Good morning, everyone. Thank you all for joining us today. It's great to see everyone. So, over the last 2.5 years, we have held 6 in-focus sessions, giving you deeper insights into our businesses. Today, we're back with health. When we speak to investors, health as a business always generates a lot of interest, particularly given our strong growth in this business. We have consistently highlighted the huge opportunities we see in health, and in line with our capital allocation framework that I walked you all through at the full-year results in March, we've been investing in this business. We're delighted to share with you today why we believe it's a fantastic business, its importance to Aviva, and why we expect to see continued strong growth and performance here. I'm joined today by Doug Brown, CEO of IWR, and Steve Bridger, Managing Director of Health.
They're going to take you through the detail of the business and why we're confident for the future. And of course, there'll be time for Q&A at the end. So, without further ado, I'll pass over to Doug to get us started.
Great. Thank you, Charlotte. It's great to be here today. I'm really excited to tell you more about our health business. I'm going to start with a high-level view of the business and how it fits into our portfolio before passing over to Steve, who'll give you more color on the drivers of our performance and the segments that we play in. I'll then close by telling you how we're going to bring it all together for our customers. Before we get started, I'd like to share today's key messages. Health is a key business for Aviva. It's high-performing with strong growth and profitability, and it's important for our strategy. We're playing in a structurally attractive market that has experienced accelerated growth post-pandemic. We expect this growth to persist, with a real opportunity for Aviva to capture more share.
We have leading propositions, and we are benefiting from our diversified business mix and Aviva's group model. We're confident for the future with an ambition to deliver GBP 100 million operating profit by 2026, which represents strong growth from where we are today. Now, let me start with how health fits in and why it's an important business for us strategically. As you know, in IWR, we serve almost 12 million customers across the range of insurance, wealth, and retirement, delivering almost GBP 1 billion in operating profit for the group. Health plays a critical role as part of our insurance proposition. It's of fundamental importance to all of our customers and to the whole U.K. population. There is a real opportunity for us here.
Health is also a core component of our strategy as we accelerate growth in capital-light areas, drive customer acquisition, and seek to serve more needs of our customers. So, it's a clear fit for us and a key contributor to IWR and the group. Turning next to the growth opportunity in health, which is material, and we're really well placed to capitalize on it. Since the pandemic, private healthcare has been playing an increasing role. We've seen accelerated growth of high single digits, and the market is now worth over GBP 5 billion. And importantly, this growth is expected to continue. Aviva is a strong number three player with scale from over GBP 860 million of in-force premiums. And since the last in-focus back in 2021, we have been outgrowing the market and translating this growth into the bottom line.
As you can see, health is contributing materially to our strategic delivery. For example, with 1.2 million lives now insured, we're bringing valuable customers to Aviva's franchise and deepening our existing customer relationships at the same time. With a strong business today, we have big ambitions, as you would expect. As I've said, we're already delivering consistently strong performance with double-digit top-line growth since 2020 and a low-90s combined ratio, against a backdrop of persistent inflation and evolving customer behaviors. It's this performance that gives me real confidence in our ambition. Looking forward, we aim to deliver GBP 100 million in operating profit by 2026, underpinned by continued top-line growth and maintaining that strong combined ratio. Importantly, we're investing in the business to support our trajectory and to continue delivering value for our customers. So, that's the high-level view.
I'll now hand over to Steve, who'll go under the hood of the business and give you a bit more color. Over to you, Steve.
Thanks, Doug. Hello, everyone. As Doug said, we're in a great position as a top player in a fast-growing market. As I'm sure you all know, pressures on public healthcare have been mounting, with the NHS waiting list now at more than 7.5 million people. Private healthcare is playing a critical yet complementary role. Most employers already offer health and well-being benefits. But there is room for growth here, as less than 20% of corporates provide these to their entire workforce, and penetration across SMEs is still relatively low. Customer behaviors are also shifting, with increasing usage and a growing role of digital in customer journeys. This has led to material increase in post-pandemic demand for private healthcare, with the market reaching GBP 5.2 billion of premiums in 2022. Underpinning this accelerated growth is an increasing number of lives covered, so not just from pricing actions.
We expect these trends to persist, driving continued strong growth, with the market forecast to reach more than GBP 7 billion by 2027. With our established business, we are well positioned with a real opportunity to support our customers and deliver strong growth for Aviva. That covers the market, which is highly concentrated. Let's focus on Aviva. We are a strong number three player. Importantly, we have headroom to grow our business and capture share. We've been doing just that, gaining almost one percentage point in 2022 alone. It's worth reminding you that there is a lag in the availability of data in the health market, particularly around market share. That said, given our growth last year, we believe we outgrew the market again in 2023. Our key strengths give me real confidence for the future.
We have a balanced portfolio with strong propositions, catering to corporates, consumers, and SMEs. We have excellent relationships with intermediaries. Aviva has become a highly regarded partner for brokers and employee benefit consultants, or EBCs. We have best-in-class pricing capabilities and remain disciplined on repricing. This is of particular importance in the inflationary environment. We are efficient. We have strong hospital provider leverage and control of our supply chain, underpinned by a leading expense ratio of around 11%. We have the benefit of a diversified business, playing across segments and leveraging the unique advantage of Aviva's group model. I'll give you more detail on these strengths as we go through. Let's delve into the benefit of our diversified business a little further. I'll start with the segments we play in: corporate, consumer, and SME.
In corporate, we drive customer acquisition, bring scale and supplier leverage to our health business, and realize opportunities to deepen corporate relationships across Aviva. In consumer and SME, we drive strong returns and have the added benefit of more often directly owning the customer relationship. As demand for private healthcare grows, we are also seeing a broader mix of demographics in our customer base, as younger adults purchase PMI, private medical insurance, for the first time. With established positions across segments, we're well placed to not only benefit from positive market trends, but also to effectively manage those more challenging ones. And crucially, being part of Aviva's group model is a unique benefit. With our number one customer franchise, we have an opportunity to harness the 16 million individual customers Aviva has in the U.K.
Through our end-to-end product offering, we serve the full range of corporate needs while leveraging our leading broker relationships. And of course, we have the advantage of cost efficiencies and capital synergies. Putting this all together, it's a real tailwind for us. So, our business is set up for success. But most importantly, at its heart is our well-being-centered proposition, bringing value to individuals, employees, and employers alike. Health is a truly purpose-led business. We play a critical role in our customers' lives and have a huge responsibility to deliver for them when they need us most, when they're sick, injured, vulnerable, and need access to treatment and care. Through a combination of clinical expertise and preventative solutions across our three pillars: physical, mental, and well-being, we help individuals avoid or recover more quickly from periods of difficulty.
As a result, individuals benefit from a healthier life, and employers benefit from a healthier workforce. Through this holistic proposition, we realize the benefit of higher customer satisfaction, engagement, and loyalty. Clearly, winning for our customers means winning for Aviva. We are resolutely focused on those customer needs. Realizing our ambition will ultimately come down to how we deliver for customers. Last year alone, we paid out over GBP 600 million in benefits, supporting more than 325,000 claims across a wide range of conditions. For example, we helped over 100,000 individuals with musculoskeletal conditions (back, knees, hips, joints) and the most common reason for extended workplace absence. We help them get to the right treatment at the right time and return to health as quickly as possible.
At the same time, we are focused on trying to make our society a better place, supporting underserved segments with affordable healthcare solutions and reducing waste and overtreatment with Guided Pathways. We do this while making sure that we continue to deliver great value for money for our customers. Customer centricity is one of Aviva's core principles, and we've always monitored our health products through regular value assessments. This approach hasn't changed under Consumer Duty. We also delivered on our COVID-19 pledge, returning GBP 128 million to our customers. Not just laser-focused on value for money, but doing the right thing too. As well as delivering on promises for customers, our consistently strong performance is down to the grip we have on running the business. It goes without saying, the environment has been challenging.
But where others may have struggled, we've maintained a very strong low 90s core in each of the last five years. And this is testament to our disciplined management. And crucially, we have a strong handle on claims and claims inflation. By growing the proportion of claims spend through guided pathways almost twice as much as pre-pandemic, we have a greater control to leverage preferential tariffs with key hospital providers. And I'll go into detail on our guided pathways a little later. To supplement this, we have a controlled referral process where our claims teams carefully manage how customers are referred to consultants. This means we can guide earlier in the process, enabling us to maintain claim severity below headline inflation figures. And as you'd expect, we track claims performance regularly to identify trends in the first instance, with the ability to then respond quickly through price changes.
As we scale, we remain focused on cost control, improving our expense ratio year on year and by a total of four percentage points since 2019. At the same time, hospital provider leverage is growing. We continue to strengthen partnerships with the national providers and negotiated new three-year contracts just last year. Our performance over the last few years reflects our strength in each of these four areas, enabling us to drive profitable growth even in challenging times. To deliver for our customers and meet our financial ambitions, we have three priorities to share with you today. The first two are aligned to our segments, where I will cover our strong positions in corporate and then in consumer and SME, and how we will continue to grow.
Doug will then close on how we're making a real difference for the health of our customers through digital and innovation. Let's get into corporate, including trust. Just to explain briefly the trust business, this differs from standard fully insured corporate policies in that the trust is a fund and is liable for the cost of claims, and our role is to administer the claims. Across this segment, we've been delivering strong performance year after year, and the numbers pretty much speak for themselves. We've posted double-digit growth in premiums over the last four years. This isn't just from rating actions, as we continue to expand our coverage. We now have over 600,000 lives insured, underpinned by strong new business sales. Looking ahead, we are well positioned with a leading proposition in a fast-growing segment while leveraging and providing benefits to our group model.
But there is more for us to go after, with a focus set of growth opportunities. If we look more closely at the market, you'll see that it is both material, with GBP 2 billion of premium and growing at high single digits. That strong growth is set to continue with several underlying trends. First, the workforce is growing, resulting in PMI coverage for more employees. Second, knowing the benefits of a healthy workforce, employers are investing even more in health and well-being. Third, we are seeing greater demand for lower-cost solutions to provide benefits more widely across the workforce. And fourth, employers are looking for customizable offerings with a focus on well-being and prevention. Together, this means the number of lives covered is set to increase, so a really positive backdrop for us. And we're already set up to capture this growth opportunity.
Optimum, our PMI offering for companies with over 250 employees, is truly dynamic, with flexibility across levels of cover, optional benefits, tiered coverage, and hospital access. Our leadership in this space is well recognized. We have a five-star Defaqto rating and won Best Healthcare Provider at the Corporate Advisor Awards last year. We also have clear sources of competitive advantage. We are continually improving our range of benefits. We focus on diversity, equity, and inclusion, be it neurodiversity, menopause, or fertility treatments. Through strong intermediary relationships and joined-up account management, we have incredibly strong retention levels, reaching 98% last year. Some corporates have been with us for nearly 30 years, and the average tenure across the book is 10 years. That's a real indicator of the value we provide.
With our Active Care service, they have integrated support across health and protection, which is unique in this market. Our focus is on digital first. Employees can now self-serve more than ever through our dedicated Digital GP and well-being apps and through myAviva. As we continue to grow market share, we are clearly seeing the benefits of this customer-centric approach. Looking beyond our proposition, we have the unique benefit of Aviva's waterfront corporate offering. No other player in the U.K. has the breadth that we do. We have the ability to provide across general insurance, protection, health, and workplace pensions. Now, that's easy to say, but let me bring that to life for you. There are around 10,500 companies with more than 250 employees in the U.K. Aviva Group has an active relationship with over 3,800 of these. That's more than one in three.
Of these, 36% have products across two or more Aviva business lines. One great example is a long-standing relationship we have with a publishing company, which dates back more than 50 years with their pension. Since then, we have won their health scheme, their group protection, and a BPA transaction. That's just one of many examples that highlights the true power of Aviva's group model. In health, the benefits are just as clear. Last year, almost half of all corporate scheme new business was to existing Aviva customers. Moving forward, leveraging the group model even further is a priority. Doing so will help us to secure new business more efficiently while continuing to outperform our retention plan. Beyond this, we have two focus areas to continue to drive disciplined growth.
We aim to build on what is a strong position with EBCs in a highly intermediated market. We already have over 20% share of wallet with a major EBC. We will deepen existing customer relationships by providing flexible, lower-cost coverage as more corporates look to provide health benefits to more employees. Together, these opportunities will help us both capture new business and strengthen existing business. So that's our corporate and trust segment. We are very well positioned, and we are fast-growing, and we have every reason to be confident for the future. As we move to consumer and SME, it's a similar story of strong performance. High single-digit growth in premiums, almost 40% lives growth since 2019, and a marked acceleration in new business in recent years. With post-pandemic PMI demand set to continue, we're equally well positioned here, particularly with value-based healthcare and guided pathways.
There is significant headroom for further growth across this segment. Taking that growth opportunity further, this is a really attractive market: GBP 3.2 billion in premium, growing at high single digits and with structural drivers in place. Since the pandemic, people are ever more aware of their health and well-being. Today, a primary focus is getting treatment quickly, increasingly through digital appointments in the first instance. There is growing government support, with a task force launched earlier this year to tackle in-work sickness and inactivity, with an emphasis on increasing access for SMEs. Putting these tailwinds together, elevated demand is here to stay. And if anything, should be seen as the new normal. Another positive backdrop for our business. As with corporate, we're well set up to capitalize on this growth.
Our offering, including our Healthier Solutions product for SMEs, covers the broad range of needs across 600,000 lives that we insure. Testament to this are the five-star Defaqto ratings we have for both consumer and SME. We have a set of key advantages. Our Expert Select proposition that we launched in March 2021 leads customers through guided pathways tailored to their condition, leveraging our high-quality providers and condition-based networks, and supported by active supply chain management. This proposition is really valuable for Aviva. I'll talk more about the benefits on the next page. We use personalized modular pricing to price risk more effectively and keep our premiums more predictable. We have prioritized digital-led engagement, helping to simplify and streamline journeys for both our customers and our brokers. All of this feeds into our performance as we continue to take market share.
A lot of our strong performance is down to the leading value-based healthcare strategy we have. Moving away from just a payer of claims, we are now a commissioner of care. Customers are guided towards one of our providers, pathways, or networks, depending on their condition. In what can be an overwhelming and emotional time, this helps them get to the right treatment faster, with lower effort and at a lower cost. By focusing on evidence-based treatment only, we make sure they are in the best possible hands, with nearly all of our customers attending good or outstanding facilities. It's great for our customers, but it's also great for Aviva too. Guided pathways and our pre-referral triage help to reduce costs by over 10%, leveraging our preferential rates with key suppliers and giving us more control of our claim spend.
With almost 7 in 10 customers guided today, it has played a critical role in our inflation management. For society, guided pathways reduce overtreatment and waste by ensuring customers are on the right path from day one. We doubled down on value-based healthcare in 2021 with our Expert Select proposition. This has been a win-win. Premiums are 15% lower for customers when compared to non-guided propositions, and we have greater involvement in the claims journeys. This strategy is core to our proposition, and it has been a real success. Value-based healthcare is a true competitive advantage that will help us deliver all our growth opportunities. First, we aim to accelerate growth through the direct channel in consumer, a market worth over GBP 1 billion. Doing so will help us to meet more existing customer needs and further diversify our intermediated business.
And second, with relatively low penetration of PMI across SMEs today, there is a clear growth potential. And here, we have the advantage of strong broker relationships shared with our general insurance business. And finally, we're exploring incremental growth opportunities as the PMI market evolves. For example, lower-cost solutions and even the self-pay market. So that's consumer and SME. Hopefully, you have more color on our business and understand why we are so confident for the future. And I'll now hand back to Doug.
Brilliant. Thank you, Steve. You've heard about the real competitive advantages across the business. I'm now going to finish on how we are delivering for customers through digital and innovation. Being digital first is already embedded in Aviva's DNA. Our well-being-centered proposition is a great example of that. Beyond our flagship myAviva app, we have multiple digital touchpoints with customers, delivering value for them and increasing engagement for us. For example, Aviva Digital GP is going from strength to strength. In less than 3 years, the number of registered users has grown more than 3 times. More than 9 in 10 of our users are likely to recommend Aviva. Over 60% of consultations are with repeat users. Through our My Health Counts proposition, customers can secure cheaper policies with personalized suggestions for health improvements and a potential discount of up to 15% at renewal.
These digital propositions are critical for our future. We are continuously working to expand and simplify what is our most valuable customer engagement tool. Now, a large part of building out that engagement proposition is through innovation. This is a key priority for us. On this page, we've picked out a few examples of how we're doing just that. Through our dedicated neurodiversity pathway, we provide access to specialists who can help with strategies, who can help with strategies and solutions to overcome challenges, potential workplace adjustments, and line manager training. We've already supported over 2,200 claims with this benefit. Clearly, both employees and their employers recognize the value of these benefits, further reinforcing our leadership position on diversity, equity, and inclusion. As you can see on the right, we've been successfully harnessing the power of partnerships to enrich our propositions.
For example, through the Careology app, we provide a simple way for customers to feel more in control of their cancer journey. We know cancer is one of the biggest drivers for customers purchasing PMI. So we understand the importance of providing support at every stage of treatment. Whether they want to make a note of their questions, thoughts, and feelings, receive reminders to take medication, or keep side effects and symptoms, the app holds everything securely in one place. And this is just one partnership of many. As you can see, Fertifa provides best-in-class fertility treatments. And our HealthKey pilot gives employees the power of choice when it comes to benefits. And there's so much more beyond this. Most recently, we launched our Move with Aviva Challenge with Joe Wicks at the start of April, encouraging people across the U.K. to do more exercise.
And over 120,000 signed up in the first week alone. So as you can see, innovation is a real catalyst for us to stay relevant for our customers and drive future growth. So to conclude, hopefully, you now have more clarity on our health business and share our enthusiasm for what we can achieve here. I'd just like to leave you with the key takeaways. Health is strategically important for us. We're a top player in a growing market with plenty of room for further growth. We're well positioned with market-leading propositions and the unique benefit of the Aviva model. And putting all of this together, we have a fantastic health business. And with our ambition to deliver GBP 100 million operating profit by 2026, we have a real opportunity to drive capital-like growth for Aviva. So it's my three years since I joined Aviva.
I remember when Amanda offered me the opportunity, we talked very passionately about the hidden gem on the health business. Hopefully, you can see why Charlotte, Steve, myself, and the rest of the team are both confident and excited for the future. Thanks, everyone. I'm sure there's plenty of questions, and we're happy to move to Q&A.
Lots of questions, Andrew?
Thanks, Andrew Sinclair from Bank of America. Three from me, as usual, please. First, just on the expense ratio, 11% seems a really impressive number, both in absolute terms and given the size versus the leading players. What is it that really keeps the expense so low versus those larger players? And is there any difference of that just between reporting, some putting some of the lines through the claims ratio and some through expense ratio? That's my first question. Second was just on the cross-sell slide. I think it was slide 20. Just getting to understand how those procurement processes work for workplace benefits. How much of these do go together versus are they independent processes for protection, health, workplace pensions? Does it really work as a cross-sell, or are they just completely independent? And third, just you're saying only 15% of employers offer to their whole workforce.
What's typical? Is it the case that kind of most of that other 85 are offering to 90% of the workforce? What's about average for how much of the workforce is covered as things stand today? Thanks.
Okay. So Steve, do you want me to take the expense? And you can take the question. We like to call it cross-buy, not cross-sell. And then you can take the third question as well. Look, as you know, Amanda and the whole team, we've had a very significant focus on expenses over the last year and will continue to have a focus on expenses. So Steve and the team have done a great job. We continue to invest in digital automation, straight-through processing. All of these things ultimately will drive that ratio. And as we move forward and we scale up, we think that can be maintained, if not improved slightly further. So if we look at our ambition, there's potentially some further more expense to come through that. But it will continue to be a focus as it is in all our businesses.
I think it's one of the reasons why we're a number 3 player, but we can compete with the number 1 and 2 players because of that discipline.
Yeah, absolutely. In terms of the cross-buy, in particular in corporate, those larger corporates tend to be the preserve of the EBCs. We work very closely with the EBCs. Typically, on employee benefits, where health and group risk, group protection are quite linked. Often, renewal dates are linked as well. So it affords us the opportunity to work together with the EBC for the right story for the customer in a way that no one else can. It happens surprisingly more often than you would think, including into our workplace pensions and increasingly into GI, where you can treat the corporate as a corporate and not a policy. In terms of the percentage of workforce, it's a difficult one in terms of market data. There's over 7 million people covered by PMI right now.
And of those 7 million plus, around 80% of those lives are through employer-sponsored. So about 11% of the total population and 80% of those through the corporates or employer-sponsored. I mean, typically, in the past, it would be the higher, more senior staff. But increasingly, with flex benefits, you see quite a mix. But it's a tough one to really get under the skin of. But what we do see is much more across that protection space, which is typically all employees, a higher correlation and linkage of membership to the PMI as well. So we are seeing employers effectively grow and expand the coverage.
William?
Hi, thank you very much. William Hawkins from KBW. First of all, you've given some really useful insights into the different growth levels. I'm kind of wondering, when we go back to slide 11 and we look at the pie chart of your business mix today, given that you've got growth levels everywhere, does the pie chart look about the same by the time we get to 2026, 2027? Or do you think there's a shift in your business between retail, corporate, and SME plays? Again, you've already touched on some of it. Secondly, the walk from GBP 65 million- GBP 100 million of profit, is that primarily just a scale issue? This is a business that's growing. Or are there any particular issues back to the expense question or underwriting issues?
And then lastly, just again, you've touched on these points, but help me understand a little bit more about the subtleties of the product economics. I mean, I kind of think that corporate is very much an administration business at scale. And then the SME and the individual business is more about underwriting and maybe kind of marketing. But I'm not sure I properly understand the subtleties of what's driving the economics in the pie bits.
All right. Thank you.
So why don't I take the question on the ambition? So we are implying sort of mid-teens CAGR in terms of growth. And clearly, we think that's strong growth. And we're confident we're going to achieve that. The majority of that growth is in line with our lives growth because, as you see, we already have a strong core. Clearly, there will be some further expense efficiencies to a certain extent. And we do have a bit of flexibility in how we can change the business mix in order to achieve that. But the majority of that growth will come through lives.
In terms of the pie chart, and certainly when we set that out last time in 2021, things did change slightly. There was an exit in the corporate space of a provider, which skewed last year in particular our corporate new business, or effectively doubling it last year against the normal year. That has skewed it somewhat. We have still seen double-digit growth in consumer and SME. What we will see going forward is probably a stronger mix towards consumer and SME. In the consumer space, a stronger mix towards direct. In terms of the product economics, you're right, consumer and SME probably rely more on brand and marketing and through health and risk specialists and increasingly GI, IFAs for the distribution. Whereas in the corporate space, again, more around the EBCs and actually the breadth of Aviva's offering.
Typically, most corporates will be well aware of us. So it is a slightly different approach.
James.
Thanks. So James Shuck from Citi. A number of your peers or competitors saw adverse claims trends in 2023. I think we saw effectively greater election, people moving away from using the NHS for actually using their services and a greater take-up of private medical. That doesn't seem to have come through in your numbers. You're still kind of saying a low 90s combined ratio. So you just help me understand what your trends have been there and whether you've experienced the same. Secondly, in terms of the market growth, I think you're saying 7%-10% market growth GWP. Can you help me understand the growth in lives and the inflation assumptions that are happening within that market expectation, please? And then finally, just on other kind of models that are available out there. Obviously, Vitality's come from a standing position a few years ago.
Just interested to get your view in terms of sort of the shared value model and not just discounts on gyms, but actually more holistic engagement with your customers.
Do you want to take that?
Yeah. So absolutely. So for last year in particular, we were cautious in terms of our expectations on claims normalization last year. So since the pandemic, the disruption and recovery, we have seen it probably take longer than we anticipated for claims ultimately to return to pre-pandemic levels. And we have actually seen them go slightly past there, in particular in consumer and SME. But on corporate, saw quite a resurgence in claims frequency last year. And we'd allowed for that somewhat in our pricing in 2022 into 2023. And with that agility in terms of typically on a quarterly basis, being able to move that short interval control on pricing. So that claims recovery, those claims costs were largely matched by our earned premium, hence the lower 90s core. So we feel our agility and discipline has helped us perform well last year.
In terms of the market growth, so the last few years, 6.5%- 7%. The future looks a little stronger. We'd expect the outer years to return to around the 6%. You can expect to see still a good proportion of lives' growth there. I think if you look at our performance in the last few years alone, on average, 13% growth and around 10% has been through lives. That doesn't necessarily mean 3% in rating action because there's some changes in mix. On an underlying basis and probably going forwards at 8%-10% into double-digit rating action to manage the claims inflation. On the Vitality point, on the shared value model, that's a tougher one because you want to help and nudge for prevention and well-being.
Actually, our approach in terms of our preventative solutions and access to care, support, and the pathways, we think is a good way of working with our customers to improve their health outcomes, but not necessarily through fully in a reward base. But we're absolutely open in the future to how do you reward appropriately with appropriate rewards in terms of the shared value.
So on the first, I mean, we're consistent across all the businesses. I've done a few of these in focus sessions with BPA and wealth. And volume is fine. But we're interested in profitable growth and generating cash remittances. And so we're very disciplined in terms of how we approach that across all our businesses. And I think we saw that example today. We anticipated a change in where the claims would go. The market might have behaved a bit differently, but we maintain that discipline. And it's come through in our recent.
Yeah. It's fair to your point on the increased uses. That primary care point for customers has grown to Doug's point in the presentation on increased use of digital GPs, for example.
Okay. Larissa over there, right next to you.
Larissa van Deventer from Barclays. Three questions, please. The first one, on the split between corporate and retail customers, can you give us a rough sense of what the split is for Aviva currently and how you see that evolving and also what it is for the market? The second one on the Vitality point, do you track any data currently? Or is this something that you see as a much longer-term proposition? And the last one, the growth strategy specifically focused on customers, retail customers, I presume, and SMEs makes perfect sense. But what differentiates Aviva from the other two major players, AXA and Bupa in that regard? How do you steal the market share away if you plan to grow by 15 and the market is only growing by 10?
Right. So the corporate and retail split, we're probably near a 65%-70% to 30% on the retail. That includes SME into that, what you'd call company-sponsored. So not dissimilar to the whole position in terms of live split across the market, as you'd expect. Yes. Yeah. Sorry, on the Vitality point.
Do you already track that kind of data that you would need to implement a Vitality-type rewards program? Or is that a longer-term ambition?
So we track data insofar as the health assessments and our My Health Counts, but very differently from tracking activity on a daily basis. It is something we're open to and obviously would look at for the future, being mindful of how much data customers are willing to share. But absolutely something we're mindful of. What differentiates us over AXA and Bupa and why we're winning? There's no one thing. We have grown substantially over the last few years, which has afforded us a stronger engagement in the supply chain. So to benefit from improved tariffs, including our percentage of customers we're able to guide, i.e., that guidable spend. So we're spending more with all providers, but also able to concentrate some of that spend based on guiding to maintain those preferential tariffs. Strong proposition, really strong broker distribution engagement.
All of that adds up with that disciplined pricing and agility to mean we can compete.
Abid? Yeah.
Hi. It's Abid Hussain from Panmure Gordon. I think I've got three questions. One is on growth or possibly the limits to growth. And I'm really thinking sort of high teens or really strong growth is possible. But are there any limits in terms of are there a sufficient number of GPs, hospitals in the private settings, mental health practitioners, the general infrastructure to support this service? Is that sufficient? Does it exist to support the growth that you're seeing? That's the first question. And then the second question is on the underlying service providers, the clinicians, the consultants, the doctors. How dependent are your PMI policies in terms of the service provider? Do you control the fees that they receive? Because I know Bupa does something along those lines. And there's been a backlash from consultants pushing back on the fees that they're receiving.
Just a little bit more color on how your policy compares to some of those out in the market. Then just on profitability, thanks for the guidance on the low 90s core profitability overall. Just wondering what the split might be between the consumer division and the corporate division.
Right. So Steve Bridger and I take the last one and then give you. I mean, we're not going to disclose sort of the differential as you can expect. But clearly, when we're pricing, our teams are very focused on the difference by segment in terms of severity, inflation, frequency, and so forth. It's fair to say that it will differ slightly. So consumer would be a little bit more profitable than corporate. But corporate's very important because it adds scale. It gives us the buying power with the hospitals. It allows us to spread the fixed costs. And the other segments can all benefit from that. But all of that is driven. We try to aim for the low 90s core that we mentioned.
So in terms of the growth and the limits, we're obviously targeting what is effectively a mid-teens, which we think we can do safely and sustainably, in particular around premium as well. The sufficient GPs and infrastructure, that increase in demand has put strain into the system. We work closely with all the hospital providers. The providers and facilities tend to govern the consultants and the GP access. So rather than directly to them. In terms of actually improving efficiency of pathways, we would not say they were the most efficient pre-COVID. So there has been efficiency headroom. Pathways are really good ways of guaranteeing efficiency. So on the right track from day one to maintain cost as well. So far, that level of outlook we feel is doable.
In terms of that underlying service provider piece and maybe the fees, there is some advantage in maybe being number three that we've probably had a stronger and a keener focus on tariffs and to create competitive advantage, but also to pay what we feel is a fair level. And typically through the wider hospital contracts. So our approach is through those contracts. The usual caps and collars around inflation, etc., AWE, where they've been somewhat impacted in recent years as well. But our ability to guide has helped us control volume and therefore ultimate claim cost, we feel, at reasonable tariffs.
Okay. Thank you.
Great. Rhea, just next to you.
Thanks. Rhea Shah, Deutsche Bank. 2 to 3 questions. So the first one around market share. I mean, you're number three. AXA and Bupa have much larger market shares. So in terms of growing over the next few years, are you looking to chase market share from them or from the smaller players in the market? And then I guess linked to that, the second question is, would you look to expand inorganically? So I'm not talking about the GBP 100 million target that you've got for 2026, but beyond that, would you look at doing bolt-ons to grow the health proposition more? And then just around the demographics piece again. I mean, we're seeing all these articles in the news about the younger millennials or the Gen Z who are stepping out of the workforce for time because of mental health, for example.
You're also seeing dementia picking up as well in the U.K. So how have you seen that within the health take-up within your proposition? And what are you doing to help the corporates in particular around this issue?
Right. Okay. So I think all three of us could answer these pretty well. But do you want to go on the M&A?
Yeah. Let me go on the M&A. I mean, we have a small team that looks at inorganic opportunities all the time. You've seen us do some of those over the last months. We definitely, if one came up, we would screen it and consider it if it fitted. Nothing specific at this stage. I think the reality is this organic plan is really compelling anyway.
Yeah. So just on the market share, number 3, clearly we have ambitions to grow. We don't know exactly where it's going to come from. But clearly, the number 1 and number 2 players have a high share. So likely there's a bit coming from that perspective. But we're very confident in our number 3 position because what's always important is making sure you have the scale to be able to compete. And we have the scale in terms of the suppliers and how we can negotiate. We've demonstrated we think we have a market-leading expense ratio, which allows us to compete. And all of that bodes well in terms of what we can do moving forward. So we're very confident in the inorganic plan. Obviously, we'll continue to look at the market. But there's few players and few opportunities from that perspective.
We think that we'll be able to meet that ambition. Meeting that ambition will probably mean we'll still be number three. It's still a great business.
And in terms of the demographic piece, so we have, in the last few years, starting to see that shift to some younger ages. I think across our consumer and SME segments, the average age is around 40. With consumer, that can include children in the policies as well. So it can skew that down. And young adults. In terms of the corporate space, it tends to reflect the average age in the workforce. And that is probably around the low 40s as well. And to your point in terms of mental health and actually musculoskeletal prevalence, so we have seen an increasing frequency and concern in terms of mental health in the workplace and musculoskeletal. We have standalone pathways in our proposition that we've put in that specifically focus on specialists in mental health or musculoskeletal.
They can be accessed in a non-GP-referred way, putting you straight into a pathway. The earlier in the pathway, the less complex. Less likely you'll be off sick. In terms of that prevention, our focus: you've got the GP service, stress counseling services, mental health toolkits, line manager training for mental health in the workplace, well-being apps during discounts. We've tried to put as much around those two main focus areas that cause people to fall out of work.
Andrew?
It's Andrew Crean for Autonomous Research. Doug, one unfair question. Can I take you back to the wealth strategy? You said then that you were targeting GBP 280 million or more of profit, I think, by 2027. It went backwards in 2023. It went from GBP 124 million to GBP 100 million. You're looking at a compound growth rate of nearly 30%. Is that still a credible target? And in order to achieve it, how the hell are you going to do it? There must be some major change in one of the businesses.
So, you're asking me about wealth? We're not here to answer wealth. We're still committed to the ambition in wealth. We're very confident that we're going to achieve it. We'll be showing our first quarter results sometime soon. So you'll have to wait for those results. But that ambition does not change.
You also remember at the year-end, we talked about the amount of investment that had gone through in 2023 that was a reason for the way the profit had developed. That investment is critical to the growth trajectory.
Oh, why don't you go with Farooq Hanif at the back?
Thank you. So Farooq Hanif from J.P. Morgan, just one question from me, please. So whether your AIG do actually add to your health proposition, does AIG also sell health in the U.K.? Thank you.
Well, AIG does not sell health in the U.K. But clearly, as we talked about corporate relationships and the opportunity that affords, looking across the 10,000 or so schemes in the U.K. with 250 lives, I think we have a multiple relationship with about 36% of them. AIG will add to that. And we'll be able to sort of leverage those relationships moving forward. But they don't have a health business. It's protection.
Okay. Tom here.
Hi. Morning. Thomas Bateman from Berenberg. Just a couple of questions. You talked about investment needed. Is that just tech that you're reinvesting into? Are there other parts of the business that need additional funds? And secondly, you alluded to government support to reduce long-term sickness. I guess I'm wondering what form might that take and why that might benefit Aviva?
Yeah. So I'll touch on the investment, the first question. So look, we've had growth in the market, as you've seen. And as you'd expect to Aviva, we continue to invest in people's system processes to ensure that we can continue to meet and provide the high level of service that our customers expect when they buy a PMI product. So investments are going into making sure that they have easy access to their health solutions, straight-through processing. We're looking at our further well-being proposition and things that we can do from digital journeys and so forth. So the investment is a combination of all of those. But clearly, from a technology perspective, there is a bit of investment in order to improve and make that experience as seamless as possible for the customer.
Okay. Any more?
Sorry. In terms of the government support, so there's clear support for reducing that workplace absence and inactivity. Our position would be we would love to see the value of insurance recognized, as in health and protection, in the strong return-to-work outcomes and strong health outcomes in maintaining people to stay in work.
Okay. James, do you want to come back in?
I just had one last question. 7 million people on waiting lists in the U.K. Is there anything that the private sector can do to help alleviate that pressure?
Yeah. There are things around diagnostics, screenings, and early access. Increasingly so, the private sector is investing in primary care access. Some of our partners, providers are investing in effectively GPs in the facilities to make it easier to access, but also to get someone into a pathway for support. Remembering that the NHS is there for acute critical and chronic. More the private sector, more that elective acute. Sometimes there's not the strongest crossover. Absolutely, in terms of that primary care access, there's increasing capacity and capability.
Great. There's no more questions. Thank you very much. See you all soon.
Thank you.
Thank you.