LONDON, 3 May 2016 - UK health insurance costs are anticipated to grow by 6.5% in 2016, the largest increase in five years, according to Willis Towers Watson's 2016 Global Medical Trends report*. The analysis shows that high claim volumes mean that health insurance costs are increasing year-on-year at one of the highest rates in Europe.

Within Europe, among very varied health systems, the UK experience surpasses that of France and Spain, which are expected to have modest increases of 3.5% and 1.2% respectively. Italy (0.8%), Portugal (2.1%), Greece (4.7%) and Belgium (5%) are also anticipated to experience lower health insurance inflation this year, as they have in each of the past three years.

According to the report, the UK did not suffer the largest price hikes in Europe. Nordic countries such as Norway (10%) and Sweden (8%) will experience higher cost increases, and Russia tops the European table for the second year running with 15% cost increases.

Globally, the average health insurance price increase for 2016 is estimated to be 9.1%, up from 8% last year and 7.5% in 2014, so European cost increases are relatively modest compared to other continents. In the Middle East and Africa, health insurance inflation rose from 10.3% in 2014 to 12.6% in 2015, and is expected to continue to rise.

Jeremy Hill, director in Willis Towers Watson's Global Services and Solutions business, said: 'Health insurance remains a key employee benefit in the UK, but the effect of aging workforces, costly and complex treatments, and technological advancements is that health insurance inflation in the UK is higher than in most of Europe. Employers continue to keep health costs under review, with many looking at cost-sharing mechanisms to contain cost, as well as looking at health and wellbeing approaches to improve the underlying health of employees.

'At the same time, UK providers are attempting to curtail these annual price increases. As both the provider market and insurers have consolidated, insurers are using their size to leverage more favourable pricing agreements with key hospital groups and service providers. In addition, some smaller insurers are forming independent healthcare purchasing alliances to procure competitively priced hospital treatment for their members.'

The report shows that, during the last five years, the annual increase in the price of UK health insurance has been between 5.1% and 6.4%, a period of relative stability compared to the period from 2007 to 2011, when UK prices spiked by between 8% and 9.6% each year. But the cost increases have been increasing steadily in the last three years, from 5.1% in 2013 to 6.4% last year and predicted to hit 6.5% this year.

According to the report, the main causes of high price increases in UK health insurance are: an ageing workforce more likely to claim on their insurance; continuing delays in NHS treatment driving individuals to seek a private-sector solution; and the increasing availability and use of costly medical treatments.

Jeremy Hill said: 'The cost of health insurance continues to rise ahead of inflation almost everywhere in the world. While the last five years have seen relative stability in UK cost increases, the trend is starting to creep upwards and 2016 is predicted to surpass last year's increase - for the third year in a row. In the last ten years, the cost of health insurance in the UK has almost doubled putting enormous pressure on budgets.'

Notes to editors

*The 2016 Willis Towers Watson Global Medical Trends report analyses responses from 174 leading health insurers operating in 55 countries. Most participants, surveyed in October and November 2015 have at least a 10% share of the group health insurance market in their country.

About Willis Towers Watson

Willis Towers Watson (NASDAQ: WLTW ) is a leading global advisory, broking and solutions company that helps clients around the world turn risk into a path for growth. With roots dating to 1828, Willis Towers Watson has 39,000 employees in more than 120 countries. We design and deliver solutions that manage risk, optimize benefits, cultivate talent, and expand the power of capital to protect and strengthen institutions and individuals. Our unique perspective allows us to see the critical intersections between talent, assets and ideas - the dynamic formula that drives business performance. Together, we unlock potential.

Willis Towers Watson plc issued this content on 03 May 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 03 May 2016 09:03:07 UTC. Original document available at https://www.willistowerswatson.com/en/press/2016/05/UK-health-insurance-costs-double-in-a-decade