The personal accident and health (PA&H) insurance industry written premium sales in North America are projected to grow from $1.2 trillion in 2021 to $1.5 trillion 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, found GlobalData.

The leading data and analytics company’s latest report, ‘Personal Accident and Health Insurance Market to 2025’, 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 program, which increased the demand for PA&H policies. The US’s PA&H insurance industry grew by 5.3% in 2021.

Katam Prasanth, Insurance Analyst at GlobalData, comments: “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 realized over the next year. Overall, the US PA&H insurance market is expected to grow at a CAGR of 5.2% over 2021–26.

Prasanth continues: “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 hospitalization.”

The growing popularity of packaged plans covering multiple risks under one plan is expected to emerge as a prominent insurance driver. Over 2021–26, 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.

Prasanth adds: “In addition to the rise in healthcare costs, digitalization 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.”

Prominent insurers such as Anthem, United Health, Atena, and Cigna in the US offer telehealth services in their policies. While in Mexico, BBVA Bancomer, in partnership with Bupa Mexico, launched ‘your private doctor’ in 2021, the first fully digitized health insurance.

The emergence of hybrid virtual-in-person models focusing on specific care such as mental health and physiotherapy are also expected to see greater integration with private health insurance. An example includes Amazon Care services, covering virtual and inpatient services that can be serviced through private health insurance with applicable copay/ coinsurance and deductible as per the plan.

Prasanth concludes: “The North American PA&H insurance market is expected to continue to grow over the next five years and see more development encompassing digitalization and customization 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.”