The global health and life insurance market size is predicted to grow steadily over the next few years to register an annual growth of 6.4 percent. The nominal premium amount of this industry is also predicted to grow a little higher. According to data, the premium development of life insurance was relatively stable during 2018 and will continue to remain stable until the end of the year 2019.
What is health insurance?
Health insurance reimburses the insured person for the expenses incurred on treatment of any kind of illness, injury or surgery at a hospital. Presently, many insurance companies offer the facility of cashless hospitalization also, wherein they directly pay for your medical expenses to the hospital. Many companies include a health insurance plan in their employee benefits packages in order to reduce their attrition rates.
More people are opting for health insurance to be prepared for any kind of health emergency and to be financially capable of paying for quality health treatment, medications, and equipment.
In order to keep the consumers and providers engaged, the healthcare insurance industry is engaging in developing personal relations with patients and hospitals. The emergence of personalized medical services, increase in the use of technology in healthcare services, entry of non-traditional competitors, increasing demand for a better healthcare system, and revamped payment systems are impacting the healthcare market profoundly.
Market analysis and trends
The global healthcare spending is predicted to cross the mark of $10.2 trillion before 2022, registering a CAGR of approximately 6.4 percent. The growth in Eastern Europe was around 6.6 percent, in Latin America it was 8.4 percent and in the Middle East and North Africa regions, it was estimated at 8 percent.
The main factor that is responsible for this incredible growth is that the global workforce is aging rapidly, leading to greater health needs which are again leading to increased expenditures related to healthcare. The increasing health problems due to bad lifestyle habits, smoking, alcohol intake, poor nutrition and lack of physical activity is fuelling the growth in the health care and insurance industry.
According to studies, more than half of the U.S. adult population is suffering from obesity and does not engage in any kind of physical activity. Due to rising instances of these health-related problems and increased expenditures, the demand for insurance services is increasing rapidly.
The economic environment has always been a major driver of growth for the insurance market. Emerging economies in Latin America, the Middle East, North Africa, and the Asia Pacific are expected to witness higher growth in the life and health insurance sector. Along with the rising income levels and awareness regarding health insurance, the rising instances of health problems is going to be one of the most important driving factors for the growth of this sector.
Many providers of health care services such as pharmaceutical manufacturers, health equipment manufacturers, and companies involved in life sciences, are engaging in activities such as mergers and acquisitions. This is allowing them to establish a stronghold and gain a larger market share along with increased negotiating power. All these companies are investing significantly in research and development and are coming up with better healthcare services and products due to competition which is also a major growth factor in this industry.
The rising popularity of automation in the sector will further make healthcare services more accessible to people due to reduced cost and process. Due to the poor performance of government-funded insurance schemes in the UK, more people are opting for private health and life insurance services.
With the increasing income levels, people are spending a lot towards healthcare. This is contributing to growth in not only health care expenditures but also leading to growth in higher demand for insurance services.
The increase in the elderly population all over the world is a driving factor as well because elderly people are regular users of health care services.
The competition in this sector is very high which is leading to a decrease in the prices of services. Studies reveal that medical costs have been reduced considerably over the past few years due to the regular entry of new service providers. The factors influencing these prices are demographics, lifestyle changes and technology influences related to health care.
There are immense investment opportunities in the insurance sector as more and more people across the globe are opting to buy health insurance and life insurance. Rising disposable incomes, better standard of living and economic success are factors further contributing to the popularity of the insurance sector. However, competition in the field is a challenge.
Author: Kelly Wilson