The associations say the number of claims has spiralled as more people seek medical treatment, whose cost has risen as a result. (Bernama pic)
PETALING JAYA: Insurers and takaful operators say increased medical insurance premiums are “unavoidable” in light of rising claims and medical inflation.
The Life Insurance Association of Malaysia (LIAM), Persatuan Insurans Am Malaysia (PIAM) and the Malaysian Takaful Association (MTA) said the insurance and takaful industry experienced an “unprecedented” cumulative 56% rise in claims from 2021 to 2023.
They said increased medical insurance premiums are also driven by factors such as the rising costs of medical treatment, advanced healthcare technologies, and increased utilisation of healthcare services, with a growing number of policyholders seeking medical care, including post-pandemic treatments and elective surgeries.
In a joint statement, they also cited higher operational costs in private healthcare and the high prevalence of non-communicable diseases (NCDs) like diabetes, which raises the demand for long-term care.
The associations said the country’s aging population has also seen increased demand for medical care due to more people falling sick.
They said although insurers and takaful operators have different repricing cycles, they typically review and adjust premiums every three years to ensure the sustainability of medical insurance plans.
“The accumulated impact of claims inflation has resulted in upward premium adjustments,” they said.
“The repricing quantum is also affected by factors such as individual risk rating, risk pooling, product benefits and features, as well as expected claims payout.”
The associations said the industry is committed to offering options for different protection plans at “comparatively lower or the same” premium or contribution payments in light of concerns about increased medical insurance premiums.
They said they are committed to offering flexible premiums or contribution payment plans to policyholders.
They also said they are also looking at staggering repricing adjustments to manage the impact of increased medical insurance premiums on customers, and establishing a dedicated hotline for each company to ensure ease of access to policyholders.
It was reported on Tuesday that medical insurance premiums are expected to rise by 40% to 70% next year, with some policyholders choosing to terminate their policies as they are unable to bear the escalating cost of the monthly fees.
Utusan Malaysia reported the impending increase based on notices sent by insurance providers to policyholders, citing the rising cost of healthcare at private hospitals.
Earlier today, Bank Negara Malaysia told insurers and takaful operators to review their repricing strategies for more “reasonable implementation”.
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