Americans Set to Spend Seven Times More on Insurance than Europeans

Americans are projected to spend an average of $15,000 annually on insurance by 2028, a figure that dwarfs spending in other parts of the world. According to a recent analysis by AltIndex.com, this spending is expected to be seven times higher than that of Europeans and an astonishing 30 times more than what Asians will spend on average.

While major insurance markets exist in countries like China, Japan, the United Kingdom, and Germany, the United States remains the global leader in insurance expenditure. The American insurance market is not only the largest by total premiums, but it also generates approximately half of the world’s insurance premiums. However, the disparity in per capita insurance spending between Americans and residents of other nations is striking and is predicted to widen further in the coming years.

A Steady Rise in US Insurance Spending

The United States’ insurance market has long been characterised by high levels of expenditure, driven by several key factors. Foremost among these is the country’s healthcare system, which is predominantly private and heavily reliant on insurance. Unlike many European and Asian nations with public healthcare systems, Americans often need comprehensive health insurance to cover medical expenses, resulting in significantly higher per capita spending. Additionally, the wealth and consumer habits of Americans, alongside the complex risk landscape in the country, have led to the widespread purchase of various insurance products, from home and auto insurance to life and liability coverage.

Recent data from Statista highlights that the average insurance spending per capita in the United States has surged by 26% since 2017. Back then, the average American spent approximately $10,600 on insurance annually. By 2023, this figure had climbed to nearly $13,600, and it is expected to reach close to $15,000 by 2028—a further increase of 8%.

Global Comparisons: Europe and Asia Lag Behind

When comparing insurance spending across different regions, the United States stands out dramatically. By 2028, the average American’s insurance expenditure will be seven times higher than that of a European. The UK and Germany, two of Europe’s largest insurance markets, will see their residents spending roughly $4,000 annually on insurance – only a third of what Americans will spend.

In Asia, the gap is even more pronounced. China, despite being the world’s second-largest insurance market by total premiums, will see its citizens spend an average of just $810 annually on insurance by 2028. Japan, with higher insurance spending than China, will still only reach $2,600 per capita by 2028, which is 18 times less than in the US.

The US Dominance in Global Insurance Markets

As Americans continue to seek out new insurance products and the per capita spending grows, the United States is set to solidify its dominant position in the global insurance market. In 2017, the US accounted for $3.52 trillion in global insurance premiums, representing 46% of the market. By 2023, this had increased to $4.64 trillion, or 50% of the global total.

Projections indicate that by 2028, the US insurance market will surpass $5.1 trillion, capturing nearly 52% of the world’s total insurance premiums. This growth underlines the US’s continued leadership in the industry, with the country’s insurance spending expected to remain far ahead of other regions for the foreseeable future.