My Actuarial Working Life

In its recent announcement on medical insurance , Bank Negara Malaysia highlighted Malaysia’s medical inflation rate of 15%, which surpasses the average across global and Asia Pacific region. However, when I consider the rate of increase in medical insurance premiums, I question whether this 15% figure is truly a suitable benchmark – are we really comparing apples to apples?   Before diving into my thoughts on this, I believe it’s helpful to explain the concept of " insured lives " experience.  

Bank Negara Malaysia has announced interim measures to address rising medical insurance premiums. While I can’t foresee how some of these measures will resolve the underlying issues, I am particularly curious to see how the Diagnosis Related Group ("DRG") payment model might help tackle the root cause.   Reflecting on my experience with my first actuarial employer, I recall being responsible for preparing claim analyses for individual medical insurance. One of the more interesting aspects of this work was constructing claim distributions based on actual experience. While the results were typically presented in tables, I often created histograms to better illustrate the distribution – in my opinion, the visual representation provided deeper insights into the claim patterns.  

Medical insurance has become one of the hottest topics in Malaysia’s insurance and Takaful industry lately. Some members of parliament (MPs) have urged Bank Negara Malaysia to impose a cap on rising medical insurance premiums. In the process, certain MPs have portrayed insurance and Takaful companies as profit-driven entities operating at the expense of public interest – with social media posts framing the debate as a "Rakyat Win."   I’d like to share a few general thoughts on this issue, steering away from technical details for now (perhaps I’ll dive into those another time). Here are a few perspectives we can take away from the recent developments: