The PA&H insurance industry in Australia is predicted to grow at a CAGR of 6.4% from AUD32bn ($22.1bn) in 2024 to $27.8bn in 2028.

According to GlobalData, Australia’s PA&H insurance industry will grow by 5.9% in 2024, thanks to increased health awareness after the Covid-19 pandemic. This is also attributed to rising healthcare costs and changing demographics such as an againg population.

Prasanth Katam, insurance analyst at GlobalData, said: “Australia’s PA&H insurance industry continued its growth momentum from 2022 and grew by 6.4% in 2023, registering the highest growth in the last five years. The growth can be attributed to an increase in the membership of private health insurance. The trend is expected to continue in 2024.”

With hospital and treatment costs rising rapidly after the pandemic, many Australians have selected private health insurance policies over public health insurance. This is to gain higher coverage, timely access to treatments and flexible care options.

According to Private Healthcare Australia (PHA), 55.1% of the Australian population has opted for private health insurance as of November 2023. The number of people opting for private health insurance in the country increased to 14.7 million people as of November 2023, indicating an annual growth rate of 2.3% compared to 14.37 million Australians in November 2022.

Katam continued: “Changes in the country’s demographic factors such as the aging population as well as a rise in chronic diseases such as diabetes and heart diseases will increase the demand for health insurance, supporting PA&H insurance growth.

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“The rising healthcare costs are putting pressure on premiums, which will make people selective while purchasing health insurance. However, the increased premiums are not expected to have a significant negative impact on the growth of the Australian PA&H industry over the next five years.”