29th November 2024 - 2 min read
Insurers and takaful operators have pledged to implement staggered repricing adjustments and introduce flexible premium payment plans for medical insurance premiums, following Bank Negara Malaysia’s (BNM) directive to review their repricing strategies.
This commitment was announced today in a joint statement by the Life Insurance Association of Malaysia (LIAM), the Malaysian Takaful Association (MTA), and Persatuan Insurans Am Malaysia (PIAM). The associations outlined additional measures to support policyholders, including the establishment of dedicated hotlines for each company and relief programmes to facilitate access to assistance. These initiatives include offering flexible premium or contribution payment plans, as well as alternative protection plans at similar or lower premium or contribution rates.
The associations also committed to implementing effective redress mechanisms, including dedicated communication channels to assist affected customers. More details on these measures are expected to be announced soon.
Acknowledging concerns that some policyholders, particularly senior citizens, may struggle to maintain their coverage, the associations added that the industry is actively collaborating with stakeholders, including the Association of Private Hospitals Malaysia (APHM) and the Ministry of Health (MOH), to develop solutions to manage escalating claims costs.
They also revealed that between 2021 and 2023, the insurance and takaful industry experienced an unprecedented cumulative medical claims cost inflation of 56%. This surge, driven by rising medical treatment costs, advanced healthcare technologies, and increased utilisation of healthcare services, has made premium repricing unavoidable. Beyond inflation, the repricing quantum is also influenced by factors such as individual risk ratings, risk pooling, product benefits and features, as well as expected claims payouts.
BNM’s directive follows growing public concern over the affordability of Medical and Health Insurance and Takaful (MHIT) products. The central bank has instructed insurers and takaful operators to adopt more reasonable repricing strategies, including phased premium increases that take affordability into account.
(Source: NST)
Samuel writes about personal finance and financial news, focusing on how banking updates, policies, and promotions affect everyday money decisions. He enjoys making complicated financial topics easier to follow. Outside of writing, he spends his time watching TV shows and occasionally convincing himself he will only watch one episode.
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