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One promise often made by fintech entrepreneurs is that their innovation and technology will unlock vital financial services for those previously excluded from them. But that pledge isn’t just about giving more people in developing economies access to financial services, important though that is. Fintech can also open up markets in mature economies.

Enter Peachy, a British insurtech provider that claims it can help far greater numbers of people to secure private health insurance. In the UK, the increasing cost of such cover in recent years has put it out of reach of the majority of people – but Peachy thinks it can reverse that trend.

“Traditional health insurance products carry some real structural problems,” says Amit Patel, the founder and CEO of Peachy, who previously worked as a doctor in the National Health Service, as well as in corporate roles at industry giant Bupa. “They are complex, unaffordable and stuck in an analogue world.”

It’s a common complaint. Leading health insurers typically aim their products at older and more affluent customers, with policies covering large numbers of conditions and priced accordingly. It is possible to reduce costs through higher excesses and limiting cover to treatment in certain hospitals or with certain consultants, but flexibility tends to be limited.

By contrast, Peachy’s app-based health insurance is designed to be much more bespoke. Customers get much more choice about which health conditions and treatments they want to insure for, as well as about how and where they would want diagnosis and treatment in the event that they need to make a claim.

The app provides much greater levels of visibility, Patel points out, which is important in an industry often criticised for its opacity. “You can use our app to find out more about benefits and limits, check cover, make a claim and search and contact healthcare professionals near you,” he explains.

Perhaps the greatest point of differentiation is on cost. Individual quotes will vary enormously, depending on the options that policyholders select and the current state of their health. But Patel says that in his case, his most recent quote from Bupa for a basic level of cover came in at around £45 a month; Peachy, meanwhile, quoted him £12.50.

The comparison isn’t entirely fair. Even Bupa’s basic products are bundled, providing a broad range of cover, whereas Peachy’s configurable model means Patel can opt out elements of insurance he feels he doesn’t need. That’s one reason why the cost is so much lower.

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Still, this is exactly the point, Peachy argues. “This is an insurance product that provides only the cover you actually need,” Patel says. “That’s why it is more affordable – you’re not paying for unnecessary benefits.”

That’s fine in theory, but does beg an important question. When it comes to medical matters, do people actually know what they need from health insurance? The danger is that policyholders opt out of certain elements of cover with Peachy in order to keep costs down – only to discover at a later date that they made the wrong decision.

It’s a valid point, Patel says, but Peachy will provide as much information and guidance as possible in order to help customers make the right choices. “We think part of the problem in the health insurance market is that people don’t always understand what they’re buying, so we’re keen to do something about that.”

Certainly, regulators are comfortable with Peachy’s approach. The company has developed its app inside the “regulatory sandbox” operated by the Financial Conduct Authority, which enables fintechs to innovate new products and services up to a certain point without having to seek full-scale regulatory approval.

There is also the argument that this is a product coming along just at the right time. The NHS is creaking under the strain of trying to catch up with treatment backlogs that built up during the Covid-19 pandemic at a time when the UK’s public finances are stretched, depriving it of the resources it needs.

“Wealthier people already have the privilege of choosing whether to seek treatment from the NHS or go to private providers, so we are trying to give more people that choice,” Patel adds.

One area where that could be particularly useful is mental health, where the NHS is finding it especially difficult to keep pace with demand, which has increased dramatically in the wake of the pandemic. “People are becoming much more conscious of their mental health and wellbeing, but getting help can prove very difficult,” Patel points out.

It’s a business model that he hopes will resonate with a broad range of potential policyholders, but particularly with younger generations who have previously considered private health insurance out of their reach. These generations have also become more health aware, Patel argues.

Peachy now has to turn theory into reality. The sandbox arrangement has so far limited the number of customers it can take on, but the company is preparing to commercialise more broadly. It has funding in place for the next 12 to 18 months as it seeks to meet that imperative and develop its service further.

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