Clarification on "No Immediate Change" to MHIT Premium hikes reported by Business Times

KUALA LUMPUR, 3 December 2024 - We wish to bring your attention to the above article published in the Business Times today and the first paragraph of the article which states, “no immediate changes to the recently reported medical premium hikes.”

The Life Insurance Association of Malaysia (LIAM) did not state that there is “no immediate change” to premium rate adjustments of 40-70%. LIAM is still in discussions with Bank Negara Malaysia (BNM) about measures to ease the burden on policyholders resulting from the unprecedented rise in claims over the past several years.

Over the period of 2021 to 2023, unprecedented cumulative medical claims costs inflation of 56% placed many insurers in a critical position on their medical books of business, having to manage high ratio of claims over premiums.  The rising cost of care at private hospitals as well as the sharp increase in number of policyholders seeking treatment have driven up claims and premiums.

Insurers have an obligation to keep their respective medical insurance funds solvent.

Insurers have agreed to manage future significant rate revisions to ease the burden on policyholders resulting from higher claims. 

To support policyholders during this period, insurers are proactively engaging with their customers to manage repricing impacts. They are also offering a range of options to ensure policy continuity and affordability.

The life insurance industry has been actively collaborating with BNM, the Ministry of Health (MOH), and the Association of Private Hospitals Malaysia (APHM) to develop long-term strategies to mitigate the financial impact of rising healthcare costs and medical claims.