Europe's medical inflation sees modest growth in 2026

Infographic description: Europe's medical inflation sees modest growth in 2026

Gross medical trend rates 

Gross medical trend in 2026 (projected)

Regional average (8.2%)

58% of European insurers predict medical trend growth over the next three years will be higher than in the past three years.

What is driving costs?

•  New medical technologies: 82%
•  Decline of public health systems: 76%
• Advancements in pharmaceuticals: 38%
•  Employee demographics: 28%
• Fraud, waste and abuse: 27%

Decline in Public Healthcare systems in Europe continues to be a compression factor. Drivers of this decline include a severe health workforce crisis, aging populations and historical underinvestment and budget constraints.

Tariffs and trade policies are expected to impact healthcare costs

• Decrease: 1%
• No impact: 20%
• Increase: 60%
• Significant increase: 19%

Note: "Not sure" responses excluded

Pharmaceuticals, biotech and medical technology supply chains are being affected by new tariffs and trade policies. This may reduce access to affordable care and put additional pressure on occupational health benefits.

Deductibles and out-of-pocket limits are the most common cost sharing approach in Europe

Deductibles and out-of-pocket limits are used to control premiums and reduce claims in Europe. However economic pressures and regulatory changes are pushing employers to adjust these plans and explore more flexible or targeted options.

Cancer is the fastest growing condition causing the highest cost of claims

• Cancer
• Behavioural
• Cardiovascular
• Musculoskeletal
• Diabetes
• Gastrointestinal

Breast, colorectal and lung cancer have shown the most growth in incidence over the past 18 months

• 66% have reported an increase in the incidence of cancer in those under 40 over the past year
• 83% have seen a rise in breast cancer in Europe and globally, the fastest rising in all regions
• Prevention and screening are the two most effective factors for early detection and to reduce medical costs
• Care navigation and case management are also reported as an effective way to reduce costs in many markets, but the current take-up in Europe is low (30%)

Use of GLP-1s is expected to increase across the region

GLP-1 receptor agonists, originally approved as a medication for diabetes, are now being used more widely in the United States to treat obesity.

• 77% Europe, especially where use is currently low
• 67% with coverage varying across markets
• 64% of insurers believe GLP-1s will increase medical costs

Insurers expect GLP-1 costs to rise due to high prices, increasing uptake, and potential long-term use. Although early research suggests possible health and cost benefits over time, evidence on overall cost impact is still evolving.

Use of AI in healthcare programs is expected to more than double in Europe

Number of insurers taking significant actions to incorporate AI capabilities into healthcare programs and activities

Note: Percentages indicate "to a very great extent" or "to a large extent"

Current use of AI in Europe is focused on plan administration and operations, and communication

AI is expected to reduce future healthcare cost trends in Europe

Next steps for employers

• Spotlight cancer awareness and prevention: Provide screenings and preventive services to employees and drive educational campaigns
• Consider employee cost share: Introduce co-pay or co-insurance design to incentivise more thoughtful medical spending and discourage excessive claiming
• Invest in education and prevention: Empower employees to use healthcare benefits wisely, offer targeted guidance, and emphasise the importance of preventive care
• Prioritise mental health: Review and modernise mental health programs, both insured and non-insured, to ensure future‑ready coverage, expanded digital support and optimised employee services
• Introduce flexibility where possible: Enable employees to utilise the benefits they need

Global, Latin America, Europe and Middle East and Africa numbers exclude Argentina, Turkey, Egypt, Nigeria and Zimbabwe as outliers due to inflationary pressures.

Sources: 2026 Global Medical Trends Survey Copyright © 2026 WTW. All rights reserved.

Employers should act now to reassess funding strategies, plan design and preventive health investments in light of sustained medical trend growth. We work with organisation across Europe to develop data-driven, sustainable health benefit strategies tailored to local market dynamics.

Contact

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Orlagh Farrington

Head of Health & Benefits Ireland

email Email phone +353 86 8218524

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