Swiss Re highlights growing health and mortality protection gaps across Asia

Swiss Re, a reinsurer known for its expertise in risk management and insurance solutions, has released a detailed report exposing the widening gaps in health and mortality protection across Asia.

The report includes findings from a survey involving more than 12,000 consumers in 12 different markets, offering valuable insights into the insurance features that could help close these gaps.

According to Swiss Re, Asia’s health protection gap (HPG) has increased by 21%, rising from USD 212 billion in 2017 to USD 258 billion in premium equivalent terms in 2024.

This gap reflects the portion of healthcare expenses that households must cover themselves, which often strains family finances. Emerging markets are responsible for the bulk of this shortfall, accounting for 73% or USD 188 billion.

China holds the largest HPG at USD 143 billion, followed by India at USD 32 billion, primarily due to their large populations. Among advanced economies in the region, Japan experiences the highest gap at USD 24 billion, driven by an ageing demographic and the increasing burden of chronic diseases that lead to longer treatment durations and higher medical costs.

The consumer survey conducted by Swiss Re across 12 markets revealed strong interest in both life and health insurance, especially in emerging markets, where 60% of respondents expressed a willingness to purchase life coverage.

Apart from China, households across the surveyed markets reported greater financial stress from out-of-pocket healthcare costs in 2024 compared to 2017. China’s relatively stable situation is attributed to recent healthcare reforms that expanded insurance coverage, lowered treatment costs, and improved access to medical services.

Swiss Re’s analysis identifies key factors behind the growing health protection gaps, including ageing populations, rising demand for medical care, and continuous medical inflation. The survey shows that treatment costs related to chronic diseases (47%) and critical illnesses (50%) contribute almost equally to financial strain.

Price and a limited understanding of insurance products are major reasons why consumers refrain from purchasing coverage. Swiss Re emphasizss that insurers should focus on enhancing consumer education about the benefits of insurance while aligning expectations with the premiums paid.

Economic factors also play a role in dampening insurance uptake. Nearly half of respondents in developed Asian markets cited the rising cost of living as a significant concern, while around 60% in emerging markets identified job security fears as their top worry.

Swiss Re’s report also highlights the mortality protection gap (MPG), which measures the uninsured financial burden families face after the loss of the primary income earner.

The MPG for Asia reached nearly USD 132 billion in premium equivalent terms in 2024, marking a 35% increase from USD 97 billion in 2017. More than 80% of this gap comes from emerging economies, where rapid income growth has yet to translate into widespread insurance adoption.

To address these protection shortfalls, Swiss Re recommends a range of solutions including bundled life and health insurance policies, severity-based coverage options, and value-added services that encourage preventive healthcare.

Bundling policies can help reduce premiums by streamlining administrative processes, and the company’s survey found that over 90% of consumers prefer insurance plans combining life coverage with health benefits such as medical reimbursements, hospital cash payments, and critical illness protection, rather than standalone life insurance.

John Zhu, Chief Economist APAC, Swiss Re Institute, commented: “Mortality protection gaps have widened in emerging markets in Asia, but this is not all bad news, as it was in large part due to rapid income growth in these markets.

“Health protection gaps on the other hand are widening due to rising cost of treatments, which our new consumer survey found to have become more stressful to household finances. The challenge for the insurance industry then is to make sure products catch up and remain relevant to consumers’ needs to narrow protection gaps.”

Vincent Eck, Head of Key Accounts & Origination APAC ex. China, Swiss Re, added: “Insurance is generally seen as protection and ensuring peace of mind. However, there is room to grow insurance for long-term health needs and preventive care-related medical services.

“The findings from our latest report underscore the importance of proactive strategies and data-driven insights in creating value and security for our clients and their communities. Both emerging and advanced markets show a preference for value-added services like medical check-ups, health management services, and rewards for healthy behaviours.

“Amid economic uncertainties and an evolving risk environment, our commitment to innovation and resilience ensures that we not only help our clients adapt but lead the way in providing comprehensive life and health insurance solutions.”

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