KUALA LUMPUR (Oct 8): Malaysia’s general insurers are facing continued pressure in the medical and health insurance segment as medical inflation far outpaces premium growth, according to the General Insurance Association of Malaysia (PIAM).
PIAM said the segment has been recording underwriting losses for several years, driven by rising hospital costs and higher medical claims frequency.
“The reality is medical inflation is running at 15%, and the insurance inflation has not been keeping pace. After a few years, it becomes almost insurmountable. So the industry is going to take big losses on that stuff,” said PIAM deputy chairman Antony Lee Fook Weng at a media briefing on Wednesday.
For the first half of 2025, the segment recorded a combined ratio of 104.2%, reflecting continued underwriting losses. The industry registered a loss of RM23 million from medical and health insurance during the period despite a 6.5% year-on-year growth in premiums.
PIAM chief executive officer Chua Kim Soon said the losses were mainly driven by individual health policies, which saw both higher claim frequency and rising severity.
According to him, average claim severity increased from RM12,000 to RM14,000 among general insurers.
Lee, meanwhile, said the widening gap between healthcare cost escalation and insurance pricing remains a key structural challenge for the industry.
Measures under consideration to address the issue include a basic medical insurance framework and greater cost transparency among healthcare providers to improve affordability and manage claims inflation, he said.