Macroeconomic drivers of private health insurance coverage


Macroeconomic drivers of private health insurance coverage

Predicting demand

Deloitte Access Economics was engaged by nib Health Insurance to examine the macroeconomic drivers of private health insurance coverage. Macroeconomic factors were found to predict demand for health insurance policies. In particular, changes to the unemployment rate, average weekly earnings and the Australian SPI 200 Total Return Index were all found to have a statistically significant impact on demand. For statistical reasons the demand for health insurance was specified using the change in the year on year growth rate of health insurance policies. It was found that growth in PHI policies would be lower:

  • Three quarters after a worsening (increase) in the unemployment rate
  • Two quarters after a fall in the growth rate of average weekly earnings
  • One quarter after a fall in the growth rate of the SPI 200 Total Return Index.

Using Deloitte Access Economic’ forecasts for the macroeconomic inputs to the model, it was estimated that over the next three years demand for health insurance policies would grow at an average rate of 3.08% per year, resulting in total policies held reaching 6.2 million at the end of the forecast horizon.

Published: September 2011

Macroeconomic drivers of private health insurance coverage
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