Health Insurance Market Size, Share & COVID-19 Impact Analysis, By Service Provider (Private Providers and Public Providers), By Product Type (Medical Insurance, Critical Illness Insurance) By Network Provider (Preferred Provider Organizations (PPOs), Point of Services (POS), Health Maintenance Organization (HMOs) By End User (Corporates and Individuals), and Regional Forecast, 2021-2028

The global health insurance market size was USD 1,966.6 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with health insurance witnessing a positive demand across all regions amid the pandemic. Based on our analysis, the market will exhibit a steady growth of 6.6% in 2020 as compared to the average year-on-year growth during 2017-2019. The market is projected to grow from USD 2,088.5 billion in 2021 to USD 3,038.6 billion in 2028 at a CAGR of 5.5% in the 2021-2028 period. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.

Over the period, the market is witnessing positive growth across the globe. It is one of the important cost-sharing tools that cover medical expenses for illness, injury, and accidents of an individual & any family size. It also provides quality health care services. Depending on the convenience, the insurance policies can be taken at annual or monthly premium payments for a specified tenure or lifetime. During the special enrollment period, if the insured person gets diagnosed with a severe health problem or meets with an accident, the expenses are covered under the health policy.

Key factors contributing to the market growth during the forecast period are the increasing prevalence of chronic diseases and growing treatment costs. Moreover, the surging awareness, rise in the number of offerings with evolved healthcare policies, and the launch of new schemes by governments would support the growth. For instance, Ayushman Bharat, Awaz Health Insurance Scheme, and Aam Aadmi Bima Yojana are some of the schemes provided by the Indian government. In the U.S., they have Medicare and Medicaid insurance which are run by central and state governments. Similarly, other countries also offer different insurance schemes for their citizens. Furthermore, the use of the internet is supporting the growth by making the buying and renewing process easy.

Health Insurance Market to Witness a Positive Impact due to Increasing Launch of Policies during COVID-19 Pandemic

The pandemic has exposed the gaps and limitations in the healthcare systems across Asian countries and highlighted the importance of universal health coverage (UHC), which may help to improve the market in this region in the upcoming years. In the long term, the COVID-19 pandemic will have a positive impact on the global market as it has increased the awareness about the need for medical insurance and digitalization in this field to ease the insurance process.

Additionally, insurance companies are including COVID-19 protection coverage to focus on evolving their policies to overcome the unmet needs. New subscriptions of HI witnessed significant growth in the last year. On the other hand, during the COVID-19 pandemic, the overall insurance market growth was slowed down as many authorities announced the relaxation of premiums for a shorter period. For instance, on April 16, 2020, the Government of India announced a relaxation on health insurance premium payment on renewals for motor and health policies till May 15, 2020, due to the COVID-19 outbreak. The relaxation of the premium during the pandemic has slowed down the health insurance market growth.

LATEST TRENDS

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Growing Development of New Products by Health Insurance Companies is a Prominent Trend

Evolution in the market with the launch of new products by health insurers is creating a new trend in the market. Several companies are providing different policies, such as single disease packages that cover only one disease, which includes high blood pressure, diabetes, and cancer that can be added to the regular insurance. These companies are providing flexibility to customers, which would make the process easy to port from one insurance company to another more easily. Additionally, the increasing use of the internet has made insurance distribution more convenient. The online sales of insurance policies have become the easiest distribution channel for companies as they allow customers to compare various policies to make better choices.

Furthermore, various companies have developed their own large online sales channel through digital marketing and social media. Also, the development of new mobile applications offering the details of the policy is a new trend in the market. For instance, in November 2019, Solv, a healthcare start-up company, announced the launch of its mobile app for consumers to book appointments and navigate their health insurance.

DRIVING FACTORS

Increasing Geriatric Population and Sedentary Lifestyle to Drive the Global Market

The growing geriatric population is one of the key driving factors that would fuel the market. A large number of the aged population is suffering from one of the other chronic diseases such as heart disease, cancer, type 2 diabetes, and arthritis which is further increasing the demand for HI policies among this age group. Moreover, the adoption of sedentary lifestyles among the adult population is leading to an increase in the patient pool living with different chronic diseases.  The National Cancer Institute estimated that around 1,806,590 new cancer cases were diagnosed in 2020, and 606,520 people died from the disease in the U.S.

Additionally, the World Population Prospects reported that across the world, 1 in 11, i.e., 9% of the population was over the age of 65 in 2019, and it is estimated that it will increase to one in six people, i.e., 16% by 2050. The rising aging population and surging prevalence of chronic disease would boost the market growth. Along with the increasing awareness, this would result in a rising number of people opting for medical insurance.

Launch of New Policies, Mergers, Acquisitions, and Partnerships to Propel Growth

One of the major factors that are likely to contribute to the market growth during the forecast period is the key developments related to the market, such as the launch of new insurance schemes by governments, the introduction of innovative apps by public or private companies, mergers & acquisitions, or any partnership agreements. For instance:

• In November 2020, the Competition Commission of India (CCI) approved the acquisition of the General Insurance Business of Bharti AXA General Insurance Company Limited (Bharti AXA) by ICICI Lombard General Insurance Ltd. Through this acquisition, the company will provide a diversified range of insurance products for health & accident insurance coverage, motor, and other insurance types, through multiple distribution channels.


• In November 2019, Allianz Care announced the launch of a new private HI plan to meet the needs of modern families, couples, and individuals. These new insurance plans are especially focused on individuals moving with their families to destinations across the U.S., Europe, the Middle East, and Asia.


• In July 2018, Allianz Care announced a partnership with ICE Insurance, a local insurance provider in Mozambique. This new partnership will be improving the company’s position in Africa.

Hence, such increasing product launches, approvals, and partnerships would boost the market growth in the forecast period.

RESTRAINING FACTORS

Fraud Insurance Claims Coupled with Stringent Rules May Hinder Growth

Fraudulent insurance claims resulting in stringent government regulations for verification purposes are factors responsible for restricting the growth. For instance, a false claim for an accident that has never happened, faked death claims, lack of awareness about the importance of insurance among developing and underdeveloped countries would negatively impact the market growth. In developing markets, such as Asia and Africa, less than 50% of the population is covered under medical insurance.

For instance, according to the India Brand Equity Foundation, only 15% of the population was insured in 2016.  Furthermore, according to the Asian Development Blog, the health protection gap was USD 1,800,000 million in 2019, which was 10% of the average annual household income. The less number of populations under health insurance may hinder the market growth. Additionally, the cost associated with the insurance and the lack of awareness would also hamper the market in developing countries/regions.

SEGMENTATION

By Service Provider Analysis

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Hand-held Segment to Grow at a Faster Pace during 2021-2028

Based on the service provider, the market can be segmented into private providers and public providers. The private providers segment is anticipated to dominate the market in terms of health insurance market share during the forecast period. This is primarily due to the increasing penetration rate of private providers in developing regions or countries. Additionally, private providers are offering innovative policies with all the benefits, which is surging the preference among the population.

The public providers segment is projected to witness favorable growth during the industry forecast period owing to the low premium cost and compulsion of having basic medical insurance by many countries such as Germany, Denmark, and others. Also, the launch of new government schemes for the low or middle-income class would support the segmental growth.

By Product Type Analysis

Medical Insurance Segment to Show Rapid Growth Backed by Increasing Obese Population

Based on the product type, the market is segmented into medical insurance, critical illness insurance, and others. The medical insurance segment is projected to account for the largest market share during the forecast period owing to the increasing adoption of a sedentary lifestyle, the surging obese population with multiple health issues, and rising accidental cases. The critical illness insurance segment accounts for the second-largest share. The increasing prevalence of chronic diseases such as cancer, cardiac diseases, diabetes, and others would support segmental growth. For instance, according to the World Health Organization, each year, 17.9 million people live with cardiovascular diseases (CVDs) globally. The other product type includes income protection insurance which accounts for a lower CAGR due to the limited demand.

By Network Provider Analysis

Preferred Provider Organizations Segment Accounted for the Highest Share in 2020

Based on the network provider, the market is segmented into preferred provider organizations (PPOs), point of services (POS), health maintenance organizations (HMOs), and exclusive provider organizations (EPOs). The PPOs segment dominates the market and would account for the largest share during the forecast period. They provide more flexibility in selecting hospitals, physicians, and similar other benefits, which increases the preference for this network. The POS segment held the second position owing to the low premiums compared to PPOs, which supports the segmental growth. HMOs network providers allow them to choose physicians within their network, and it is one of the most economical insurances for health, which increases its preference. The EPOs segment accounts for a lower market size as people are not much aware of this provider, and it has a higher premium cost than HMOs.

By End-User Analysis

Individuals Segment Held the Highest Share in 2020 Backed by Availability of More Benefits

Based on the end-user, the market is segmented into corporates and individuals. The individuals segment is estimated to account for the largest market share during the forecast period. The benefits offered under individual plans are more, and the premium generated from an individual insurance policy is higher as compared to corporates which enhance the market size. Corporate insurance is provided by the company to their employees, and it has low premium cost as it offers limited benefits compared to individual insurance. Additionally, these types of insurance become invalid as the employee leaves the job. The above factors may limit the corporate insurance segment growth.

REGIONAL INSIGHTS

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North America is anticipated to dominate the global health insurance market during the forecast period. Government initiatives to provide Medicare and Medicaid insurance at low cost, as well as increasing the population covered under health policies, are set to propel regional growth.

Also, the high cost of medical products and favorable healthcare reimbursement policies in this region support the market growth.

Europe is expected to be the second-largest market in the forecast period owing to the stringent federal laws stating that citizens should compulsorily have at least one insurance policy for health. Also, the rising awareness among the population about the need for insurance plans would drive the market growth in this region. 

The Asia Pacific market is anticipated to be the fastest-growing market showcasing the highest CAGR during the forecast period due to the increasing penetration of private providers in this region and the growing launch of schemes by central and state governments. Also, the increasing prevalence of chronic diseases and populated countries, such as China and India, would support the market growth. The emerging markets of Latin America and the Middle East & Africa are projected to account for lower market shares during the forecast period due to the limited penetration of insurance companies in these regions. But the initiatives taken by the government to offer the affordable care act will increase enrollment in health plans.

KEY INDUSTRY PLAYERS

Diversified Insurance Plans Offered by United Healthcare Services, Inc. and Centene Corporation to Support Their Dominance

The competitive landscape for the global health insurance industry has some of the dominant key players, such as United Healthcare Services, Inc., Centene Corporation, and Anthem Health Insurance that cover the majority of the market share. Other prominent players in the global market include Cigna Corporation, Humana Inc., and WellCare Health Plans, Inc. These key players are implementing different strategic initiatives to improve their market shares in this sector. For instance, in September 2019, CCI approved the acquisition of shares in State Bank of India (SBI) General Insurance by Napean Opportunities LLP and Honey Wheat. Companies take these strategic steps to increase their market revenue share in the forecast period.

LIST OF KEY COMPANIES PROFILED:

• CVS Health Corporation (Aetna health) (Woonsocket, U.S.)


• Humana Inc (Louisville, U.S.)


• Centene Corporation (St. Louis, U.S.)


• Cigna Corporation (Bloomfield, U.S.)


• United HealthCare Services, Inc (Edina, U.S.)


• Allianz (Munich, Germany)


• National Insurance Company Limited. (Kolkata, India)


• Anthem Health Insurance (Indianapolis, Indiana)


• WellCare Health Plans, Inc. (Tampa, U.S.)


• Bupa Global (London, U.K.)


• Other Players

KEY INDUSTRY DEVELOPMENTS:

• November 2018 – CVS Health Corporation announced the acquisition of Aetna health. The acquisition improved the product offerings of the company and strengthened its product portfolio.


• September 2019– The German Private Health Insurance Association announced a new venture capital fund worth USD 121.3 million to improve digital medical care across Germany.

REPORT COVERAGE

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The global market research report provides a detailed analysis of the market and focuses on key aspects, such as the service providers, product type, network providers, and end-users. Additionally, it covers industrial insights and key developments such as mergers, acquisitions, partnerships, and new product launches, along with the impact of the COVID-19 pandemic on this market. Besides, the report offers current market trends and highlights key industry dynamics.

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