This report divides our findings into four major sections:
Average IPMI inflation in 2017
By taking the average IPMI inflation figures from the ten locations included in this report, we found that the IPMI inflation rate was 7.0% in 2017. This represents a 2.2 percentage point decrease from 2016's average inflation figure of 9.2%.
The overall aim of this report is to provide you with an understanding as to why inflation was lower in 2017, and whether this is a trend we can expect in the future. The Average IPMI Inflation in 2017 section of the report also presents a historical, year-on-year overview of inflation compared with CPI inflation from 2009 to 2017.
The Insurer section of this report discusses average IPMI inflation of the eight major insurers included in our study. From our analysis, we can report that in 2017 Cigna Global had the lowest average premium increase worldwide.
We are also pleased to report that, as with the last report's findings, Aetna International had the lowest five-year average IPMI inflation.
It is important to note that the inflation results reported here do not mean that the above providers offer the lowest premiums. Rather, their plans had the lowest premium inflation in 2017. The Insurer section of the report presents more information on inflation by insurer.
Based on our analysis of 2017's figures along with current industry trends we believe that two drivers listed as 'emerging' in previous reports can now be considered key drivers, bringing the total up to six:
- New medical technology
- An imbalance of healthcare resources
- Increased compensation for healthcare professionals
- Healthcare overutilization
- Changing population dynamics (new key trend)
- The increasing adoption of non-industry specific technology (new key trend)
That said, we have also identified two short-term drivers that had an impact on premium inflation in 2017 and will likely have an impact on premiums in 2018 as well:
- Increased compliance and regulations
- A more favorable global economy
We include an in-depth look at the two factors above in the Inflation Drivers section of the report.
Analysis of inflation by country
In order to provide a more thorough analysis of IPMI inflation, we have included a country-by-country breakdown of inflation. Each of the ten countries in the report has an inflation overview along with a look into their local drivers of inflation.
One thing of note here is that the global averages presented in this report exclude Dubai as plans there are drastically different from international plans sold elsewhere. However, we continue to believe that this Emirate is one of the most important locations in terms of IPMI largely due to their current coverage regulations.
In the Middle East section of the report we have included an in-depth look at Dubai along with the impact it has had on inflation in the region and globally. If you are interested in learning more about the potential future of international health insurance, it is well worth reading this section.
This report has been written with one major assumption: The primary driver behind IPMI inflation, and any health insurance inflation for that matter, is the cost of healthcare. As has been mentioned in previous versions of this report, IPMI inflation is usually within 1-2 percentage points of healthcare inflation.
According to Aon's 2017 Global Medical Trend Rates report, in 2017, the global average medical trend rate was 8.2%. This is just over one percentage point higher than the global average IPMI inflation rate of 7.0%, which once again highlights the fact that the two trends are closely related.