KUALA LUMPUR: Insurers have committed to staggering repricing adjustments, and offering flexible premium payment plans for medical insurance premiums following a directive by Bank Negara Malaysia (BNM) to review its repricing strategy.
The Life Insurance Association of Malaysia (LIAM), the Malaysian Takaful Association (MTA) and Persatuan Insurans Am Malaysia (PIAM) in a joint statement on Thursday said they will also establish a dedicated hotline for each company and relief programmes to ensure ease of access to policyholders.
This includes offering flexible premium/contribution payment plans to affected policyholders and offering options for different protection plans at comparatively lower or the same premium/contribution.
They added that they are committed to implement effective redress mechanisms, including dedicated communication channels for affected customers.
"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 (MOH) to find solutions to bring claims inflation under control, it added.
The associations said over the period of 2021 to 2023, the insurance and takaful industry has experienced an unprecedented cumulative medical claims cost inflation rate of 56 per cent.
"This surge, driven by various factors such as the rising costs of medical treatments, advanced healthcare technologies, and increased utilisation of healthcare services, has made premium repricing an unavoidable measure."
"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," it said.
They explained that 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.
"The accumulated impact of claims inflation has resulted in upward premium adjustments," the statement said.
The industry welcomes Association of Private Hospitals Malaysia (APHM) establishment of a cost containment unit to manage healthcare costs and believes that introduction of co-payment options in September this year offers a long term solution to assist policyholders to manage their policy.