Peru Private Health Insurance Market Remains Underpenetrated, Says Timetric
04 Jan 2013 • by Natalie Aster
The written premium of the Peruvian personal accident and health insurance segment increased at a CAGR of 11.3% during the review period. The increase was partly due to rising medical expenses, increasing numbers of international travelers from Peru, and favorable health insurance reform. The growth was also attributed to healthy economic development in Peru after the global financial crisis, and rising annual disposable income. These factors are also expected to support growth over the forecast period, and the personal accident and health segment is expected to increase at a CAGR of 7.6%.
A highly competitive and concentrated segment
The Peruvian personal accident and health insurance segment is one of the most concentrated in Latin America. According to the report “Personal Accident and Health Insurance in Peru, Key Trends and Opportunities to 2016” by Timetric, only 11 insurers were licensed to conduct personal accident and health insurance business in Peru in 2011, with the top five insurers accounting for a combined market share of 92.9%. Most life and non-life insurers also operate in the personal accident and health segment, offering broadly similar products and services. Improving social welfare health insurance programs and growing economic development are also likely to attract new businesses and intensify competition over the forecast period.
Personal Accident and Health Insurance in Peru, Key Trends and Opportunities to 2016
Published: November, 2012
Price: US$ 1,950.00
An underdeveloped private health insurance market offers opportunities for insurers
Despite Peru’s rising medical expenditure and insufficient government-funded health insurance programs, the private health insurance market remains underpenetrated. Peru’s private insurance market covered only 2.1% of the total population, and the personal accident and health segment’s penetration as a percentage of GDP stood at 0.14% in 2011, compared to 0.21% in Colombia and 0.31% in Chile. This low penetration indicates growth opportunities for private insurers in the country.
Healthcare reform to spur the segment’s growth
The Peruvian government has enacted several laws to establish universal health insurance in the country. In November 2010, the government released a set of laws, known as a Supreme Decree, making it compulsory for all Peruvians to obtain health insurance and to produce a health insurance certificate when applying for financial assistance such as loans from banks or other financial institutions. Demand for private health insurance is expected to rise as a result.
Strong economy growth helps consumer purchasing power
Despite the global financial crisis and several setbacks, Peru recorded healthy economic growth with rising consumer incomes during the review period. Peru’s GDP at constant prices in local currency grew at annual rates of 9.8%, 0.9% 8.8%, and 6.9% during the review period, while the IMF expects the Peruvian economy to grow at annual rates of 5.5%, 6.0%, 6.0%, 6.0% and 6.0% respectively during 2012¬¬–2016. Strong GDP growth and rising disposable incomes encouraged Peruvians to buy property and cars, increasing the demand for property and motor insurance.
More information can be found in the report “Personal Accident and Health Insurance in Peru, Key Trends and Opportunities to 2016” by Timetric.
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