Health Insurance Carriers Industry Profile

Companies in this industry underwrite health and medical insurance policies and administer group hospitalization plans, health maintenance organization (HMO), and preferred provider organization (PPO). Major companies include Aetna, Anthem Blue Cross and Blue Shield, Cigna, Humana, and UnitedHealthcare (all based in the US); as well as Aegon (the Netherlands); Allianz (Germany); and Bupa (UK).

Worldwide, demand for private health insurance is rising. Because of COVID-19, private health insurance demand in developing countries such as India and China experienced a sudden demand growth. Global healthcare spending reached about $10 trillion in 2021, according to the World Health Organization (WHO).

The US health insurance carriers industry includes about 5,400 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $860 billion.

COMPETITIVE LANDSCAPE

Demand for health insurance products is driven by cost of medical care. The profitability of individual companies depends on?efficient operations?and the ability to enter favorable contracts with health care providers. Large companies and organizations have advantages in negotiating contracts with providers.?Small companies?can compete successfully by specializing in types of coverage or populations. The US industry is highly concentrated: the 50 largest companies generate about 85% of revenue.

Health payment reform efforts have altered the competitive landscape for health insurance companies around the globe. The Affordable Care Act (ACA) mandated health care coverage availability for all Americans beginning in 2014; the law also eliminated some common exclusions, such as pre-existing ...