June 16, 2024

The Rising Demand for Health Insurance Coverage to Fuel Health Insurance Market Growth

The rising demand for health insurance coverage will benefit the overall health insurance market. The global health insurance market is estimated to be valued at US$2606.72 million in 2024 and is expected to exhibit a CAGR of 9.9% over the forecast period 2024 to 2031.
The global health insurance market continues growing at a rapid pace due to increased health care costs and rising demand for health insurance coverage. Health insurance helps cover medical costs in case of illness, injury, or hospitalization and ensures financial security in case of health contingencies.

Key players in the global health insurance market include Aetna Inc., AIA Group Limited, Allianz, Assicurazioni Generali S.P.A., AVIVA, AXA, CIGNA, Ping an Insurance, and UnitedHealth Group Inc. These companies are focused on partnerships and collaborations to expand their presence and gain competitive advantage in the market. For instance, in August 2021, Aetna and Microsoft partnered to deliver $1 billion in health benefits by 2025 with cutting-edge technologies like artificial intelligence.

The rising prevalence of chronic diseases worldwide is a key health insurance market trend. According to the World Health Organization (WHO), chronic diseases accounted for approximately 60% of all reported deaths in the world in 2005. Major chronic diseases include cardiovascular diseases, diabetes, cancer, and respiratory diseases. The increasing chronic disease burden has driven up demand for health insurance coverage globally to cover treatment costs.

Digital innovation is another major trend in the health insurance market. Insurers are increasingly adopting advanced technologies like AI, machine learning, cloud, mobile apps, and analytics to improve processes, enhance customer experience, and reduce costs. Technologies help insurers gain valuable insights from data to better understand customer needs, streamline claims processing, detect fraud, and develop customized products and services. This has accelerated digital transformation of the health insurance industry globally.

Market Drivers
The rising healthcare costs and medical inflation have been key drivers for the health insurance market. As per reports, the annual per capita healthcare spending in the US increased from an average of $376.6 in 1970 to $11,582 in 2020. This rising cost of healthcare has forced individuals to opt for health insurance plans for financial protection. Additionally, governments across countries have also promoted health insurance uptake through favorable regulations. For instance, the Affordable Care Act in the US expanded Medicaid eligibility and mandated the purchase of health insurance.

Opportunities
The untapped potential in developing markets presents lucrative opportunities for health insurers. India’s health insurance penetration is around 10-15% of the population compared to over 90% in countries like the United States. The growing middle class in countries like India, China and others can boost demand if adequate affordable options are made available. Insurers can leverage new technologies like telemedicine, remote monitoring devices and AI to improve access, drive efficiencies and develop customized products aligned with dynamic healthcare needs and budgets.

Key Takeaways
Growing demand: The demand for health insurance is projected to grow driven by increasing healthcare costs, higher government spending, growing prevalence of chronic diseases and rising income levels in emerging economies.

Global expansion: Leading players are expected to strengthen their presence in developing Asian, Latin American and African countries through partnerships to tap into higher growth opportunities in these largely underpenetrated healthcare markets.

Technological advancements: Insurers are leveraging technologies like AI, predictive analytics, telehealth and remote patient monitoring to deliver enhanced customer experiences, develop outcome-based products and drive operational efficiencies. Players offering digital-first plans tailored for tech-savvy customers will have an edge.

*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research

2. We have leveraged AI tools to mine information and compile it