(MENAFN- Straits Research) Treatment for chronic illnesses, mental care, diagnosis, dental care, emergency evacuation, and other services are covered by a health insurance plan. It usually levies a predetermined sum from the individual and pays for the policyholder's surgical and medical expenses. Medical costs are also incurred due to physician consultation fees and treatment for any sickness, accident, or another mental or physical handicap. Healthcare insurance reimburses such medical expenses in exchange for a monthly premium or a payroll tax.
The increased use of modern technologies to improve claim management services allows insurance firms to speed up the patient's payment lifecycle more efficiently and prevent fraudulent claim settlement activities. In addition, an increase in the number of diseases and accidents and a rise in awareness of health insurance in rural regions are driving the industry forward.
Market Dynamics
Surge in Awareness of Health Insurance in Rural Areas to Drive the Global Health Insurance Market
The health insurance market is accelerating in rural areas faster as it offers numerous benefits such as reimbursing the insured's illness treatment cost and paying a lump-sum amount in prolonged cases. Customers in rural regions are also increasingly aware of complete health insurance coverages, such as in-patient hospitalization costs, pre-hospitalization and post-hospitalization charges, ambulance costs, and domiciliary hospitalization costs, supporting market growth. Furthermore, government organizations such as banks and cooperative banks play an essential role in increasing health insurance product penetration in rural areas by providing affordable insurance policies and streamlining the claim settlement process. As a result, increased awareness of health insurance in rural areas pulls the global industry forward.
Increase in Medical Treatment Cost to Provide Opportunities for the Global Health Insurance Market
Technology advancements have led to the development of drugs & medical devices that are used to treat a variety of serious illnesses, injuries, or mental and physical disabilities. These advanced medical treatments are costly, increasing the total cost associated with different medical procedures. Moreover, increasing demand among healthcare professionals for advanced technology to treat chronic diseases, such as cancer and cardiovascular diseases, is expected to boost the medical treatment cost during the coming years. Thus, an increase in medical treatment costs will help to boost the growth of the global health insurance market in the coming years.
Regional Insights
By region, the global health insurance market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. North America was the highest revenue contributor and is estimated to grow at a CAGR of 7.9%. The region occupies the largest share in the health insurance market, owing to the high adoption of private insurance, increased population suffering from chronic diseases, and surge in disposable income. UnitedHealth, Kaiser Foundation, and Anthem, Inc. are the leading health insurance companies in the U.S., which offer a wide variety of health insurance products and related services through their affiliates and subsidiaries, thereby driving the market growth in North America.
Asia-Pacific is the fastest-growing region. It is estimated to reach USD 1610 billion by 2030, at a significant CAGR of 13.8%. Continuous growth in healthcare costs and the steady income of consumers act as factors that boost the development of the health insurance market in the region. In addition, the higher contribution of the elderly population propels the health insurance market's growth.
Europe is the third-largest region. Health insurance is mandatory for all people living and working in Europe. Governments provide compulsory health insurance in European countries, such as the UK, Germany, and France, which drives the health insurance market in this region. In addition, an increase in the introduction of health insurance chatbot technology to streamline insurance distribution services is propelling the health insurance market in Europe.
Key Highlights
The global health insurance market is worth USD 2255 billion in 2021 and is projected to reach USD 5275 billion by 2030, registering a CAGR of 9.9% during the forecast period (2022-2030).
By distribution channel, the global health insurance market is segmented into direct sales, brokers/agents, banks, and others. The broker/agents segment was the highest contributor to the market and is estimated to grow at a CAGR of 10% during the forecast period. Independent agents and brokers charge a small percentage of commission for providing services. The commission paid to these representatives is invariably affordable for the companies as it saves a lot of time and effort to search for potential buyers and accordingly sell the insurance policy. In addition, these agents protect companies' funds by traveling long distances to sell health insurance services of the companies to potential buyers. Moreover, independent agents and brokers eliminate the need for infrastructure facilities, such as an office, for meeting customers. Thus, these are the primary growth factors for brokers/agents.
By insurance type, the global health insurance market is bifurcated into diseases insurance and medical insurance. The medical insurance segment was the highest contributor to the market and is estimated to grow at a CAGR of 8.7% during the forecast period. Medical insurance benefits people with a pre-existing medical history and when there is a need for financial coverage for the cost of medicines. Medical insurance offers a comprehensive range of hospitalization charges, pre & post-hospitalization charges, and ambulance expenses. In addition, it provides compensation in case of loss of income due to an accident of the insured. Therefore, policyholders prefer medical insurance to stay financially independent in case of any health emergency arises. Therefore, this is a significant growth factor for the medical insurance segment.
Based on coverage, the global health insurance market is segregated into Preferred Provider Organizations (PPOs), Point of Services (POS), Health Maintenance Organizations (HMOs), and Exclusive Provider Organizations (EPO). The preferred provider organizations (PPOs) segment was the highest contributor to the market and is estimated to grow at a CAGR of 8.9% during the forecast period. A preferred provider organization (PPO) is a type of health plan that contracts with medical providers, such as hospitals and doctors to create a network of participating providers. It helps choose any doctor according to the type of disease & treatment and offers discounts to those within the insured's preferred network. In addition, it is more flexible than other plan options and provides benefit plans designed to meet each employer's needs. It offers actuary services, claims screening and processing, benefits coordination, utilization control, management reporting, health promotion activities, and networking capabilities. Therefore, these are the primary growth factors for PPO plans.
By end-user, the global health insurance market is divided into groups and individuals. Based on age group, it is segmented into senior citizens, adults, and minors. The group segment was the highest contributor to the market and is estimated to grow at a CAGR of 9% during the forecast period. Employees expect medical insurance from their employers and a salary to cover health expenses. Therefore, employers provide health insurance policies to the employers as compensation, a significant market trend. Thus, such factors increase the demand for group health insurance.
Based on age group, the global health insurance market is segregated into senior citizens, adults, and minors. The adult segment was the highest contributor to the market and is estimated to grow at a CAGR of 8.8% during the forecast period. The adult age group also has the most cases of mental diseases, such as depression and anxiety. Therefore, there is a need for health insurance that covers the cost of such chronic diseases and fees associated with psychiatric consultations. These factors accelerate the growth of health insurance among the adult segment.
Market News
March 2022 - AIA Group Limited (the "Company," and together with its subsidiaries, "AIA" or the "Group"; stock code: 1299) announces that it has agreed to acquire 100 percent of the shares in Blue Cross (Asia-Pacific) Insurance Limited ("Blue Cross") and 80 percent of the shares in Blue Care JV (BVI) Holdings Limited ("Blue Care") from The Bank of East Asia, Limited ("BEA"). Blue Cross is a well-established insurer in Hong Kong focused on providing leading health insurance products. Blue Care operates medical centers with an extensive medical network in Hong Kong.
Global Health Insurance Market: Segmentation
By Distribution Channel
Direct Sales
Broker/Agents
Banks
Others
By Insurance Type
Diseases Insurance
Medical Insurance
By Coverage
Preferred Provider Organizations (PPOs)
Point of Service (POS)
Health Maintenance Organizations (HMOs)
Exclusive Provider Organizations (EPOs)
By End-User
Group
Individuals
By Age Group
Senior Citizens
Adult
Minors
By Region
North America
Europe
Asia-Pacific
LAMEA
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