According to Allied Market Research, the size of the global healthcare insurance industry stood at $1.98 trillion at the end of 2020. The COVID-19 pandemic has resulted in an increased demand for health insurance around the world. The size of the industry is expected to compound annually at an average rate of 9.7% to reach $4.15 trillion by 2028. People consider health insurance services as an integral tool to share medical costs during accidents, illnesses, and injuries. The impact of the delay in routine healthcare services during the COVID-19 pandemic played favorably for health insurance companies. However, this effect was also offset by the increase in demand for COVID-19-related testing and treatment claims.
The Protection Gap: Addressing Economic Losses in Health Insurance and Beyond
Experts believe that health insurance companies that can innovate and transform their offerings according to customers’ demands will be able to grow during these uncertain times. The uncertainty related to geopolitical and macroeconomic outlook has made business stability the top priority amongst health insurance companies such as Centene Corporation (NYSE:CNC), UnitedHealth Group Incorporated (NYSE:UNH), and Elevance Health, Inc. (NYSE:ELV).
In addition, the protection gap is growing with every passing day as the insurance related to natural disasters, cyber attacks, and health, only partially covers the actual economic losses related to these events. For instance, in 2019, more than 400 natural disaster events resulted in an economic loss of $232 billion, but only $71 billion of the loss was insured. This gap is expected to increase as the global population and life expectancy rise. These factors would provide the health insurance industry with a bigger market to target.
According to the Swiss Re Institute, the insurance industry could increase its bottom line by $60 – $80 billion annually if it works on reducing the insurance protection gaps. As of 2021, the global insurance protection gap stood at $1.4 trillion, while the global health protection gap was estimated at $737 billion. Experts believe the higher government spending on healthcare during the COVID-19 pandemic helped reduce the health protection gap; however, it is expected to increase again as the pandemic has eased and governments around the world are shifting their focus towards other activities. Experts also highlight the low level of insurance literacy as a major challenge in gaining widespread market penetration. According to research conducted by French insurer SCOR, a significant number of people do not purchase insurance because they cannot comprehend the terms and conditions. The study comprised 12,000 consumers from around the world. Governments, regulators, insurance companies, and employers must come together to address the challenges to boost the adoption of health insurance.
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Our Methodology
We carried out thorough research utilizing a variety of dependable sources, including company and industry reports and financial databases, to determine the largest health insurance companies in the world. We took into account pertinent aspects, like the company’s consumer base, product offerings, business models, and global reach, to assess its scale of operations. The companies have been ranked in ascending order of their trailing twelve months (ttm) revenue. The list includes both private and public limited companies.
Biggest Health Insurance Companies in the World
12. MetLife, Inc. (NYSE:MET)
TTM Total Revenue: $68.95 billion
MetLife, Inc. (NYSE:MET) is a New York-based provider of annuities, employee benefit programs, and insurance. The company provides a wide range of health insurance products like accident insurance, disability and absence services, hospital indemnity, critical illness, and cancer insurance.
In a research note issued on January 6, Jimmy Bhullar at JPMorgan increased the target price for MetLife, Inc. from $77 to $80 and maintained an Overweight rating on the stock. The analyst anticipates the company’s life and health insurance segment to perform well in 2023 as the benchmark interest rates are expected to rise further. However, this could be offset by a weak economy that could dent demand along with a higher risk of credit losses.
11. Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (MUV2.DE)
TTM Total Revenue: $71.50 billion (€67.09 billion)
Münchener Rückversicherungs-Gesellschaft Aktiengesellschaft in München (MUV2.DE), more commonly known as Munich Re Group, is a German insurance company established in 1880. The company provides a wide variety of reinsurance products related to healthcare.
Munich Re has established an ambitious roadmap for the next five years called the Munich Re Group Ambition 2025. While preserving and reinforcing the core of its business model, the company aims to drive the transition towards new business models. The company plans to enhance its market position in Germany and achieve profitable growth in international business, B2B operations, and direct customer offerings.
10. CVS Health Corporation (NYSE:CVS) [ Owner of Aetna]
TTM Total Revenue (Aetna): $82.2 billion
CVS Health Corporation (NYSE:CVS) is a Woonsocket, Rhode Island-based healthcare company that is also a provider of health insurance services.
The company acquired Aetna in 2018 to expand its presence in the health insurance segment. Based on 2021 total health plan enrollments, CVS Health Corporation secured the sixth position with 2,574,348 enrollments. In a note issued to investors on February 9, Brian Tanquilut at Jefferies increased the target price for CVS Health Corporation from $130 to $143 and maintained a Buy rating on the stock following the strong Q4 2022 results. The company also disclosed that it intends to acquire Chicago, Illinois-based healthcare company Oak Street Health, Inc. (NYSE:OSH) for a sum of $10.6 billion. The analyst anticipates the earnings from Oak Street to contribute towards the company’s bottom-line growth after 2024.
Vltava Fund shared its outlook on CVS Health Corporation in its Q3 2022 investor letter. Here’s what the firm said:
“CVS is a leader in the provision of healthcare services in the USA. It has three main businesses: an enormous network of pharmacies, a health insurance company, and “prescription benefit management”, which is a kind of intermediary between insurance companies and pharmacies. This is the result of large acquisitions over the past 15 years – most notably of Caremark (2007) and Aetna (2018). The markets had deemed its acquisition of health insurer Aetna too expensive (and we agree), so CVS stock then fell into disfavour for a few years.
We took advantage of this in the summer of 2020 and brought the stock into our portfolio at a time when its price was pressed down still further by the coronavirus pandemic. CVS is a giant. It has revenues of USD 300 billion, making it one of the largest companies in the world. It is a relatively stable and highly profitable company with strong free cash flow. Over the past few years, CVS has focused primarily on reducing debt.
This is already much lower than it had been after the Aetna acquisition, and most of the cash is now likely to go to shareholders through share buybacks or be used for smaller acquisitions to grow the company further. CVS trades at about 11 times annual earnings, which is a very appealing valuation given the expected future growth in profitability and overall modest cyclicality in its business.”
10. Humana Inc. (NYSE:HUM)
TTM Total Revenue: $92.87 billion
Humana Inc. (NYSE:HUM) is a Louisville, Kentucky-based health insurance company founded in 1961.
The corporation occupies the 114th position on the 2023 America’s Best Large Employers list curated by Forbes. Furthermore, based on the total health plan enrollment data for 2021 compiled by Forbes, Humana Inc. is the 11th biggest health insurance company in the US, with an enrollment of 887,612 members. Following the Q4 2022 results, George Hill at Deutsche Bank assigned Humana Inc. stock a target price of $562 along with a Buy rating on February 28. The analyst highlighted the company’s decision to exit the Employer Group Commercial Medical Products business company. The business segment included the Federal Employee health benefit plans and rewards programs that are fully insured and self-funded.
Here’s what Renaissance Investment Management said about Humana Inc. in its Q3 2022 investor letter:
“In September, We added a new position in the Health Care sector with Humana Inc. (NYSE:HUM), one of the largest managed care providers in the U.S. with a focus on medical insurance for the Medicare Advantage market. We believe Humana is poised to see a reacceleration in Medicare Advantage membership growth after making large investments in its program benefits earlier this year. In addition, we like the demographic tailwinds for the entire Medicare Advantage market, as the next four years should provide the highest number of baby boomers yet qualifying for Medicare benefits.”
9. Kaiser Permanente
TTM Total Revenue: $95.4 billion
Kaiser Permanente is an Oakland, California-based healthcare organization founded in 1945.
The company provides a variety of healthcare services, including health insurance, to individuals and families. Kaiser Permanente is a managed care organization, which means that it provides healthcare services through a network of doctors, hospitals, and other healthcare providers. Kaiser Permanente health insurance plans typically offer a range of benefits, including preventative care, medical treatment, prescription drug coverage, and other health services. Some plans may also include dental and vision care. The company occupied the first position in terms of total health plan enrollment in 2021, with 8,228,765 accounts.
8. AXA SA (CS.PA)
TTM Total Revenue: $103.7 billion (€97.25 billion)
AXA SA (CS.PA) is a Paris, France-based insurance company that was founded in 1946. The company has a presence in 50 countries and a headcount of 149,000 employees and distributors. AXA SA (CS.PA) provides insurance and financial management services to 95 million clients around the world.
AXA health insurance plans vary by region and country, but they generally offer a range of benefits, such as hospitalization, outpatient services, preventative care, and prescription drug coverage. The company also offers additional benefits, such as dental and vision care, alternative medicine, and wellness programs. Some plans may also provide coverage for pre-existing conditions, depending on the specific policy. CEO Thomas Buberl shared that in 2023, AXA SA (CS.PA) aims to achieve continuous growth in earnings, propelled by all regions, and a transparent route to increasing dividends. This will be backed by improved cash flow and prudent capital management. AXA SA (CS.PA) stock offers an attractive dividend yield of 5.78% as of March 13.
6. China Life Insurance Company Limited (601628.SS)
TTM Total Revenue: $115.98 billion (¥804.12 billion)
China Life Insurance Company Limited (601628.SS) is a Beijing, China-based provider of health insurance and other annuities products founded in 2003.
The company has a headcount of 103,262 employees and ranks at the 71st position in the Forbes Global 2000 list for 2022. The Forbes Global 2000 list ranks the biggest companies globally based on revenue, earnings, total assets, and market capitalization. China Life Insurance Company Limited (601628.SS) claims that once a consumer enrolls in the voluntary health insurance services successfully, the company will continue to renew the plan till 100 years of age without taking into consideration the underlying health condition of the insured person or the historical claim record. The company also provides annual coverage of $10,191 (HKD 80,000) for prescribed diagnostic imaging tests, psychiatric treatments, and prescribed non-surgical cancer treatments.
In addition to China Life Insurance Company Limited (601628.SS), companies such as Centene Corporation, UnitedHealth Group Incorporated, and Elevance Health, Inc. are also some of the biggest health insurance companies in the world.
5. Allianz SE (ALV.DE)
TTM Total Revenue: $127.61 billion (€119.71 billion)
Allianz SE (ALV.DE) is a Munich, Germany-based financial services company with a significant presence in the health insurance segment. The company employs 159,000 people from around the world and provides its services to 122 million customers spread across 70 countries.
The company is a market leader in the insurance sector in Germany. Allianz SE (ALV.DE), which oversees approximately 683 billion euros of investments for its insurance clients, is among the largest investors in the world. In addition, its asset managers, PIMCO and Allianz Global Investors manage around 1.6 trillion euros of assets on behalf of external clients as of 2022. The company claims to have a network of 1 million medical providers and provides a diverse range of health insurance products like international health insurance, short-term and emergency healthcare insurance, critical illness insurance, and life and disability insurance.
4. Centene Corporation (NYSE:CNC)
TTM Total Revenue: $144.55 billion
Centene Corporation is a St. Louis, Missouri-based healthcare company that is a leading provider of health insurance.
Based on the 2021 total health plan enrollment data compiled by Forbes, the company ranks at the fifth position with a total enrollment of 3,962,897 and a market share of 6.17%. Centene Corporation is the biggest Medicare-managed care organization in the US. The company specializes in providing healthcare coverage to individuals and families who are eligible for Medicaid, as well as those who are eligible for Affordable Care Act (ACA) plans. In addition, Centene Corporation also offers health insurance plans for individuals eligible for Medicare. You can read the company Q4 2022 earnings call transcript here.
3. Ping An Insurance (Group) Company of China, Ltd. (2318.HK)
TTM Total Revenue: $147.37 billion (¥1.02 trillion)
Ping An Insurance (Group) Company of China, Ltd. (2318.HK) is a Shenzhen, China-based diversified financial conglomerate founded in 1988 with interests in asset management, banking, financial services, and insurance. The company is also a provider of healthcare services.
Ping An Insurance (Group) Company of China, Ltd. (2318.HK) claims that its services are used by 225 million retail customers and 668 million internet users, which makes it one of the biggest financial services companies in the world. The company has developed a Health Maintenance Organization (HMO) system that brings together all the stakeholders related to health insurance under a single platform. The company serves the healthcare segment through Ping An Good Doctor (also known as Ping An Health) and Ping An Smart Healthcare.
2. Elevance Health, Inc. (NYSE:ELV)
TTM Total Revenue: $156.60 billion
Elevance Health, Inc., formerly known as Anthem, Inc., is an Indianapolis, Indiana-based provider of health insurance.
The company occupies the second position on the Forbes total health plan enrollment list for 2021, with a total of 4,670,236 plans sold under the Anthem and Wellpoint brand. The company provides its insurance services through a network of 100,000 associates. On February 23, an analyst at JPMorgan increased the target price for Elevance Health, Inc. from $555 to $572 and reiterated an Overweight rating on the stock. The analyst thinks that the companies in the managed healthcare group are in a strong position to sustain operational efficiency post-Q4 2022.
Here’s what Baron Funds said about Elevance Health, Inc. in its Q4 2022 investor letter:
“Performance in managed health care was bolstered by Elevance Health Inc. (NYSE:ELV), which operates as a health benefits company. Elevance’s shares rose in response to strong quarterly results and raised guidance driven by solid medical cost management, pharmacy benefit manager strength, and healthy enrollment growth.”
1. UnitedHealth Group Incorporated (NYSE:UNH)
TTM Total Revenue: $322.13 billion
UnitedHealth Group Incorporated is a Minnetonka, Minnesota-based health insurance company founded in 1977. The company has a headcount of 125,000 employees and has partnered with 1.3 million doctors and 6,500 healthcare facilities.
UnitedHealth Group Incorporated is the fifth biggest holding in Daniel Loeb’s Third Point LLC’s portfolio as of Q4 2022. Meanwhile, the stock was the second biggest new buy in the portfolio of Chase Coleman’s Tiger Global during the same period. Meanwhile, Steve Mandel’s Lone Pine Capital also increased its holding in the stock during Q4 2022. All these positive developments by leading hedge fund managers reflect the strong outlook for the company.
Here’s what Stewart Asset Management said about UnitedHealth Group Incorporated in its Q3 2022 investor letter:
“Looking at the Great Recession which began at year-end 2007 and lasted to mid-year 2009 is helpful too. Our four largest current holdings in the portfolio weathered that period well. UnitedHealth’s (NYSE:UNH) earnings were resilient. While it reported modestly down earnings in 2008, its earnings rebounded quickly to record highs in 2010 and the shares responded strongly in anticipation of this.”
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