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Introducing the 2015 Medical Insurance Inflation report

Pacific Prime has released our annual International Private Medical Insurance inflation (IPMI) report, which covers medical inflation seen in 2015. Here, Pacific Prime reviews the past year’s inflationary performance for multiple countries and insurance providers, and looks at what can be expected in the coming year.

Posted on Nov 19, 2015 by Robert McBroom

Please Note: Pacific Prime has published an updated version of the report on January 8, 2016, to reflect an error that has been corrected. In the origional report it was noted that the top three five-year average companies were: 

  • Aetna International (InterGlobal) - 6.1%
  • AXA PPP Healthcare - 7.9%
  • William Russell Limited - 9.1%

This is incorrect. The report has been updated to reflect the correct ranking which is as follows:

  • Aetna International (InterGlobal) - 6.1%
  • Allianz Worldwide Care SA - 7.1%
  • AXA PPP Healthcare - 7.9%

We appologize for this error. 

Global Overview

This year, the report (available now on our website) found that the average percentage increase of international medical insurance plans was 9.2%, a significant difference from the 7.1% increase seen in 2014. Global medical insurance inflation has repeatedly stayed close to 5% higher than Global Consumer Price inflation, and that it remains this year indicates a correlation between the two.

Attributing factors that have been previously identified continue to influence the global health insurance market, the most influential being the rising cost of healthcare, which has, according to the Global Medical Trend Rate Survey Report 2015 published by Aon Hewitt in 2015, inflated by 10.15% in 2015.

Causes of Inflation

There are four main drivers that we are highlighting this year to explain the reasons behind inflation:

  • New medical technology: The medical industry is among the top in terms of demand and use of new technology. New diagnostic techniques, pharmaceuticals, and procedures are constantly being researched and developed, all of which has a cost that will eventually be passed on to patients when they are approved for public use.
  • Imbalance of healthcare resources: In almost every country included in this year's report we have seen a continued imbalance in supply and demand. This imbalance is being exacerbated by an aging population worldwide. This will put more pressure on the private medical system which will inflate prices and therefore drive IPMI premiums higher as well.
  • Rising salaries for healthcare professionals: There seems to be a disparity between the average annual salaries of trained medical professionals and the average annual salaries of other skilled professionals. This can be attributed to the requirement for doctors to invest much more into schooling, insurance, and licensing.
  • Overuse of healthcare: Overutilization of medical treatment on a large scale means a higher number of higher cost claims submitted to insurers. In turn the main response IPMI providers have to offset this is increasing of premiums, so if overutilization increases, you will see premiums adjust up to reflect this.  

Noteworthy Findings

The IPMI market saw a number of changes in late 2014 and 2015 which have subsequently contributed to IPMI inflation. Some noteworthy points for 2015 include:

  • Allianz Worldwide Care SA had the lowest annual IPMI inflation: 6.7%
  • Over a 5 year period however, Aetna International (InterGlobal) has had the lowest average IPMI inflation: 6.1%
  • Two countries tied for the lowest inflation of 8.8% in 2015: Thailand and the Philippines
  • All countries showed inflation figures under 10% in 2015. The UK still had the highest IPMI inflation rate of any country included in the report: 9.6%

Find out more by visiting Pacific Prime’s 2015 International Private Medical Insurance report website, or click here to download it!

 

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