LONDON, November 21, 2024 — For the third consecutive year, global medical costs are projected to increase by double digits, with little relief in sight. That’s according to a survey of health insurers conducted by WTW (NASDAQ: WTW), a leading global advisory, broking and solutions company. Survey respondents cited increased use of health services, rising pharmacy costs, and new medical technologies as the primary drivers of overall medical costs.
The WTW Global Medical Trends Survey found that insurers are projecting medical costs will increase by 10.4% in 2025, mirroring this year’s rate. The projected growth in medical costs varies by region. In North America, costs are projected to rise from 8.1% in 2024 to 8.7% in 2025. Costs are also projected to accelerate in Asia, the Middle East and Africa while Europe and Latin America will see slower increases.
While the trend may be slightly cooling in some regions, it is projected to remain elevated over the longer term. In fact, over the next three years, 64% of insurers anticipate higher or significantly higher medical trends globally. The demand for medical care is also not expected to decline in the near future. Two-thirds (67%) of insurers anticipate higher or significantly higher global demand for healthcare services over the next three years.
In the UK, private medical insurance costs are expected to increase by 12.6% in 2024, higher than the global average, and over three percentage points above than the European average. UK private medical inflation has been consistently higher than the European average for at least the last five years, driven by significant increases in demand for private healthcare services, pressure on public healthcare systems and higher levels of claims.
“With medical cost increases remaining at double digit levels, employers will need to brace themselves for more sticker shock.”
Linda Pham | Senior Director, Integrated & Global Solutions, WTW
“With medical cost increases remaining at double digit levels, employers will need to brace themselves for more sticker shock,” said Linda Pham, senior director, Integrated & Global Solutions, WTW. “The seemingly never-ending rise in costs poses a constant challenge for employers, who find these increases to be unsustainable for their organisations.”
| 2023 | 2024 | 2025 projected | |
|---|---|---|---|
| Global* | 10.7% | 10.4% | 10.4% |
| North America | 7.8% | 8.1% | 8.7% |
| Latin America | 10.8% | 10.4% | 10.1% |
| Asia Pacific | 10.9% | 11.9% | 12.3% |
| Europe | 11.0% | 10.1% | 9.4% |
| UK | 14.3% | 12.1% | 12.6% |
| Middle East/Africa | 10.9% | 10.4% | 12.1% |
*Global, Latin America and Europe numbers exclude Argentina, Venezuela and Turkey
Several major factors are contributing to continued high medical costs. The rise in new medical technologies and pharmaceuticals has greatly contributed to the increased cost of care globally. Public healthcare systems around the world have been overwhelmed due to high demand and limited resources available, leaving members to turn to and rely on private medical providers. Additionally, there has been a surge in healthcare utilization over the last few years (with a growing trend in use of mental health services), which continues to add to the overall cost of care.
“While recognising that some factors influencing costs may be out of their control, employers can hone-in on key initiatives to help control costs while boosting the value of their health benefits. These include but are not limited to promoting preventive care, evaluating vendor solutions and continuing to expand wellbeing offerings,” said Kevin Newman, Head of Health and Benefits Europe, WTW.
WTW conducted its 2025 Global Medical Trends Survey between June and August 2024. A total of 348 leading health insurers representing 75 countries participated in our survey. In addition to submissions from insurers, we received input from WTW local brokers representing 55 countries. The combined data covers 90 countries.
At WTW (NASDAQ: WTW), we provide data-driven, insight-led solutions in the areas of people, risk and capital. Leveraging the global view and local expertise of our colleagues serving 140 countries and markets, we help organizations sharpen their strategy, enhance organizational resilience, motivate their workforce and maximize performance.
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