Rising Medical Insurance Premiums (1) – Is Emotion Clouding the Discussion?


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:  


1. Informed Decisions

For those of us working in corporate environments, the term "informed decisions" is second nature. When making strategic decisions, we gather sufficient information to ensure we’re on solid ground. The same logic applies here – I wonder if the MPs involved consulted with insurance or actuarial associations to fully understand the situation? Decisions made without the full picture may lead to unintended consequences.  

2. Emotional Bias

Bringing emotion into discussions introduces bias, which rarely leads to productive outcomes. When discussions shift into arguments driven by emotion, the goal becomes winning rather than seeking truth or solutions. Arguments centered around slogans like "Rakyat Win" can narrow the focus, making it difficult to explore alternative solutions that could benefit all parties involved.  

3. Blind Spots  

Some issues are inherently technical – and medical insurance is no exception. Unlike simpler products such as term or endowment life insurance, medical insurance involves complex arrangements requiring specialized knowledge. Without addressing the root causes of rising premiums, proposed solutions risk exacerbating the problem rather than solving it.  


Frankly, I’m a little concerned about potential measures. If insurers or Takaful operators are eventually forced to withdraw from medical insurance portfolios due to unsustainable losses, the public may face fewer options. It’s basic business sense to withdraw unprofitable products – and it seems unreasonable to expect companies to continuously subsidize loss-making products with profits from other lines of business.


Further reading:

  1. Rising Medical Insurance Premiums (1) – Is Emotion Clouding the Discussion?
  2. Rising Medical Insurance Premiums (2) – Why Small Claims and Big Tails Matter?
  3. Rising Medical Insurance Premiums (3) – Is Medical Inflation in General a Fair Benchmark?
  4. Rising Medical Insurance Premiums (4) – Additional Metrics in Claim Analysis

Note: The above image is generated using Grok AI.

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