India Expanding Ageing Population Necessitates Health Insurance Coverage
The continuously growing ageing population in India has created a need for comprehensive health insurance coverage. With the rising costs of healthcare and an increasing prevalence of diseases, health insurance has become essential in providing financial support during medical emergencies. Health insurance not only offers financial stability but also peace of mind, protecting individuals from various health issues. Recognizing the significance of healthcare, the Indian government provides tax exemptions on health insurance policies, further emphasizing its importance in financial planning. Additionally, companies that offer health insurance policies attract highly qualified candidates, making them appealing employers and demonstrating care for their employees. The expanding elderly population is a key factor driving the growth of the health insurance market in India.
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The growth of chronic diseases further fuels the demand for health insurance among the elderly. A significant portion of the population is living with at least one chronic condition such as heart disease, cancer, type 2 diabetes, and arthritis. The number of individuals with multiple chronic diseases is also increasing, thereby driving the expansion of the health insurance market. For instance, the World Population Prospects states that in 2019, 1 in 11 individuals globally were over 65 years old, and this number is predicted to rise to 1 in 6 people by 2050. The combination of a growing elderly population and the prevalence of chronic diseases contributes to the expansion of the health insurance market as more people opt for medical insurance and become aware of its benefits.
Moreover, healthcare costs, including medication prices, hospital admission fees, and the expenses associated with various medical treatments, have become unaffordable, especially for the elderly population. In response, insurance providers have raised the cost of insurance premiums. This increase in prices acts as a significant obstacle for the health insurance market. Many individuals worldwide have one or more chronic conditions, such as diabetes, Alzheimer's, or heart disease, which require costly treatments. The high costs associated with claim settlements pose a challenge for the health insurance market.
In the health insurance market, Preferred Provider Organizations (PPOs) hold the highest share and are expected to remain the market leader. PPOs offer greater freedom in choosing hospitals, doctors, and other benefits, making them highly desirable. Point-of-Service (POS) plans, with their lower premiums compared to PPOs, are the second-leading segment in the market. Health Maintenance Organizations (HMOs) provide individuals with the freedom to select doctors within their network and are considered one of the most affordable health insurance options. However, HMOs have a smaller market share due to lower awareness, and Exclusive Provider Organizations (EPOs) charge higher premiums than HMOs.
North America is projected to dominate the global health insurance market, primarily due to robust government efforts aimed at reducing Medicare and Medicaid costs and expanding health plan coverage. The region also benefits from favorable healthcare reimbursement regulations and the expensive nature of medical supplies. In the United States, for example, approximately 11.41 million people had registered through health insurance markets as of April 14, 2020. Europe is expected to be the second-largest market, driven by strict government regulations requiring citizens to have at least one health insurance policy and growing public awareness of the necessity of insurance coverage.
The Asia Pacific region is predicted to experience the fastest growth rate and exhibit the highest compound annual growth rate (CAGR) during the forecast period. Private providers are becoming more prevalent in this region, and governments at the state and federal levels are launching more healthcare programs. The prevalence of chronic diseases is also on the rise, with populous countries like China and India contributing to the expansion of the health insurance market. Latin America and the Middle East Africa are anticipated to have smaller market shares due to the low penetration of insurance companies in these regions. However, government measures to implement affordable healthcare policies will increase the number of people seeking health coverage.
The competitive landscape of the global health insurance market includes key players such as Aetna Inc., Allianz, Ping An Insurance (Group) Company of China, Ltd., AIA Group Limited, Assicurazioni Generali S.p.A., UnitedHealth Group, Aviva, AXA, Cigna, and Zurich. These companies are actively engaging in partnerships, alliances, and collaborations, as well as launching new products to meet the evolving needs of consumers. For example, Foreign Medical Group, Inc. (IMG) expanded its product offerings to support risk-free international travel, while Vitality integrated Samsung Health into its program to provide members with more ways to track and improve their health. Additionally, the acquisition of Bharti Axa General Insurance Company Limited's business by ICICI Lombard General Insurance Company Limited further expands the range of insurance products available to customers.
