Private medical insurance costs in the Middle East are expected to climb by 12 percent in 2025, marking one of the largest increases worldwide and exceeding the global average by 1.6 percentage points, according to a new survey.
This surge in private medical inflation in the region is linked to an increased overall utilization of healthcare services and a rise in claims for costly medical procedures, as employees increasingly seek out top-tier medical care.
For the third year in a row, global medical expenses are anticipated to rise by double-digit percentages, with minimal relief on the horizon, particularly in the Middle East, which is experiencing some of the highest regional increases. This finding comes from a survey of health insurers carried out by WTW, a prominent global advisory, broking, and solutions firm.
Respondents to the survey pointed to heightened use of health services, escalating pharmacy costs, and the advent of new medical technologies as the key factors driving the rise in overall medical expenditures. In the Middle East, the WTW Global Medical Trends Survey indicates that
Global trends in medical costs
On a global scale, the research reveals that insurers forecast a 10.4 percent increase in medical costs for 2025, maintaining the same rate as this year. The projected rise in medical expenses varies by region. In North America, costs are set to increase from 8.1 percent in 2024 to 8.7 percent in 2025. Additionally, costs are expected to accelerate in Asia, the Middle East, and Africa, while Europe and Latin America will experience slower growth.
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Long-term projections and demand
Although the trend may be slightly easing in certain areas, it is expected to remain elevated over the long term. Indeed, over the next three years, 64 percent of insurers predict higher or significantly higher medical trends worldwide. The demand for medical services is also not anticipated to wane anytime soon, with two-thirds (67 percent) of insurers expecting increased global demand for healthcare services over the next three years.
Challenges for employers
“With medical cost increases remaining at double-digit levels, employers will need to brace themselves for further substantial cost increases in the year ahead,” stated Steve Clements, senior director, Integrated & Global Solutions at WTW. “The seemingly endless rise in costs presents a continuous challenge for employers, who find these increases unsustainable for their organizations.”
What are the factors driving high medical costs?
Several major factors are contributing to the persistent high medical costs. The introduction of new medical technologies and pharmaceuticals has significantly impacted the global cost of care. Moreover, there has been a notable rise in healthcare utilization in recent years, particularly in mental health services, which continues to contribute to the overall expenses. In regions where public healthcare systems primarily deliver services, many have been overwhelmed by high demand and limited resources, prompting members to rely more heavily on private medical providers.
Strategic initiatives for employers
“While recognizing that some factors influencing costs may be beyond their control, employers can focus on key initiatives to manage expenses while enhancing the value of their health benefits. These initiatives include, but are not limited to, promoting preventive care, assessing vendor solutions such as telehealth, and continuing to expand wellbeing offerings,” advised Steve Clements.
WTW conducted its 2025 Global Medical Trends Survey from June to August 2024, involving 348 leading health insurers from 75 countries. Alongside submissions from insurers, input was gathered from WTW local brokers representing 55 countries, resulting in a comprehensive dataset covering 90 countries.
