According to new research published by Finaccord, the global market for international health insurance for expatriates, students and affluent residents was worth around USD 16.5 billion in gross written premiums in 2018 of which around USD 4.8 billion was due to new policies bought in 2018 itself. This total breaks down between around USD 12.4 billion to expatriates apart from students, around USD 3.3 billion to students and around USD 812.2 million to affluent residents with the latter segment increasing most rapidly of all.
Commented David Bowles, Consultant at Finaccord, "The worldwide market for international health insurance is both large and fast-growing. Its value has now exceeded that of travel insurance, which Finaccord estimates at around USD 14.7 billion in premiums for stand-alone cover in 2018. Although it constitutes a small segment within the global market for all types of health insurance which is valued at around USD 1.55 trillion for 2018, its compound annual growth rate of 9.0% between 2014 and 2018 is comfortably ahead of that for health insurance in general which is recorded at around 7.2% over the same period."
Overall, there were around 97.4 million expatriates and students worldwide eligible for international health insurance in 2018 defined as those temporarily resident in a country other than their country of origin for a period of between three months and ten years. These are composed of five main potential customer types, namely individual workers (most numerous at 83.3 million), corporate and other transferees (including diplomats and employees of charities and NGOs), retired individuals and students plus 'others' (defined as non-employed spouses and children of customers in the other four categories).
"By region of origin, these eligible individuals are most commonly from countries in the Asia-Pacific region given that there was a total of around 47 million of them in 2018," continued David Bowles. "Furthermore, as a destination region, countries in the Middle East attract the most such individuals albeit those going there are among the least likely to acquire international health insurance. Rather, insurance take-up rates are highest among expatriates and students heading to destination countries in Africa, Latin America and North America, with the high cost of healthcare in the latter region, especially the US, a particularly important factor in this respect. Overall, just over 10% of all individuals eligible to buy international health cover actually do so in practice."
Looking ahead to 2022, Finaccord's research suggests that the compound annual growth rate in the value of this market is likely to pick up to 11.5% which means that the market will be worth around USD 25.5 billion by that year in terms of premiums. However, this expansion will be due primarily to rising average policy prices and secondarily to growth in the number of expatriates and students eligible for international health insurance rather than to an increase in the take-up for this type of cover, which is expected to advance only modestly.
Concluded David Bowles, "If underwriters and intermediaries of international health cover can find ways to improve the distribution of their products then even a rise in take-up rates that is only slightly higher than our prediction could bring about a substantial increase in the forecast market value by 2022."