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Health Insurance Market

Health Insurance Market: Information by Distribution Channel (Direct Sales, Banks), Insurance Type (Diseases Insurance), Coverage (Point Of Services), and Region – Forecast till 2030

Published At : 13 Jul, 2022
Updated At : 26 Aug, 2022
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Market Snapshot
Base Year:
2021
Study Period:
2020-2030
CAGR:
9.9 %
Fastest Growing Market:
Asia Pacific
Largest Market:
North America

The global health insurance market size was 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). 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 other mental or physical handicaps. 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.

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Market Dynamics

Drivers: Accidents Help to Boost the Growth of the Global Health Insurance Market.

Health insurance claim management service is improved in developed and most developing countries. This is attributed to the fact that health insurance providers across developed nations, such as the UK, Germany, and France, have been using Nuxeo, a healthcare claims management software, to streamline the medical claims process. Insurance claim management software allows insurance companies to speed up patients' payment lifecycle and reduce fraudulent claim settlement activities. In addition, the increase in usage of advanced technologies, such as artificial intelligence and machine learning technology, in the claim management system to deliver affordable insurance premium accelerates the sale of health insurance policies among consumers.

Moreover, the increase in usage of wearable devices, such as fitness trackers, smart health watches, wearable ECG monitors, and wearable blood pressure monitors, among consumers allows insurance companies to collect an enormous amount of insured health-related data and improve the claim management process. Therefore, improving claim management services of health insurance companies is accelerating the growth of the market across the globe.

Drivers: The Surge in Awareness Of Health Insurance In Rural Areas

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.

Restraint: Increase in Health Insurance Premium Cost

Because of the rise in healthcare costs, such as the cost of drugs, hospital admission fees, and numerous other treatments, health insurance companies have raised premium prices. Furthermore, the majority of consumers around the world have been infected with chronic ailments such as heart disease, Alzheimer's disease, and diabetes. Healthcare professionals have been imposing enormous costs for the treatment of chronic diseases. Thus, insurance companies are responsible for addressing massive claim settlement costs, which hinders the market growth.

What Are Future Growth Opportunities in Global Health Insurance Market?

  • Increase in Medical Treatment Cost

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 promote the growth of the global market in the coming years.

 

Segmental Analysis of the Global Health Insurance Market

The global market share is segmented based on distribution channel, insurance type, coverage, end-user, age group, and region. 

  • On the Basis of Distribution Channel

By distribution channel, the global 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.

The direct sales segment is the fastest growing. Direct selling attracts many customers via social media sites, emails, and others. It further offers personalized services to the insurer, with flexible buying hours and others. Thus, these are the primary growth factors for direct health insurance sales.

  • On the Basis of Insurance Type

By insurance type, the global 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.

The diseases insurance segment is the fastest-growing segment. Customers having the risk of critical illness accelerate the need for suitable health insurance covering the high costs of medical treatment. Therefore, a disease insurance plan offers adequate coverage for various medical expenses, thus ensuring financial security. Such health plans also enable the policyholder to access quality medical care at the best hospital without facing any hassle. Disease insurance offers financial coverage for medical emergencies such as heart attack, stroke, cancer, etc. It includes pre & post-hospitalization, organ donor cover, & dialysis cover, along with lifelong renewability and annual health check-up. Thus, these are the significant factors for the growth of disease insurance policies.

  • On the Basis of Coverage

Based on coverage, the global 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.

The exclusive provider organizations (EPOs) segment is the fastest-growing. Exclusive provider organization (EPO) plan rates are generally lower than other types of health plans. Since EPO contracts are exclusive with specific doctors and hospitals in a network, rates are lower than other plans such as PPOs. In addition, during any medical emergencies, employees have the benefit of consulting a doctor right away. As a result, the primary growth determinants for exclusive provider organization plans are as follows.

The second largest group is health maintenance organizations (HMOs). A health maintenance organization (HMO) plan comprises a group of hospitals, doctors, and other healthcare providers who agree to operate together within a network in exchange for a set payment rate. Many HMO providers are compensated per-member basis, regardless of how often they treat a patient. As a result, HMO plans are more cost-effective than PPOs and other plans, which is a significant market trend. As a result, the primary growth reasons for health maintenance organization (HMO) plans are as follows.

  •  On the Basis of End-User

By end-user, the global 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.

The individual segment is the fastest growing. It protects individuals from financial crisis while facing health issues and relieves the burden of medical expenses so that individuals can focus on recovering well. Furthermore, the cashless hospitalization facility offered by health insurance companies under an individual health policy allows an individual to avail of medical treatment without paying for the hospital. This is a significant market trend for individual health insurance plans. 

  •  On the Basis of Age Group

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.

The senior citizen segment is the fastest growing. Health insurance for senior citizens has become necessary as people age as the list of ailments increases and the risk of repeated hospital visits rises. The cost of medicines for diseases is higher and becomes a financial burden for the family to afford such high rates of medication and doctor consultations regularly. Therefore, health insurance coverage for senior citizens continues to rise as it covers all the hospital expenses, including daycare expenditure, doctor & specialist fees, medicines, and others. Therefore, these are the primary growth factors for senior citizens' health insurance. 

 

Regional Analysis of the Global Health Insurance Market

By region, the global health insurance market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

Health Insurance Market Regional Analysis

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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 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.

 

Competitive Landscape

The key players in the global health insurance market are Aetna Inc., AIA Group Limited, Allianz, ASSICURAZIONI GENERALI S.P.A., Aviva, AXA, Cigna, Ping An Insurance (Group) Company of China, Ltd., UnitedHealth Group, and Zurich. 

 

Recent Developments by Key Players

  • May 2022 - AIA Group Limited (the "Company," and together with its subsidiaries, "AIA" or the "Group"; stock code: 1299) announces that AIA China has received approval from the China Banking and Insurance Regulatory Commission (CBIRC) to begin preparations to establish a new branch in Henan province.
  • 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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