UK Health Insurance Market (2023 - 2030)

Report Overview

The UK health insurance market was valued at USD 266.4 billion in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 6.5% from 2023 to 2030. Major factors contributing to the market growth include rising medical costs and growing awareness of health insurance benefits. The need for health insurance is also driven by the growing prevalence of various chronic and lifestyle-related disorders, which includes diabetes, cancer, neurodegenerative disorders, cancer, CVD, and others. For instance, according to a report by the Neurological Alliance in 2022, one in six individuals in the UK suffers from a neurological condition.

All permanent residents of the UK are provided with healthcare through the National Health Service (NHS), however, private health insurance is also accessible. Employers may offer private health insurance to their employees or individuals may pay for it themselves. Even though the NHS may dominate the country's healthcare system, the private sector holds a notable market share. The increase in the adoption of private health insurance in recent years due to the growing concerns about NHS waiting time, declining access, and quality of care worsened by the COVID-19 pandemic is expected to boost the market growth of the private sector over the forecast period. According to the Institute for Public Policy Research (IPPR), since the 1970s, the UK has had the largest increase in the adoption of private healthcare among the G7 countries. Furthermore, public health insurance does not provide coverage for all medical services it excludes dental treatments, eye care, and others, thus leading to the adoption of private health insurance.

The adoption of private insurance is seen more amongst the company-paid schemes as compared to the individually paid private insurance plans, as individual policyholders do not receive any tax benefits, whereas insurance that is given by the employer is viewed as a benefit. However, an increase in private health insurance premiums is expected to have a negative impact on market growth to some extent. According to a survey of 257 global medical insurers conducted by wtw (a British-American multinational, insurance services company), costs for private health insurance in the UK are anticipated to rise by 8.8% in 2023, slightly more than the 8.6% average for Europe.

Type Insights

Based on type, the UK health insurance market was dominated by the public segment in 2022. As in the UK, healthcare is publicly funded and generally covered by taxes. About 83% of total healthcare expenditure in 2021 was covered by the government in the UK. The National Health Service (NHS) is responsible for distributing most health insurance plans. However, the Covid-19 pandemic has started to supercharge the trend, with one in six people prepared to go for private health insurance rather than waiting, as a result of the NHS's poor access and quality of care.

The private segment is anticipated to grow at a considerable rate of 10.7% in the forecast period, limited coverage provided by government plans is one of the major factors contributing to the adoption of private health plans. The segment is further sub-segmented into company-paid PMI (private medical insurance), company-paid self-insured, and individual. The company paid PMI held the largest market share in 2022 and is further expected to continue its dominance in the forecast period. The company-paid self-insured segment is also expected to grow at a significant rate over the forecast period, as this plan includes various potential benefits for employers, including the ability to customize the self-funded plan more easily, the retention of funds when health claims are lower than expected, and the absence of state-levied premium taxes.

Demographic Insights

The adult segment dominated the UK health insurance market in 2022 by capturing a share of over 43.7%, as the majority of adults are covered by public or private health insurance, most commonly through private plans offered by their employers. Also, this age group is particularly susceptible to a number of lifestyle-related diseases that require immediate medical care, including diabetes, cancer, hypertension, and many others. Thus, the above-mentioned factors are augmenting the market growth for this segment.

The senior segment is estimated to showcase the fastest growth over the forecast period. This is because of the growing geriatric population in this country. According to an article published by the House of Commons Library, the geriatric population in the UK is expected to increase, with people aged 65 and over represent 24% of the population by 2043 (17.4 million people). Furthermore, the high prevalence of chronic illnesses among older individuals is higher and is associated with a higher cost of treatment due to their various morbidities, thus boosting the adoption of health insurance plans. Also, the spending by NHS is largely focused on older people and childbirth.

Key Companies & Market Share Insights

Key market participants are focusing on implementing a number of strategies, including partnerships and collaborations, and the launch of new products, in an effort to increase their presence and availability of services. For instance, in September 2022, Bupa and digital health business Babylon announced their partnership extension agreement for an additional three years in order to provide 2.3 million Bupa UK health insurance clients with digital health services. Some of the prominent players in the UK health insurance market include:

• Cigna

• Bupa

• AXA Health

• Aviva plc

• Vitality Health

• Freedom Health Insurance

• Western Provident Association

UK Health Insurance Market