Singapore's health insurance sector is expected to expand fourfold by 2020 to reach a total value of US$6.8 billion (S$8.7 billion), according to a new study by Roland Berger Strategy Consultants.
The report is also projecting that an average person's annual spending on healthcare needs here will grow by more than 80 per cent over the same period to US$3,232 in 2020.
Released on Wednesday, the study found that the overall health insurance industry in Southeast Asia, including Singapore, will grow at a compounded annual growth rate of 15 per cent to US$24 billion by 2020, from US$6 billion in 2010.
Roland Berger's head of financial services in Southeast Asia, Mr Philippe Chassat, said healthcare spending in the region will rise because of higher disposable incomes.
There are also more wealthier consumers in the region, who are increasingly more concerned about personal health.
In Southeast Asia, Mr Chassat said there are some 17 million households dubbed by Roland Berger as the "mass affluent". Those belonging to the group are more willing to spend on consumption goods and services.
For Singapore, Mr Chassat said the recent government announcement to increase public funding for healthcare is a positive event for health insurers.
"Increases in public funding aren't likely to compete with private health insurance; on the contrary, I believe it will raise awareness for supplementary health insurance and it may remove higher risks for insurers," he added.
Earlier this month, during the National Day Rally, Prime Minister Lee Hsien Loong announced changes to the national health insurance scheme MediShield, which will cover large hospitalisation fees for all. Previously, MediShield was restricted to those aged 90 and below.