Insurance Premium Hikes To Be Spread Out Over At Least 3 Years

---

 
Bank Negara said periodic adjustments to insurance premiums are necessary to ensure that policyholders’ claims can continue to be met.PETALING JAYA: Bank Negara Malaysia has announced several interim measures to mitigate the impact of the expected increase of between 40% and 70% in health insurance premiums

In a statement, the central bank said insurance and takaful operators will be required to spread out the increase in premiums over a minimum of three years.
“This measure will remain in place until the end of 2026. With this, at least 80% of policyholders are expected to experience yearly premium adjustments due to medical claims inflation of less than 10%.
“For policyholders 60 and above who are covered under the minimum plan within the medical and health insurance/takaful product they purchased, operators will temporarily pause premium adjustments due to medical claims inflation for one year from their policy anniversary.”
BNM said these measures do not apply to premium increases when a policyholder moves to a higher age band.
It said policyholders whose health insurance policies lapsed this year due to the price hikes may reach out to their operators to ask for the policy to be reinstated based on the adjusted premium.
“All operators will provide appropriate alternative products at the same or lower premiums for policyholders who do not wish to continue their existing plans that have been repriced.
“Operators that do not currently offer appropriate alternative products must make these available to policyholders by the end of 2025.
“Switching to the alternative products will not require any additional underwriting or involve any switching cost.”
The central bank said Malaysia’s medical inflation reached 15% this year and this was significantly higher than the global and Asia-Pacific average of 10%.
BNM said this was driven by medical technology advancements and the rising prevalence of non-communicable diseases among Malaysians, triggering a greater demand for healthcare services.
This has led to claims paid out by insurers rising faster than premiums collected, it added.
“While insurers maintain reserves to cover unexpected increases in medical claims paid, this cannot be sustained if the cost of claims continues to increase beyond reasonable estimates.
“Hence, periodic adjustments to medical and takfaul health insurance premiums are necessary to ensure that policyholders’ claims can continue to be met.”
The central bank said the measures announced today were aimed at alleviating the immediate financial impact of premium hikes on policyholders while preserving their coverage.
“However, broader measures to address the rising medical cost in Malaysia are urgently needed to manage future premium adjustments and ensure medical health and insurance/takaful products continue to be affordable for the Malaysian public.” - FMT

---