Aviva offers more companies a cost efficient way to fund PMI

Article date: 25 April 2012

Corporate customers of Aviva’s Optimum PMI healthcare cover now have more choice and control over how their policy is funded, following the introduction of a new type of contract, Corporate Excess.

The new Corporate Excess option offers companies a new way of funding Optimum PMI, with the opportunity to benefit from cost efficiencies previously only available to larger schemes through a Healthcare Trust option.

Companies choosing the new option will have a Corporate Excess set on the policy, from which employee claims are paid. The excess is generally around 80% of the predicted claims fund and is held in trust by Aviva. A claims reserve is calculated on the remaining claim fund which will be used to pay claims if the excess is used in full.

The significant advantage to companies of funding employees’ healthcare cover through this option is that the Corporate Excess amount does not attract insurance premium tax (IPT). Instead, companies only pay IPT on the claims reserve, (typically 20% of the claim fund), plus administration and insurance risk charges1.

Nick Reynolds, head of PMI, Aviva, UK Health, said: “We’re pleased that with the introduction of the new Corporate Excess option on our Optimum PMI scheme, a wider range of employers can benefit from the same cost efficiencies that our larger corporate healthcare customers enjoy.

“We know from our corporate customers that they place a high value on providing health cover for employees, but with economic challenges they increasingly require flexibility in how their scheme is funded, as well as the level of cover offered. The new Corporate Excess funding option has been introduced to help many more companies control their health insurance costs.”                                                         

HMRC have confirmed that employee taxes are charged on the average annual cost of the product per employee, where the corporate excess is held in trust and is not refundable.

Companies with over 250 employees taking out Optimum PMI cover can choose tailored health benefit packages and now have four different funding options: fully insured, cost plus, corporate excess or healthcare trust.


If you are a journalist and would like further information, please contact:
Melissa Loughran
Aviva Press Office 
Telephone: +44 (0)1904 452791
Mobile: +44 (0)7800 691947
Email: melissa.loughran@aviva.co.uk

Notes to editors:

1 The Corporate Excess is set up as a percentage of the notional claims fund. A claims reserve (or stop loss) is then calculated on the remaining notional claims fund amount. Claims payments are taken from the Corporate Excess. If this is used in full, further payments will then be taken from the claims reserve.

If the Corporate Excess and claim reserve are both fully utilised and claims continue, Aviva will cover these costs. If there is any surplus Corporate Excess at the end of the contract period, this must be rolled over to pay for future private medical claims, whether they are through Aviva or a new provider. If the company chooses to cancel private medical cover altogether, any surplus funds must be donated to a charity of the customer’s choosing.

About Aviva

Aviva provides insurance, savings and investment products to 43 million customers worldwide.

We are the UK’s largest insurer with over 14 million customers and one of Europe’s leading providers of life and general insurance. We combine strong life insurance, general insurance and asset management businesses under one powerful brand. We are committed to serving our customers well in order to build a stronger, sustainable business, which makes a positive contribution to society, and for which our people are proud to work.

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