. We put our customers first and that showed that we were prepared to put our money where our mouth was. We did another rebate eight weeks later at the end of June. A demonstration of our values, our culture, and also reflected what was happening in reality – it gave our view on how we thought the market would be impacted during the remainder of 2020 and we got it about right.

We didn’t wait to see what the answer might have been and going through that decision making process in a very short period of time was probably the biggest challenge – not whether we should do it, we knew it was the right thing to do, but it was a big judgement to decide how much within such a short timeframe.

There has been increasing interest in PMI over the last couple of years. Do you think people recognise the value of private healthcare now more than before the pandemic?

Definitely. And I think, unfortunately, that is the result of the position the NHS is in. The impact that has triggered is two-fold. First, people and businesses are asking themselves whether they will be able to get care in the NHS should they need it and that encourages PMI purchasing. But people are also thinking more about private care because of the backlogs in the NHS. Rather than waiting, they are being far more proactive than they were pre-Covid. What we are seeing is an acceleration in people seeking treatment early in their journey, which in contrast to the NHS experience enhances the value of private healthcare.

There are indications that PMI is attracting customers who are new to the idea of private healthcare. Is that WPA’s experience and where is demand coming from?

We’ve seen increased demand within the retail sector from individuals, but where we’ve seen the largest increase is in the corporate setting. There are two key drivers for that – one is the NHS but the other is the state of the UK labour market. The number of vacancies at the end of December last year was 50% higher than it was pre-Covid and many organisations are doing what they can to keep hold of their people. We’re seeing organisations extend and expand coverage. Health benefits improve staff retention and in the face of inflationary pressures, are another way of enhancing remuneration.

In terms of those new to PMI, we’re certainly seeing private healthcare transition from being a luxury product to something more akin to a necessity.

What is WPA doing to ensure its products remain relevant to a new and potentially younger group of customers?

It is not just younger customers who are new to PMI but if we do look at those younger subscribers, it’s the value point that is most important. Often we have observed young, fit and healthy people not recognising the value in PMI, but with the inclusion of mental and life stage health support, this is starting to change.

In terms of product innovation, you’ve got to capture those younger people who are thinking about PMI where there are key life determinants, such as becoming a parent, which act as inflexion points.

We ensure that we offer value for all ages. Last year, we launched a product called Life Stage Health that enables people to get help, not because they are ill but because they are going through life’s natural stages – so it provides help with menstruation, help with prostate checks, help with contraception and sexual health concerns.

What we are trying to do is to introduce an element of prevention and that is good for the individual and, at a corporate level, good for the organisation. PMI then starts to become perceived as valuable because even if you are young and healthy you can see the merit of visiting the dentist or discussing a sexual health concern.

We’ve also worked with organisations to develop benefits for gender dysphoria, neurodiversity and fertility. These have been areas of product development that also make PMI far more relevant to younger generations.

Another area of innovation has been in the methods of interaction with our customers. Many people still want the reassurance of speaking to a compassionate, empathetic person at the end of the phone if they are going through a difficult health event. But increasingly, in the younger age groups, we are seeing a preference for digital interaction. I believe our digital claim capability is already market leading and we are planning more development this year that will significantly increase our digital capability.

Has Covid been the catalyst for product innovation or was PMI already moving deeper into that wellbeing and prevention space?

I think it was starting to happen pre-pandemic. Personally, I think one of the biggest catalysts for change has been increased levels of awareness around menopause. It’s become obvious to employers that looking after women as they go through the perimenopause makes as much sense for the business as the individual. Women of a menopausal age are typically at the senior stages of their career. They are at their most valuable so why wouldn’t you invest in them?

Certainly for us, that has been the catalyst for product development around people’s life stages.

Insurers spend all this time working out the risks of a plane landing on a building and other operational risk calculations for Solvency II and yet until recently spent very little time supporting female colleagues through something we know is going to happen. I’m pleased that we’ve been able to play a small role in removing the taboos around this subject, in both our organisation and our customers.

The cost of healthcare provision is rising and has been exacerbated by rising inflation and a tight labour market. At the moment, insurers appear to be having some success demonstrating the value of PMI, but is it going to become increasingly expensive in future?

I think the key driver of premium inflation is going to be increased utilisation – at least in the short term. We’re already seeing that customers are using their policies more than they did pre-Covid, mainly because of the difficulty of access into the NHS.  Whereas perhaps previously customers would have been referred by their GP on to secondary care in the NHS, what we’re seeing now is customers immediately being referred into a private secondary care setting. That’s certainly been a key change that we’ve observed in our business – it’s the number of claims that are currently driving premium increases.

Insurance premiums have been rising but WPA has so far shunned the approach adopted by other PMI providers to introduce products which restrict choice. Is that something you are sticking by?

We still don’t think that is the right choice medically. It is a cost driven decision and we pride ourselves on putting our customers first and that’s what our customers want. This became quite apparent during Covid when we started to see supply open up again. Because our customers could see anybody, anywhere, we were able to facilitate their access to care. There has been a marginal lengthening in waiting times for insured patients in some elective specialties, but because our customers aren’t restricted, they have far more flexibility to access the care that they need.

One of the main advantages of being insured by WPA is that because we are not-for-profit we can offer what’s best for our customers, without shareholders to worry about.  The absence of profit from our objectives enables us to provide policies that offer good value, good benefits, good coverage and are sustainably priced.

In your opinion, what is the outlook for private healthcare?

I think the outlook for the private healthcare market, not just private health insurance, is really optimistic. The combination of increasing insured patients and a growing self-pay market should in time generate more supply. That’s a good thing for everybody because if it can take pressure off the NHS, it’s positive for those who don’t have access to private healthcare. But it will also increase the value proposition for insured patients because an increase in supply will help moderate future premium growth associated with more people utilising their policies on a more regular basis.

What are your priorities for the next 12 months?

As a company first and foremost, it’s to maintain that market leading service that we’ve got at the moment. We aim to keep our digital services in the industry vanguard, whilst continuing to answer 90% of our phone calls within a couple of minutes. Clearly, there is a healthcare market that’s going through a lot of transition at the moment, some really strong growth in private healthcare and underlying cost inflation. So, our priorities as a business are to manage through that phase of transition, but with a really optimistic outlook as to the value WPA will provide for our customers going forward.