Managing Medical Claims Inflation

 The rise in demand for medical and health insurance and takaful (MHI) in Malaysia is indeed a significant trend. This demand has been driven by the growing availability of private healthcare treatment as an alternative to public hospitals1. In 2019, MHI accounted for 15.5% of total gross premiums in the life insurance and family takaful sector1.

However, the cost of medical care in Malaysia has been reported to be rising above the global average and is among the highest in Southeast Asia1. Between 2016 and 2019, MHI claims grew by 11.6% a year, outstripping the increase in premiums, which grew on average by 9.5% a year1. This trend has increased pressure on the underwriting performance of MHI providers1.

In that four-year period, 96 MHI products were repriced, affecting 4.5 million policies1. This is a concern as more expensive premiums make coverage increasingly unaffordable to many1.

To manage this situation, it’s important for MHI providers to carefully consider their pricing strategies and ensure they are providing value to their customers while also maintaining their financial sustainability. They may also need to explore innovative solutions, such as digital health technologies, to help manage costs and improve the efficiency of healthcare delivery.

For consumers, it’s crucial to understand the terms and conditions of their MHI policies, including any exclusions or limitations imposed on benefits, before confirming their purchase2. Consumers are also advised to provide complete information to their insurer as requested in the proposal form when purchasing an MHI policy2. This can help ensure that they receive the coverage they need and avoid any potential issues with claims in the future.

It’s a complex issue, but with careful management and open communication between MHI providers and consumers, it’s possible to navigate these challenges and ensure that people have access to the healthcare coverage they need.

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