A new report has revealed that comparison services continue to play a major role in how consumers select their private health insurance policies.
The fifth annual report from the Private Health Insurance Intermediaries Association (PHIIA) revealed that comparison services accounted for the sale of almost one quarter of the sector's policies, which in the last financial year totalled 834,000.
The results were pooled by hospital tier, customer type and age from PHIIA members, including iSelect, Compare the Market, Health Insurance Comparison and The ItsMy Group.
The association said that while a record 11.2 per cent of enquiries were converted into sales the number of leads fell due to economic uncertainty and a deferred round of premium increases.
The respondents reported helping 1.7 million consumers, down almost 20 per cent from the previous survey, but sales fell only by four per cent due to the higher conversion rate.
Of these sales, 29 per cent were to new market entrants, with 64 per cent under the age of 40. Overall sales in the 30-54 age bracket increased and represented 49 per cent of all business.
"It's pleasing to note our members have bucked a trend of several years with us seeing increased sales to younger and mid-aged consumers and who represent a larger proportion of total sales," said PHIIA CEO Christopher Zinn.
New to market customers were most likely to choose bronze plus policies, with this product tier making up one-third of all sales.
Among those switching their cover, one-third were for silver plus products. PHIIA said this suggests consumers continue to downsize from gold-level policies in 2021-22.
Sales of gold policies overall dropped by more than 30 per cent to account for just 5.8 per cent of policies sold. However, there was significant uptake of gold policies in younger brackets, with over a quarter of all gold tiers sold to those aged 29 and under.
"We believe that as in 2021, the purchase of Gold tier products by younger cohorts is again most likely largely driven by the need for these people to have access to psychiatric service," said PHIIA chair Gerald Brown.
The average Gross Annual Premium (GAP) for combined hospital and extras cover was $3,976 (up 1.9 per cent), while hospital-only policies were $2,980 (up 3.4 per cent). Extras only cover increased 1.8 per cent to $1,082.
"In what may be a strategy to cope with cost pressures, consumers are opting out or reducing the level of extras cover in combined policies to make hospital cover more affordable in a period of high inflation," said Mr Zinn.