PETALING JAYA: The rising cost of private healthcare is emerging as a serious concern for the sustainability of health insurance and takaful premiums, warned Takaful Malaysia Group CEO Nor Azman Zainal.
He said treatment charges have consistently outpaced general inflation, driven by higher medical costs, increased utilisation of healthcare services and the adoption of advanced medical technologies.
“Medical inflation is a key concern for the sustainability of health protection offerings in Malaysia.
“In 2025, we continue to see double-digit growth in medical claims, reflecting higher treatment charges and service utilisation.”
For the takaful sector, the implications are particularly direct.
Contributions from customers are pooled to pay for medical claims and rising treatment costs put pressure on the fund, making long-term sustainability a challenge.
He emphasised that prudent cost management and responsible stewardship are crucial to safeguard customers’ interests.
Nor Azman said sustainability requires greater collaboration across the entire healthcare ecosystem, including insurance and takaful operators, healthcare providers, regulators and consumers.
Collective efforts to promote cost transparency, fair pricing, ethical charging practices and preventive healthcare initiatives would be essential in managing medical inflation and protecting the affordability of coverage.
On immediate measures to prevent premiums from becoming unaffordable, he pointed to addressing medical cost inflation as the top priority.
“Strengthening claims data sharing, promoting evidence-based treatment guidelines and adopting outcome-based pricing models with healthcare providers could help reduce unnecessary outflows and make protection more efficient.”
Bank Negara Malaysia, together with industry stakeholders, is developing an affordable basic medical and health insurance and takaful product.
He said this initiative aims to expand affordable protection, make healthcare coverage more accessible to middle and lower-income households, curb rising medical costs, stabilise premiums and contributions.
“Preventive healthcare is another critical focus area. A significant portion of claims arises from lifestyle-related illnesses, such as cardiovascular diseases.”
He said by incentivising preventive care, early screening and wellness programmes through tax benefits or co-funded initiatives, the sector could reduce long-term claims burdens and help stabilise costs for consumers.
Nor Azman underscored the role of innovation and digitalisation in the insurance and takaful sector.
He urged the public to be proactive about their health while understanding the coverage and benefits available under their plans.
“The rising cost of treatment is a pressing issue affecting consumers and the broader insurance and takaful ecosystem.
He said this requires close collaboration with healthcare providers, regulators and industry stakeholders to promote transparency, cost efficiency and responsible pricing within the healthcare system.
“Affordability cannot be addressed by a single party. It requires an ecosystem approach involving policymakers, regulators, healthcare providers, industry players and consumers.
“By working together, we could maintain sustainable contribution levels and ensure quality healthcare remains accessible and financially sustainable for Malaysians in the years to come.”
