Malaysian insurers and takaful operators have reached an agreement to cap annual premium increases to below 10% for approximately 80% of policyholders. This agreement also includes a one-year premium freeze for individuals aged 60 and above who have minimum coverage plans, as a temporary measure.
The Life Insurance Association of Malaysia (LIAM), the Malaysian Takaful Association (MTA), and Persatuan Insurans Am Malaysia (PIAM) discussed these measures during a meeting with the Public Accounts Committee (PAC) on February 26. The meeting focused on addressing the rising costs of healthcare and insurance premiums in the country.
In addition to the premium caps, policyholders whose coverage lapsed in 2024 due to premium repricing will be allowed to reinstate their policies without requiring new underwriting.
To further ease the financial burden, new, more affordable medical and health insurance products are expected to be introduced by 2025.
The industry also presented a series of long-term recommendations aimed at improving the affordability, transparency, and sustainability of Malaysia’s healthcare and insurance sectors. Key proposals include implementing diagnostic-related grouping (DRG) pricing to standardize medical billing, working with Bank Negara Malaysia (BNM) to develop basic, sustainable long-term insurance products, and encouraging private hospitals to create cost-containment units.
Other notable suggestions include promoting the use of generic drugs to lower pharmaceutical costs, exempting group insurance from the 8% Sales and Services Tax (SST) to enhance employee coverage, and creating an industry-wide claims database to minimize fraudulent claims.
The associations also proposed introducing co-payment models to encourage more responsible healthcare consumption and suggested appointing an independent consultant to examine the causes of claims inflation.
Emphasizing the importance of a collaborative approach, the associations stressed the need for involvement from regulators, healthcare providers, insurers, and policymakers to ensure the long-term affordability and sustainability of healthcare services in Malaysia.
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