Malaysia's Insurance, Takaful Industry Sees 56 Pct medical Claims Cost Inflation From 2021-2023 - Associations
KUALA LUMPUR, Nov 28 (Bernama) -- Malaysia’s insurance and takaful industry saw unprecedented cumulative medical claims cost inflation rate of 56 per cent from 2021 to 2023, according to several associations.
The Life Insurance Association of Malaysia (LIAM), the Malaysian Takaful Association (MTA) and Persatuan Insurans Am Malaysia (PIAM) said in a joint statement that the surge was driven by various factors such as the rising costs of medical treatments, advanced healthcare technologies and increased utilisation of healthcare services which have made premium repricing an unavoidable measure.
“Beyond inflation, the repricing quantum are also affected by factors such as individual risk rating, risk pooling, product benefits and features as well as expected claims payout.
“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, with the accumulated impact of claims inflation resulting in upward premium adjustments,” it said.
Meanwhile, the associations said the industry welcomed the recent announcement by the Association of Private Hospitals Malaysia (APHM) on establishing a cost containment unit to manage healthcare costs, ensuring healthcare services remain affordable while maintaining high standards of care.
They said the industry is also supportive of the Health Minister’s call for a value-based healthcare delivery system by focusing on delivering better health outcomes at sustainable costs to help balance affordability and quality in the long term.
“The introduction of co-payment options in September this year offers a long term solution to assist policyholders to manage their policy, which aimed to reduce premiums by sharing medical costs with policyholders, encouraging more mindful healthcare usage in the long term,” they said.
In addition, the associations mentioned that the industry continued to engage with Bank Negara Malaysia (BNM) to manage healthcare costs, while insurers and takaful operators, understanding the challenges faced by policyholders, are committed to providing comprehensive support.
The industry is committed to stagger repricing adjustments to manage impact to customers; establish a dedicated hotline for each company and relief programme to ensure ease of access to policyholders and offered flexible premium/contribution payment plans to affected policyholders.
“It is also committed to offer options for different protection plans at comparatively lower or the same premium/contribution; and implement effective redress mechanisms, including dedicated communication channels for affected customers,” they said.
-- BERNAMA
