Spiraling premiums for MediShield Life Integrated Shield Plans (IPs) as insurers face the stress of mounting claims. All insurers suffered underwriting losses due to high claims, especially from those who had full riders and did not have to co-pay for bills at private hospital and A and B1 classes wards in public hospital.
Life Insurance Association, Singapore (LIA) found that bills at public hospital increased at an average of 3% a year, while average private hospital bills were increasing by 8% each year over the last 5 years.
Across all insurers, the biggest premium increase were for the younger age group of 31 to 40 years, with an increase of 195% over the last 5 years.
An insurance analyst, who declined to be named, said he expects premium hikes to hit older policy holders harder in future as they are more likely to make claims, are less lucrative market segment and yet insurers are not permitted to drop any IP policyholder.
Early this year, the Government steps in to regulate anyone buying a new rider would have to co-pay at least 5 per cent of the bill as it foresee more hikes in premium despite some premiums having more than doubled over five years.
Despite this, premium increase for IPs are likely to continue in near future as the insurers catch up with their losses. At least 2 more round of premium increases before the insurers are out of the red, one industry player said.
