My Actuarial Working Life

In one of the discussions with my team about medical insurance, I emphasized that claim data is one of the most valuable assets  for insurance companies. Even if insurers engage third-party administrators ("TPAs") to handle claim processing, it’s crucial for them to retain access to detailed claim data – and at a granular level.  

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:  

When I read " Everyone wants to assume that the health plans are the bad guy ", I couldn't help keep nodding my head. This interesting statement was written by David Axene (President & Consulting Actuary, Axene Health Partners) in his article " Is California leading states in health care reform? ", posted in  SoA Blog . Many people have an perception that insurance companies are the greedy devils which always look for opportunities to get excessive profits by increasing the health insurance's premium rates - but do they really complain on the increasing medical costs charged by the medical providers (like private hospitals)? They do not understand the premium increase is mainly attributed to the increase in medical costs, or they refuse to understand? "Public" here refers to those public who have bad perception on insurance companies selling health insurance Perhaps this disappointing public behaviour can be explained by the above cha...

During a seminar on health care reform held recently in Kuala Lumpur, Malaysian Health Minister Liow Tiong Lai mentioned that the government would refer to the healthcare model in Taiwan (one type of social insurance, i.e. National Health Insurance (NHI)) as one of the bases to reform Malaysian health care system. The government will develop the National Health Financing Authority (NHFA) to manage the fund under the National 1Care Health Scheme (1Care) - which is expected to be funded by government, private sector, employers and the people. Theoretically, it is a good idea to have a structured healthcare system that can provide healthcare services to all citizens in the country. In my view, expensive medical cost is one of the key financial risks that everyone should really concern on - almost everyday we can read news about unfortunate folks with serious illnesses begging the public to fund for the expensive medical costs. According to Liow, starting from 2004, the medical ...

Are you a hardcore football fans? Are you extremely stressed when you are watching the match which the team you support is about to lose? If your answer is "Yes", you better take care your heart well during the World Cup Tournament... I learned an interesting fact during a seminar yesterday, i.e. a study reported that during World Cup Tournament time, hospital admission from people having heart attack  increases tremendously due to emotional stress - the example given was when Argentina beat England in a penalty shoot-out during the 1998 World Cup, there was a 25% increase in hospital admissions for heart attacks in England ( You may refer to " Can Watching Soccer Give You a Heart Attack? " for details ). Oops, look like football can appear as a hazard which affect the losses arising for health / critical illness insurance...? (I never understand how the emotional stress is because I have no interest in football...)