The personal accident and health (PA&H) insurance industry written premium sales in North America are projected to grow from $1.2tn in 2021 to $1.5tn in 2026 at a compound annual growth rate (CAGR) of 5.2%, backed by an increase in health insurance awareness and rising healthcare costs, due to the COVID-19 pandemic, according to GlobalData in a report titled ‘Personal Accident and Health Insurance Market to 2025’.
The report found that the US is the leading and most advanced healthcare market globally and accounts for 97% of North America’s PA&H insurance premiums. Supported by the recovery in employment, easing of travel restrictions and double-digit enrolments in the Medicaid programme, which increased the demand for PA&H policies. The US’ PA&H insurance industry grew by 5.3% in 2021.
GlobalData insurance analyst Katam Prasanth said, “A prime focus area for PA&H insurers will be the changed abortion rules and regulations in North America following the US Supreme Court’s decision to overturn Roe v Wade. With 50% of the US states expected to enact the ruling, insurers will have to amend their policies to accommodate this change.”
The ruling will also have an impact on both individual and corporate travel policies as people will look to access out-of-state healthcare services. The full impact of the ruling is expected to be realised over the next year. Overall, the US PA&H insurance market is expected to grow at a CAGR of 5.2% over 2021–26.
Mr Prasanth added, “Canada accounts for a 1.6% share of the regional PA&H premiums. Rising healthcare costs have created demand for private insurance to supplement healthcare services not covered by public health schemes such as prescription drugs, dental, vision and hospitalisation.”
The growing popularity of packaged plans covering multiple risks under one plan is expected to emerge as a prominent insurance driver. From 2021 to 2026, the PA&H insurance market in Canada is estimated to grow at a CAGR of 5.9%.
Mexico accounted for the remaining 1.4% share in the regional market. It is the fastest growing market with 19.3% growth in 2021 as pandemic-driven insurance awareness helped increase health insurance demand. The industry is expected to grow at a CAGR of 8.1% over 2021-26.
Mr Prasanth noted, “In addition to the rise in healthcare costs, digitalisation in healthcare, increased uptake for telehealth services propelled by the pandemic and mental health awareness also supported the growth of PA&H insurance in the region.”
He expected the North American PA&H insurance market to continue to grow over the next five years and see more development encompassing digitalisation and customisation to address the rising medical costs. However, regulatory developments related to the recent ruling on abortion ban and recession concerns from the ongoing Russia-Ukraine crisis could further impact its growth. M