Managing Health Inflation - Singapore

Medical cost inflation in Singapore projected to hit a record high of 16.9 per cent in 2026, the Life Insurance Association Singapore (LIA) called for collective action to tackle issues such as overconsumption of healthcare services, and to contain rising treatment costs. This means collaboration is needed between insurers, healthcare professionals and providers, consumers and the authorities.

For a start, all seven Integrated Shield Plan (IP) insurers have to launch new riders by April 1 to meet the Ministry of Health new requirements. The new riders will require consumers to pay more out of pocket before insurance kicks in and play a bigger role in sharing the responsibility of tamping down rising costs. Based on responses from four IP insurers earlier, the new riders will be priced, on average, at least 30 per cent lower than existing riders. 

To address rising insurance premiums and private healthcare costs by instilling discipline in healthcare consumption, particularly for minor procedures, MOH has mandated that new IP riders sold from April 1 can no longer cover the minimum IP deductibles set by the ministry.

This means that those with the new riders have to pay at least $1,500 before insurance coverage kicks in. In addition, the co-payment cap will be doubled from the current $3,000 to $6,000, requiring policyholders to pay a larger portion of their bills.

Medical costs are expected to continue rising in 2026 globally, with the Asia-Pacific region reporting the highest increase at 14 per cent. Singapore is expected to overtake Indonesia to become the Asia-Pacific market with the highest medical inflation at 16.9 per cent.

Medical inflation in Singapore had been under 10 per cent until 2024, when it rose to 12.3 per cent, and further grew to 15.5 per cent in 2025. Factors leading to higher medical inflation here include an ageing population; adoption of costly new technologies, treatments and medication; and high operating expenses driven by increasing real estate prices and salaries due to a shortage of healthcare staff.

Besides collaborating with stakeholders and enhancing public education, especially in the areas of wealth and health protection, LIA will launch a series of financial literacy workshops for students at institutes of higher learning, in partnership with the Singapore College of Insurance.

Indonesia Life Insurance Update 2025

In 2025, Indonesia Life Insurance Industry registered a total industry revenue of $13.6b (Rp238.7t), a 9.3% increase year-on-year, driven by strong investment returns and an increase in total insured individuals.

The Indonesian Life Insurance Association (AAJI) data further showed that results from 57 life insurance companies saw their overall premium income experience a minor decline of 1.8%. This was a shift toward regular premium payments.

New business premiums paid on a regular basis grew by 7.8% YoY. Additionally, the total number of insured people rose by 8.6% YoY, bringing the total to 168.03 million individuals.

The industry paid out a total of $8.4b (Rp146.7t) in claims and benefits to approximately 9.59 million beneficiaries throughout the year.

Total claims actually fell by 7.8% YoY, a drop largely attributed to a 19% reduction in policy surrenders, indicating that more policyholders are maintaining their long-term coverage.

In contrast, health insurance claims rose by 9.1% YoY to $1.5b (Rp26.7t) across both individual and group plans. AAJI plans to focus heavily on health insurance management in 2026 under new regulatory guidelines to control these costs.

Total industry investments grew to $33.7b (Rp590.5t) in 2025, up from $30.9b (Rp541.6t) the year before.

The largest portion of this portfolio was allocated to government securities, which accounted for $14.2b (Rp248.3t), or roughly 42% of total investments.

The remaining funds were distributed across shares at $7.3b (Rp128.7t), mutual funds at $4.2b (Rp74.1t), corporate sukuk at $3.0b (Rp53.5t), and deposits at $1.8b (Rp32.0t).

Looking ahead, the association is preparing for the upcoming regulatory changes deadlines at the end of 2026.

These include stricter capital requirements and the mandatory spin-off of sharia business units.

The association is also rolling out new training and certification platforms to standardize marketing and agent qualifications across the sector.

Prudential Acquires Bharti Life

Prudential has agreed to acquire a 75% stake in Bharti Life Insurance Company, from ​Bharti Life Ventures and 360 ONE Asset Management as part of a strategic repositioning of its India operations.

Prudential said it will acquire a controlling stake in Bharti Life Insurance for ​initial cash consideration of 35 billion rupees ($364.74 million), ​payable on completion. An additional 7 billion rupees is ⁠potentially payable on the fulfillment of certain conditions.

Upon completion ​of the deal, Prudential said its Indian operations will consist of majority-owned Bharti Life Insurance and Prudential HCL Health Insurance, and minority shareholdings ​in two listed entities, namely 35% of ICICI Prudential ​Asset Management Company and 22% in ICICI Prudential Life Insurance Company.

Prudential is ‌required ⁠to reduce its shareholding in ICICIPru Life to under 10% to secure regulatory approval for the deal adding that it is engaging with regulatory authorities on ​this process.

The ​deal is a ⁠strategic move to secure majority ownership of a life insurance business in India, a ​highly attractive market for Prudential, and enables the ​insurer ⁠to work closely with Bharti Enterprises' other businesses and related entities. Bharti Life will also look into securing ⁠strategic ​distribution agreements with Bharti Airtel and ​360 ONE as part of the deal.

Reset - Malaysia Medical Insurance

The Malaysian insurance and takaful industry is expected to address any structural gaps during the pilot phase of the Malaysia Health Insurance and Takaful Initiative (MHIT), which is scheduled for rollout in the second half of 2026.

Under RESET, the base MHIT plan will begin in 2027. The insurance plan will have co-payment features, through which it will regulate the behavior of private hospitals: policyholders will pay lower co-payments when they seek treatment at healthcare facilities that charge moderate fees with fee transparency, while those charging ‘premium’ fees will result in higher co-payments.

Previously, in January 2026, BNM plans to strengthen regulatory requirements for all MHIT products following the introduction of a standardized base MHIT plan, aimed at improving consumer protection and ensuring long-term premium sustainability.

MHIT, which will be offered on a voluntary basis, is slated for pilot rollout in the second half of this year, while full implementation is targeted for early 2027.

Informal Workers Insurance Indonesia

Indonesia is cutting work accident and death insurance premiums in half for non-wage earners. The discount targets informal workers including traders, influencers, and ride-hailing drivers.

The transportation segment covers app-based drivers, non-app drivers, and couriers, with the discount running January 2026 to March 2027. Other informal worker categories receive the discount from April through December 2026.

The policy lowers contributions so more informal workers can be protected. Coverage benefits remain intact even though premiums are reduced. Benefits continue to include accident compensation, death benefits, and family scholarships. The scheme aims to sustain participation among informal workers under macroeconomic strain.

Eligible groups also include freelancers, fishermen, and farmers alongside traders and drivers. Influencers are explicitly named as recipients of the discount.

The government separately set a minimum Religious Holiday Bonus standard for digital platform workers. The benchmark equals 25% of the worker's average net income over twelve months.

The combination of premium relief and the bonus benchmark aim to broaden the safety net for informal workers. Implementation will run through the BPJS Ketenagakerjaan enrollment system.

Risk Base Pricing Motor Insurance

Motor vehicle insurance in Malaysia could be priced with greater dependence on a driver’s safety, aimed at reducing road crashes and rewarding responsible motorists. The proposed risk-based pricing model for motor insurance aims to reward safer driver lower premiums.

Currently, there is a degree of cross-subsidization where lower-­risk motorists are offsetting the higher claim cost of others. PIAM is working closely with Bank Negara Malaysia and related government agencies to see how we can further improve road safety and behavior.

In comparison with the current motor insurance framework that rewards drivers based on their no-claims discount (NCD) claims history, the risk-based pricing model incorporates a wider range of factors, including driving behavior, accident frequency, traffic offences, vehicle usage patterns and other relevant underwriting indicators in order to more accurately reflect an individual’s risk exposure.

Risk-based pricing is already standard for most insurance products, such as medical insurance. Pricing depends on the cost incurred through claims, which are then translated into the premiums paid. While motor insurance remains a regulated industry, any enhancements to the framework implemented must remain fair, transparent and appropriate for consumers. The end goal is to reduce the number of road accidents and road fatality rates.

A major pillar of the initiative is to build supporting infrastructure with industry, ideally requiring reliable, timely data from relevant enforcement and regulatory agencies to establish a comprehensive, integrated claims and risk database.

This allows better predictive modelling, allows early identification of high‑risk driving patterns, supports incentivizing good driving behavior and identifies interventions required for risky driving behavior in alignment with the public road safety agenda.

The motor insurance segment of the general insurance industry posted losses of RM289.3 million in 2025.  where a combined ratio of 103% reflected that claims payout exceeded premiums collected, and the average cost per claim increased by about 20% to RM8,831 in 2025.

Medical Tourism Penang, Malaysia

Penang recorded strong growth in its medical tourism sector, with foreign patient numbers rising to 527,176 in 2025. This represents a 25.94 per cent increase compared to the previous year.

The increase in medical tourism generated revenue of up to RM1.136 billion, which is a 26.6 per cent annual increase compared to RM898.07 million in 2024. The data from the Penang Centre of Medical Tourism (PMED), covering 16 private hospitals in the state, showed foreign patient numbers stood at 418,608 in 2024.

Penang is also actively promoting medical tourism overseas, including in China, Indonesia, Singapore, Taiwan and Myanmar, in collaboration with Penang Global Tourism, the Malaysia Healthcare Travel Council and Tourism Malaysia.