PETALING JAYA: Malaysians facing steep increases in medical insurance premiums next year can expect some relief, as insurance companies have agreed to “stagger” premium hikes and introduce flexible payment plans.
According to New Straits Times, the move comes after Bank Negara Malaysia (BNM) directed insurers to review their repricing strategies to address premium increases, which are projected to rise by 40% to 70%.
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Insurers will also offer alternative plans at lower or unchanged premiums to accommodate policyholders.
In a statement on Thursday, Bank Negara echoed the insurance industry’s terminology, referring to the rise in health insurance premiums as “repricing.”
The Life Insurance Association of Malaysia (LIAM), Malaysian Takaful Association (MTA), and Persatuan Insurans Am Malaysia (PIAM) attributed a staggering 56% cumulative increase in medical claims costs between 2021 and 2023 to ”unprecedented” factors.
“This surge, driven by various factors such as the rising costs of medical treatments, advanced healthcare technologies, and increased utilization of healthcare services, has made premium repricing an unavoidable measure,” the joint statement said.
“Beyond inflation, 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 clarified that premiums are typically reviewed every three years to maintain the sustainability of medical insurance plans.
“The accumulated impact of claims inflation has resulted in upward premium adjustments,” it said.
“Further details on the measures will be announced soon.
“We remain concerned that some policyholders will struggle to maintain their coverage, particularly senior citizens, and continue to work with stakeholders, like Association of Private Hospitals Malaysia (APHM) and Ministry of Health to find solutions to bring claims inflation under control,” the statement said.
The industry has also welcomed APHM’s establishment of a cost containment unit and is optimistic about the introduction of co-payment options in September, which they believe will offer long-term relief for policyholders.
