This briefing note provides insights into the year-end 2024 Solvency and Financial Condition Reports (SFCRs) of selected health insurers underwriting medical insurance business in the UK and Ireland.1
In this briefing note, we analysed the SFCRs of the UK and Ireland’s health insurers that primarily underwrite private medical insurance (PMI) business. We included the following insurers in our analysis based on the selection criteria defined in the Appendix:
UK insurers:
- AXA Health UK (AXA PPP)
- Bupa Insurance Limited (BINS)
- Vitality Health Limited (Vitality Health UK)
- Western Provident Association Limited (WPA)
Ireland insurers:
- Irish Life Health DAC (Irish Life Health)
- Vhi Insurance DAC (Vhi Insurance)
Several UK-domiciled medical insurers also underwrite international PMI (IPMI) within their UK solo entities. Aviva has been excluded due to the significant proportion of its business in non-medical lines. In the Irish market, we have excluded Laya Healthcare. Layla Healthcare was previously underwritten by Elips Insurance Limited but following acquisition has been underwritten by AXA Insurance DAC since 1 January 2025. The 2024 data is included in Elips Insurance Limited’s SFCR, which is regulated outside of Ireland. Level Health launched in the Irish market in November 2024 as a joint venture with Aviva Ireland. The majority of Aviva Ireland’s gross written premium (GWP) is derived from other non-life insurance lines.
Gross written premium
Figure 1 provides an overview of the GWP for selected insurers in financial year (FY) 2023 and FY 2024.
Figure 1: Reported total gross written premium (GWP) per FY 2024 as an amount (in £ billions for UK and in € billions for Ireland)
| COUNTRY | INSURER | GWP 2024 [1] |
GWP 2023 [2] |
ACTUAL CHANGE [3] = [1] − [2] |
PERCENTAGE CHANGE [4] = [1] / [2] − 1 |
|---|---|---|---|---|---|
| UK | BINS | 3.54 | 3.04 | +0.50 | +16.4% |
| AXA PPP | 1.95 | 1.93 | +0.02 | +1.0% | |
| Vitality Health UK | 0.74 | 0.65 | +0.09 | +13.8% | |
| WPA | 0.18 | 0.16 | +0.02 | +12.5% | |
| Total | 6.41 | 5.79 | +0.62 | +10.7% | |
| Ireland | Irish Life Health | 0.72 | 0.66 | +0.06 | +9.4% |
| Vhi Insurance | 1.89 | 1.69 | +0.20 | +11.6% | |
| Total | 2.61 | 2.35 | +0.26 | +11.0% |
There has been an approximately 11% yearly increase in GWP in each of the UK and Irish markets. The UK market saw a £0.6 billion rise in GWP since 2023, whilst the Irish market recorded a €0.3 billion increase over the same period. BINS remains the leading PMI insurer with the largest market share in the UK, as measured by GWP. BINS is followed by AXA PPP and Vitality Health UK. In Ireland, Vhi Insurance continues to dominate as the largest domestic medical insurer.
Combined ratio
Figure 2 summarises the combined ratio, which is calculated as the ratio of the sum of expenses incurred, claims incurred and the change in technical provisions (TP) to the earned premiums, all including any assumed reinsurance and net of any outward reinsurance.
Figure 2: Evolution of combined ratios
The combined ratio improved by an average of approximately 11 percentage points (ppts) for AXA PPP, WPA and Vhi Insurance in 2024 compared to 2023.
Vitality Health UK observed an increase of about 10 ppts in the combined ratio from 2023 to 2024. Vitality Health UK commented in its SFCR2 that this was primarily driven by increased claims utilisation and higher operating expenses. The report added that continued strain on the National Health Service (NHS) led members to access more private healthcare services, particularly general practitioner (GP) consultations, through their insurance, contributing to elevated claims costs. Additionally, strong new business growth resulted in higher acquisition expenses. Vitality Health UK also commented that the adoption of IFRS 17 resulted in the derecognition of the asset for deferred insurance acquisition cashflows as insurance contracts are recognised; the company rendered its financial reinsurance treaties previously used to offset new business strains inappropriate, and hence, they were cancelled. These factors, combined with the broader economic uncertainties, contributed to the deterioration in underwriting performance.
BINS observed a modest increase of 1.7 ppts in the combined ratio from 2023 to 2024, mainly driven by an increase in claims incurred due to significant growth, a changing mix of business and inflationary impacts, as well as the return of premium provision release, as commented in its SFCR.3
In contrast, AXA PPP and WPA in the UK reported a reduction of approximately 10 ppts in their combined ratios between 2023 and 2024. In its SFCR,4 AXA PPP noted that ‘Following a material change in risk profile in 2023 due to a significant increase in claims experience, AXA Health has recovered to expectations in 2024, delivering profitability as planned. Management actions to mitigate the heightened risk in 2023, has included substantial new claims cost management and pricing initiatives. Recovery of profitability is expected to continue into 2025 and the view remains that claims frequency is not expected to return to pre-COVID 19 pandemic levels.’ Similarly, WPA stated in its SFCR5 that 2024 marked a return to equilibrium for the business following a challenging 2023 characterised by high claims volumes and insurance losses. The growth in customer numbers also contributed to greater economies of scale and supporting business stability.
In Ireland, Vhi Insurance observed an 11-ppt reduction in its combined ratio between 2023 and 2024. In its SFCR,6 Vhi Insurance attributed this to an increase in premiums across health insurance plans during the year and a small growth in PMI membership. These price increases were necessary to address the ongoing rise in healthcare usage and related costs. Claims rose, including a 12.5% increase in private hospital claims costs, while operating expenses remained largely stable year-on-year.
Irish Life Health, on the other hand, experienced a 3-ppt increase in its combined ratio from 2023. Although the company also recorded an increase in premiums over the year, this increase was lower than the increase in premiums for Vhi Insurance. Additionally, Irish Life Health faced higher relative claims. Together, these factors led to an increase in their combined ratio.
The results between Irish insurers may not be directly comparable because different treatments of premium, claim and expense cashflows possibly exist, as reported in the Quantitative Reporting Templates (QRTs).7
Irish Life Health, on the other hand, experienced a 3-ppt increase in its combined ratio from 2023,The results between insurers may not be directly comparable as different treatments of premium, claim and expense cashflows possibly exist, as reported in the QRTs.
Solvency coverage ratio
Figure 3 presents the Solvency Coverage Ratio (‘the ratio’) for the companies in our sample over the past three years. As of year-end 2024, the weighted average ratio for the UK insurers included in our analysis is 172%, up from 161% at year-end 2023. In contrast, the ratio for the included Irish insurers shows a modest increase of 2 ppts from year-end 2023. Solvency coverage ratios can change year-on-year for a variety of reasons, including changes in the underlying risk profiles of the business, levels of risk appetite and effectiveness of capital management strategies.
Figure 3: Solvency coverage ratio of the selected insurance entities
The data indicates that the ratios have increased for all health insurers in the UK and Ireland since year-end 2023, with the exception of BINS. This increase was mainly driven by improved underwriting performance compared to 2023. Additionally, AXA PPP’s solvency coverage ratio benefited from a capital injection received in February 2024, as highlighted in our previous report.8
BINS’s ratio decreased from 196% in 2023 to 174% in 2024, primarily due to a rise in SCR driven by growth in actual and projected business volumes, which in turn increased underwriting and operational risk. While the company’s Eligible Own Funds grew to £586 million (2023: £573 million), this increase was offset by dividend distributions of £118 million during the year.
Solvency Capital Requirement (SCR)
The Standard Formula Solvency Capital Requirement (SCR)9 as of 31 December 2024 for the UK-based companies was largely driven by health underwriting risk, followed by market risk and operational risk. Similarly, in Ireland, health underwriting risk was the largest contributor to the SCR, with operational risk and market risk following. These risk exposures in both countries are partially mitigated by diversification benefits and the loss-absorbing capacity of deferred taxes (LACDT), which together reduce the overall SCR.
Figure 4: Breakdown of Solvency Capital Requirement (SCR) under the Standard Formula of the selected insurance entities – UK and Ireland
Assets
As shown in Figure 5, the overall asset mix of insurers has remained relatively stable since 2022, with investments consistently making up the majority of total assets in both markets.
Figure 5: Asset mix of health insurers by year – UK and Ireland
In the UK, at an aggregated level, the proportion of assets held in investments increased by 2 ppts since 2023. Aside from this increase, changes in other asset categories were relatively minor, with small declines seen in ‘Cash’ (−0.5 ppts), ‘Other assets’ (−1 ppt) and ‘Reinsurance recoverables’ (−1 ppt), suggesting a gradual reallocation of assets over time.
At an aggregate level in Ireland, the proportion of assets held for investment purposes decreased by 1 ppt compared to that of 2023, with a corresponding increase in allocations to ‘Other assets.’
Figure 6: Asset mix of selected health insurers by year – UK and Ireland
Investments accounted for more than 75% of total assets across insurers in all three years, with the exception of Vitality Health UK and Irish Life Health.
In the UK, on an individual insurer level, WPA and Vitality Health UK stand out in 2024 for holding a significant proportion of Deferred Tax Assets (DTA), a feature not as prominent in the portfolios of other insurers. Additionally, ‘Reinsurance recoverables’ have reduced for Vitality Health UK by 5 ppts from 2023 to 2024 due to cancellation of financial reinsurance treated with effect from 1 July 2023.
Investments
In both markets, bonds (corporate and government) and collective investment undertakings (CIUs) account for the majority of investments, exceeding 80% in 2024. In the UK, there was a noticeable shift in preference towards corporate and government bonds, with a corresponding reduction in allocations to CIUs compared to 2023. Conversely, in Ireland, there was a shift towards corporate bonds and CIUs, accompanied by a decline in government bond holdings. The proportions of deposits, equities and ‘Other’ investment categories remained largely stable, with equities and other investments, including collateral, continuing to represent a relatively small portion of the overall portfolio.
Figure 7: Investment mix of selected health insurers by year* - UK and Ireland
*The ‘Others’ category of investments comprises collateralised securities, derivatives, holdings and properties.
Note: For this analysis, we have not considered ‘Cash’ in the investment mix. Deposits refer to ‘Deposits other than cash equivalents.’
Figure 8 presents a breakdown of these investment patterns by insurers in the UK and Ireland from 2022 to 2024.
Figure 8: Investment mix of selected health insurers by year - UK and Ireland
Liabilities
As shown in Figure 9, as expected, TP represent the largest portion of total liabilities for both UK and Irish insurers analysed over the years. In the UK, there was a 3-ppt reduction in TP compared to 2023 levels, while levels remained unchanged in Ireland. For BINS, the reduction in TP was offset by an increase in ‘Other liabilities,’ whereas for Vitality Health UK, AXA PPP and WPA, it was offset by an increase in ‘Payables.’
Figure 9: Liability mix of selected health insurers - UK and Ireland
Figure 10 presents all liability categories for the health insurers analysed separately in the UK and Ireland from 2022 to 2024. Notably, WPA experienced a significant reduction in non-life TP in the UK, falling by more than 26 ppts from 2023, primarily driven by business growth, with insurance revenue increasing by 16% compared to the prior year. In 2024, payables represented a significant portion of total liabilities: approximately 75% for WPA and 70% for Vitality Health UK. For Vitality Health UK, this balance primarily includes Insurance Premium Tax (IPT) payable on written premiums during the April–June 2024 quarter, which is expected to be settled shortly after the reporting date. In contrast, WPA recognises its payables at amortised cost under the effective interest rate method, which is considered to materially reflect their economic value. The timing of these cashflows is important when assessing the SCR.
In Ireland, there was an approximately 10-ppt increase in ‘Reinsurance deposits,’ accompanied by a decrease in ‘Payables’ observed under Irish Life Health. This suggests a change in the way these items are presented in the SFCR.
Figure 10: Liability mix of selected health insurers - UK and Ireland
What’s next?
Milliman has developed an interactive application to efficiently compare the metrics of insurers as disclosed in their QRTs. If you would like free access to this tool, please follow the link https://apps.nl.milliman.com/uk-ireland/health/info or contact Joanne Buckle.
If you have any questions or comments on the information above or want to discuss further capital management solutions for health insurers, please contact your usual Milliman consultant.
Appendix
The selection criteria used to determine the scope of inclusion are defined below:
- We include Solvency II-regulated UK and Ireland’s solo insurance entities classified as non-life or composite insurers.
- We include entities that underwrite, primarily or materially, medical expense and/or private medical insurance (PMI) line of business (at least 90% of gross written premiums).
- We exclude insurers that sell high volumes of products in other lines of businesses, such as motor insurance or property and casualty (P&C) insurance (e.g., Aviva in the UK), because it is not possible to isolate the capital charges for PMI or Medical Expense line of business alone based on the information included in the QRTs. This rule was applied as a first-pass filter in order to remove a large number of companies that are not predominantly health insurers.
- Where solo entities are part of Solvency II-regulated group undertakings, we ensure there is no double-counting by only including their solo entities’ SFCRs and related data.
- We exclude companies where business falls within ring-fenced funds, which restrict Own Funds to the total Solvency Capital Requirement (SCR) value (e.g., Exeter Friendly Society in the UK).
1 The data analysed in this note has been sourced from the data tool by Solvency II Wire Data Limited (Ltd.), which contains comprehensive information from the QRTs. The data is available on https://www.solvencyiiwire.com/solvency-ii-wire-data-demo/.
2 Vitality Health Limited. (n.d.). Solvency and financial condition report for the year ended 30 June 2024. https://www.vitality.co.uk/media-online/presales/vitality-health-limited-solvency-and-financial-condition-report-2024.pdf.
3 Bupa Insurance Limited. (n.d.). 2024 solvency and financial condition report. https://www.bupa.com/~/media/files/b/bupa-v5/documents/financials/regulatory-reports/2024/bupa-insurance-limited-solvency-and-financial-condition-report-31-december-2024.pdf.
4 AXA Health UK. (n.d.). Solvency and financial condition report 2024. https://www-axa-com.cdn.axa-contento-118412.eu/www-axa-com/e93f668b-d77c-4809-87a8-57140adf9e77_axa_sfcr_2024_va.pdf.
5 WPA link page with the SFCR report for the year ending 31 December 2024. https://www.wpa.org.uk/about/corporate-governance.
6 Vhi Insurance DAC. (n.d.) Solvency and financial condition report 2024. https://www.vhi.ie/downloads/solvency-and-financial-condition-report-2024.pdf.
7 We observed differences in the QRT cashflows in the treatment of risk equalisation scheme (RES) cashflows between Irish Life Health and Vhi Insurance.
8 Buckle, J. et al. (2024). Analysing 2023 solvency and financial condition reports (SFCRs) of health insurers in the UK. Milliman. https://uk.milliman.com/en-GB/insight/2023-sfcr-health-uk.
9 AXA PPP UK has been excluded from this section because it uses an internal model to estimate its capital requirement.