Federation of Malaysian Consumers Associations (Fomca) says this is still too soon, as many are still grappling with financial constraints and uncertainty. It recommend the price increase should take effect in 2023.
The call to delay the price hike has been backed by the National Association of Malaysian Life Insurance and Family Takaful Advisors (Namlifa). Both Fomca and Namlifa have also previously called on Bank Negara Malaysia to intervene and protect consumers.
The amount of price increase is dependent on the various insurers and takaful operators (ITOs) and policyholders, ranging from 5% to 40% per policyholder. It’s not set as a standard across the board. It is anticipated that older policyholders suffer higher increases compared to the younger ones.
Bank Negara tells Sunday Star it has been engaging key stakeholders to manage the medical insurance repricing. BN recognises the challenges faced by many Malaysians arising from the pandemic. But it points out that insurance industry players have introduced steps to preserve protection coverage for policyholders with financial difficulties.
This includes temporary premium or contribution deferment, interest-free installment payments, or the ability to switch to an alternative plan with no additional underwriting requirements. These flexibilities have provided financial relief to almost 60,000 affected policyholders and takaful participants, who opted to defer their premium payments by three months, totaling more than RM74mil collectively.
The bank urges policyholders or takaful participants to contact their respective ITOs or agents to find out about the options available that best meet their needs. It’s important to note that for medical and health insurance and takaful (MHIT) products, premiums and contribution adjustments are highly impacted by medical cost inflation.
BN highlights that MHIT claims grew at a faster rate of 11.6% a year compared to the MHIT premium of 9.5% yearly between 2016 and 2019, based on its 2019 annual report. This trend, coupled with the rising cost of private medical care in Malaysia, which is reported to be among the highest in South-East Asia and above global average, continually puts pressure on the pricing of MHIT products. It also puts stress on the long-term affordability of private healthcare services in Malaysia.
The call to delay the price hike has been backed by the National Association of Malaysian Life Insurance and Family Takaful Advisors (Namlifa). Both Fomca and Namlifa have also previously called on Bank Negara Malaysia to intervene and protect consumers.
The amount of price increase is dependent on the various insurers and takaful operators (ITOs) and policyholders, ranging from 5% to 40% per policyholder. It’s not set as a standard across the board. It is anticipated that older policyholders suffer higher increases compared to the younger ones.
Bank Negara tells Sunday Star it has been engaging key stakeholders to manage the medical insurance repricing. BN recognises the challenges faced by many Malaysians arising from the pandemic. But it points out that insurance industry players have introduced steps to preserve protection coverage for policyholders with financial difficulties.
This includes temporary premium or contribution deferment, interest-free installment payments, or the ability to switch to an alternative plan with no additional underwriting requirements. These flexibilities have provided financial relief to almost 60,000 affected policyholders and takaful participants, who opted to defer their premium payments by three months, totaling more than RM74mil collectively.
The bank urges policyholders or takaful participants to contact their respective ITOs or agents to find out about the options available that best meet their needs. It’s important to note that for medical and health insurance and takaful (MHIT) products, premiums and contribution adjustments are highly impacted by medical cost inflation.
BN highlights that MHIT claims grew at a faster rate of 11.6% a year compared to the MHIT premium of 9.5% yearly between 2016 and 2019, based on its 2019 annual report. This trend, coupled with the rising cost of private medical care in Malaysia, which is reported to be among the highest in South-East Asia and above global average, continually puts pressure on the pricing of MHIT products. It also puts stress on the long-term affordability of private healthcare services in Malaysia.
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