Life insurance companies in Malaysia are reminded that they will be engulfed by a flood of wrath from 31 million Malaysians if they stubbornly persist with the excessive 40-70% hike in medical insurance premiums next year. The 16-member Life Insurance Association of Malaysia (Liam) should seriously reconsider the stated intention by their CEO Mark O’Dell that there will be no immediate changes to the existing medical insurance premium hike.
Any repricing adjustments of medical insurance premiums should be implemented gradually in a sustainable and reasonable quantum, not an excessive and massive 40-70% hike as is proposed for next year. There is no evident urgency for life insurance companies to have such a massive and excessive 40-70% hike in medical insurance premiums when they are recording healthy profit growth.
According to Bank Negara, overall profitability of life insurance and family takaful funds was higher in the first half of 2024 at RM8.4 billion as compared to the second half of 2023 at RM3.2 billion. Have life insurance companies not earned enough? Why should the life insurance companies be allowed to earn more profits from income off the backs of hard-working and hard-pressed Malaysians?
Do our salaries go up by 40-70%?
It is socially and morally unacceptable for life insurance companies that have recorded a healthy profit growth to seek higher profits at the expense of ordinary Malaysians already struggling with rising costs that outpace growth in salaries and wages. Do our salaries go up by 40-70%? Both Bank Negara and the Health Ministry should intervene and address the rising cost of medical care in private hospitals that is cited as the reason for the hike in medical insurance premiums.
However increasing medical insurance premiums is not the solution as it fails to address some of the reasons behind the rising costs of private healthcare. Expensive buyouts by private equity funds of private hospitals may result in higher medical charges to allow these private equity funds to claw back their pricey investments could also be a factor for higher medical costs.
Getting both the insurance companies and private hospitals not to overcharge their customers will ensure a more sustainable private healthcare for the benefit of all Malaysians. Should the premium hike be allowed at this unaffordable level, then this will lead to many Malaysians cancelling their medical insurance policies and turn to the already overburdened, that may jeorpardise the over-stretched public healthcare system.
Bank Negara must do their duty and exercise their responsibility on behalf of 31 million Malaysians to prohibit life insurance companies from proceeding with the 40-70% hike in medical insurance premiums next year.
LIM GUAN ENG
