The individual private medical insurance (PMI) market is showing signs of improvement after years of decline.
Analyst Datamonitor forecasts that the number of people with individual PMI will increase over 10% to 1.2 million in 2010.
It argued that the turnaround was because of the launch of new low cost policies.
James Dieppe, financial services analyst says: "Providers are attracting new customers into the market with new, sophisticated offerings that cost the consumer less, but offer a lower level of cover.
"PMI providers, in return, have been able to mitigate the effects of increasing claims costs, while also trying to address the problem of falling policyholder numbers."
Previously, PMI insurers had been increasing premium rates by around 8% a year. Between 1997 and 2004, the number of people with individual private medical insurance fell by 192,000.
Dieppe said the biggest shake up has been the entrance of new player Pru Health, which offers premiums reductions for those improving their health and fitness.
