Strong economic growth and high employment helped boost sales of private medical insurance (PMI) by 5.5% in 2000, reports health analyst Laing & Buisson.

Its latest report on the PMI market shows demand for PMI has recovered from a decade in the doldrums to reach 6.9 million people in 2000, compared to 6.7 million ten years ago.

Philip Blackburn, the report's author, said this growth was funded by a combination of full employment and a strong UK economy.

He said: “Many companies, particularly in the IT sector, are performing very strongly and this is leading to greater penetration for PMI cover.”

Blackburn did not consider that negative public perceptions of the NHS were a significant factor in the PMI market's growth, as the number of individuals with personal cover had remained almost static at around two million people.

He said demand for health insurance was actually strongest in the company-paid market, which grew by an unprecedented 8% and now covered almost 4.8 million people.

Blackburn said this slight decrease was due to rising premiums, the average cost of which broke the £1,000 barrier for the first time in 2000.

Bupa and PPP Healthcare continue to dominate the PMI market, with a combined share of between 65% and 70%. However, in third place, Norwich Union Healthcare has climbed to around 8% of the market.