The global healthcare insurance market size is expected to reach USD 4.0 Trillion by 2027, expanding at a CAGR of 6.7%, according to a new report by Grand View Research, Inc. Growing cost of healthcare, increasing prevalence of various chronic diseases as well as the rise in government initiatives for health cover schemes to improve healthcare are boosting the market growth.
Healthcare gets more expensive with the growing population and rising average life expectancy. Also, 50.0% of the increase in healthcare spending comes from the increased costs for services, particularly inpatient hospital care. Furthermore, increasing incidences of chronic conditions such as heart disease and diabetes have had a direct impact on the increasing cost of medical care. Both the diseases alone are responsible for 85.0% of the healthcare costs and almost half of the Americans have a chronic illness.
Moreover, the current pandemic of COVID-19 has been an eye-opener for many people, reinstating the need for health cover at all times. The market has seen rapid growth in the past 3 months due to the outbreak of the coronavirus pandemic. In India, the health and specialized health insurers have been rolling out focused on health cover against COVID-19 in the past six months. There has been a significant rise in the demand for health coverage with the government lockdown and coronavirus pandemic.
Besides, to meet the changing preferences of customers, health insurers are offering value-added services and are using AI-driven chatbots to create a more engaging experience. They are reacting to the evolving business environment by shifting their value proposition to improve customer-centricity along with operational efficiency and flexibility.
The adult segment dominated the market and accounted for the largest revenue share in 2019. This is attributed to rising cases of lifestyle diseases among adults, which is likely to increase health issues in the future. Adults are more prone to cardiovascular disorders, thereby driving the segment. The senior segment is expected to witness significant growth over the forecast period. This is owing to increasing cases of hospitalization of people over 65 years of age due to chronic diseases.
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Further key findings from the study suggest:
- The private segment is anticipated to register the fastest CAGR of 7.0% over the forecast period. This is owing to the fact that a large number of private players are present in the market
- The life insurance segment accounted for the largest share of 53.3% in 2019 due to the advantages it offers such as permanent coverage and guaranteed death benefit
- North America held 41.0% of the market share in 2019. This growth can be attributed to increasing awareness regarding various health policies in the region
- In the Asia Pacific, the market is expected to witness the fastest CAGR of 8.9% over the forecast period due to the increasing penetration of insurance services in urban and rural centers and favorable government policies.