2022 HMO Industry Report

Overview of the Report

The global and domestic economies improved moderately in 2021, a year that many dubbed the “year of the vaccine”. The economic improvements witnessed in 2021 were due largely to the increased vaccination rates in the world’s most developed nations and the gradual resumption of business activities. Nigeria’s healthcare sector also witnessed a general uptick in activities driven by the return to full operational capacity by healthcare services providers, the growing reliance on technology and increased public and private sector partnership arrangements resulting in investments in healthcare infrastructure. The increased focus on Nigeria’s healthcare sector also weighed positively on the Health Maintenance Organisation (HMO) Industry, with the swift passage of the National Health Insurance Authority (NHIA) Act 2022. Despite the general economic upswing in 2021, HMO operators had major hurdles, including a high cost environment, a weakening domestic currency, and rising insecurity. The Industry has also been adversely impacted by the brain drain in the medical profession, which continues to weaken the quality of services of healthcare providers.

Notwithstanding, Agusto & Co. expects the demand for the HMO industry’s services to remain positive in the near term supported by the rising interest in health insurance and stronger regulatory support. We also expect the National Health Insurance Authority Act 2022 to stimulate investments and support growth across the healthcare value chain in the medium term. We believe the performance of HMOs will be hinged on product diversity and affordability, cost discipline, convenience to consumers and adaptability of operators to the dynamic business environment. In addition, the accelerated adoption of digitalisation amongst Industry operators will also support our growth expectations. Despite our optimism for the HMO industry, the elevated cost profiles of the Industry due to rising inflation and the persistent naira depreciation will continue to constrain the profitability of HMOs in the near to medium term. We believe many small-sized operators will struggle to absorb the rising costs; thus, we expect to see more price list adjustments in the near term.

This report provides useful insights on various aspects of the HMO industry. Key benefits of the report include:

  • Gaining a full understanding of the post-pandemic performance of the HMO industry, globally and in Nigeria
  • A comprehensive analysis of the HMO industry’s competitive environment including a SWOT analysis
  • An overview of the regulatory landscape for the HMO industry in Nigeria and the implications of the National Health Insurance Authority (NHIA) Act 2022 on the Industry
  • Insights on recent developments and Industry trends in the HMO Industry
  • Focus group discussions on HMO services, challenges and consumer expectations
  • The outlook and risk rating for the HMO industry in Nigeria