International health insurance demand and future evolution

Everyone prefers being healthy than sick. Individual Health insurance demand derives from the financial risk emanating from illness and the consequent cost of the care needed to return healthy. One thing makes health care different from most other goods and services: it is also an investment; money spent on being healthy today will also have benefits in the future (impact on mortality rates).

Highlights:

  • The economics of health is different, and complicated by adverse selection and moral hazard issues.
  • At the global level, total health expenditure (HE) is growing faster than GDP, and increasing more rapidly in low and middle income countries (close to 6% annual growth on average) than in high-income countries (4%).
  • In Europe the stability in the HE growth rate reflects a rising coverage gap, only partially offset by private insurance (now €140 billions); high heterogeneity among countries reflects differences in public vs. private coverage.
  • There is a statistically stable long-term link between national income and private health insurance. The average income elasticity of private health insurance is significantly higher than one. So, on average and net of other factors, the importance of private health insurance is bound to grow along with economic development.
  • Empirical evidence for Italy shows that Voluntary Health insurance (VHI) is driven by income, households size, sex, age and education. The subscription to term life insurance on the household head is strongly and positively correlated to that of health insurance.

Read the full publication below.

INTERNATIONAL HEALTH
INSURANCE DEMAND
AND FUTURE EVOLUTION

RELATED INSIGHTS

TAKING MONETARY POLICY TO YET ANOTHER LEVEL
The presentation of the new Long Term goal and strategy on August 27 marks a deep shift in the Fed’s monetary policy. The new way inflation and the labour market will affect monetary policy will result in a marked downward bias to interest rates.
HEADWINDS FOR A BREXIT TRADE DEAL ARE RISING
Yesterday, a UK government fresh legislation proposal – the Internal Market Bill - led to heated discussions in the House of Commons. According to the UK government, the bill is intended to guarantee the smooth functioning of trade and prevent disruptions between the four nations of the UK, if no deal is reached with the EU by the end of this year’s transition period.
Q2 EARNINGS END ABOVE CONSENSUS, WITH THE US LEADING. EXPECT BETTER GROWTH AHEAD
Compared to our latest - positive - comment on the 20th of July, the yearly earnings growth of the median sector has improved both in the US and Japan, while the picture is less clear in Europe. Earnings surprises have also increased. On the contrary, reported sales growth and sales surprises have worsened since then.