The Spanish healthcare system is known to be one of the best in the world. It provides free healthcare to almost all its citizens. The system is funded by social security payments and hence, most of the citizens do not require any private health insurance. All workers in Spain, whether employed or self-employed are required to pay income tax (social security payment) which automatically makes them eligible for free state health insurance, which is known as NHS or National Health Service. This free service has left little scope for private insurance players in the country. However, sometimes, private health insurance is required because of some special need. |
According to the market Research Report "Personal Accident and Health Insurance in Spain, Key Trends and Opportunities to 2020", private insurance players in Spain offer special packages which are specific to age, health condition and other circumstances. In addition, because of increasing debt, the government has decided to reduce the spending on public health insurance. This has resulted in a thriving insurance industry in Spain as people are expected to move towards private insurance. The personal accident and health segment accounted for the lowest industry share of 16.2% in 2015, in terms of gross written premium. The strong social security and healthcare system affects private health insurance; private healthcare expenditure as a percentage of GDP rose marginally, mainly due to the high quality of private healthcare. The decreasing population will affect the demand for health insurance over the forecast period. The penetration rate of the personal accident and health insurance segment stood at 0.8% of GDP in 2015. The number of deaths due to road accidents in Spain fell by -70.6% between 1995 and 2015.
Although the insurance sector is growing in Spain, the personal accident and health insurance segment is not doing that well. This segment constitutes a meagre small fraction of the total premiums of the complete insurance industry. Because of NHS, a strong government backed insurance service, the private health insurance sector extremely competitive and players frequently engage themselves in price wars. Still, the profit margins are witnessed and hence this segment is estimated to expand.
The employers, for the safety of their employees take most of the accident insurance. Now because of the economic crisis, a decrease in the premium of accident insurance category had been noticed. Nevertheless, after 2010, some growth has been seen in this segment. Although the growth is not very significant, but the situation is expected to improve in coming years as, the economy is again moving towards a stable growth rate. However, health insurance segment has not seen this downward trend. Health insurance segment is growing constantly for past few years. One of the major reasons for this is the significant increase in the ageing population of Spain. With the increase in average age of population, more and more are opting for easily accessible and lucrative private health insurance. Initially, because of its highly competitive nature, only a few large players were there in the market. Now, as the government has reduced its spending, a lot more players have come into the market. ASISA Somos Medicos, Adeslas Segur Caixa, DKV Seguros are few of the players in the market.
It can be easily observed that although private insurance players see a tough competition from NHS or the free government insurance, still the lengthy waiting times at public healthcare centres, long processing period for accident insurance claim and reduced government expenditure on free insurance is driving more and more people towards private insurance. Resultanatly, a significant growth rate can be expected in the personal accident and health insurance in Spain.
Topics Covered in the report
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