By Jacqueline David
KUCHING: Rising healthcare costs and regulatory changes are among the key factors driving the need for increased insurance premiums, said Sarawak Community Civil Awareness Association founder Datuk Dr Lau Pang Heng.
“Higher healthcare costs, vehicle repair expenses, or natural disaster payouts push insurance companies to adjust premiums upwards,” he said.
“Regulatory changes by Bank Negara Malaysia (BNM) and increased risk profiles also contribute to this trend.”
While acknowledging the impact on consumers, Lau praised BNM’s measures to mitigate the burden.
These include a 10 per cent annual cap on premium increases, a one-year pause for policyholders aged 60 and above, and reinstatement options for lapsed policies.
He urged insurers to prioritise corporate social responsibility by offering more affordable plans and simplifying their products.
“Insurers can launch re-branded simplified insurance policies to benefit their clients,” he suggested.
Lau also emphasised the need for enhanced value offerings, digital innovation, and increased consumer awareness.
Meanwhile, CFP Licensed Financial Planner Cheong Kwang Siang said medical inflation was the primary driver of medical insurance premium hikes.
“Malaysia’s medical cost inflation reached 15 per cent in 2024, surpassing the global average,” Cheong said.
“BNM’s 10 per cent cap is beneficial for policyholders, cushioning their financial burden.”
He advised policyholders to thoroughly review their coverage, explore alternatives like co-payment options and stay informed about market changes.
“While premium adjustments are necessary, it’s crucial for policyholders to evaluate their options carefully to maintain adequate coverage without incurring undue financial burden,” he added.
