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Global health insurance to hit $5.6tn by 2032

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By Abraham Adekunle

West African giant Nigeria strives to catch up with the growing sector.

As forecasted by Emergen Research in a report, the global health insurance world is rapidly expanding. It is expected to reach a staggering USD 5.6 trillion by 2032 per the report. However, while the world braces for this growth, Nigeria healthcare insurance sector, albeit growing, appears to be in an embryonic stage, grappling to match up with international benchmarks. As of 2022, the global health insurance market secured a solid footing with a value of $3.30 trillion.

Projected to advance at a 5.6-percent Compound Annual Growth Rate (CAGR), this growth stems from factors such as the increasing GDP and healthcare expenditures, an aging global population, the surge of chronic diseases, and the incentivizing policies of governments. Key market players are forging significant partnerships and investing in innovations. The alliance between Star Health and Allied Insurance with Standard Chartered Bank aims to bring novel insurance products to India’s burgeoning market. Additionally, mergers and acquisitions, alongside R&D initiatives by insurers, are poised to revolutionize product offerings, as evidenced by Future Generali India’s introduction of DIY Health and Humana’s acquisition of Inclusa, reflecting an industry in rapid evolution.

Expanding population responsible for growth in the sector in Nigeria.

Despite expectations to expand from $1.83 billion in 2022 to $3.53 billion by 2030 (at a CAGR of 8.6 percent), Nigerian health insurance landscape remains at its preliminary stages. In 2019, Nigeria allocated a mere 3.03 percent of its GDP to national health expenditures, equating to roughly $71 per person. The market is dissected into various segments, encompassing providers, coverage, plans, and end-users, with notable entities such as Leadway Health Insurance and Hygeia HMO steering the market.

Thus, the incremental growth in Nigeria is attributed to an expanding population, which signifies a vast untapped market, considering over 90 percent of Nigerians are uninsured. Rising healthcare costs, driven by costly medical technology and workforce, are necessitating the need for health insurance to help manage these financial burdens. Governmental support, particularly through programs like the National Health Insurance Scheme (NHIS), is nurturing a conducive landscape for the insurance market to flourish. But despite these drivers, the high cost of health insurance premiums, influenced by medical inflation, still poses a substantial barrier to market growth.

Nigerian market keen on achieving same growth as global counterparts.

Issues such as claim approval rates and complexity in understanding policies, as highlighted by Pristyn Care Data Labs’ survey in India, mirror challenges likely faced by Nigerians as well. The Nigerian market is keen on achieving the same growth trajectory as its global counterparts. The critical illness segment, leading in global market share, underscores the imperative for comprehensive coverage in Nigeria, where critical illnesses remain a significant health threat. Also, the health insurance sector globally is on an unprecedented upward trend.

It signals a future of enhanced financial security in healthcare. For Nigeria, the potential is vast, but the realization of this potential hinges on the country’s ability to amplify its healthcare infrastructure, increase insurance penetration, and continue to foster a supportive environment for health insurance providers. As the world edges closer to a multi-trillion-dollar health insurance market, Nigeria stands at the crossroads, eyeing an opportunity for robust growth and a healthier future for its citizens.

Concept of universal health coverage central to healthcare plan.

Finally, the government has some plans for healthcare in Nigeria. They will transform Nigeria healthcare system is underpinned by the concept of universal health coverage (UHC) to ensure that quality health is guaranteed for all Nigerians without financial hardship by making healthcare accessible to all. The administration recognizes the importance of governance and leadership in the health sector as it proposes to implement political and institutional reforms that will improve coordination between the federal, state, and local governments and ensure that healthcare services are delivered in a standardized, equitable, and accountable way.

Related Link

Emergen Research: Website

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