Letters to Editor
Published Date: 03 October 2020

Response to Letter “须加强监管保险产品”- Lianhe Zaobao, 21 September 2020

Dear Editor,

We refer to the letter by Mr Huang Da Tian (“须加强监管保险产品”, 21 Sep). Mr Huang raised concerns over the rising cost of his relative’s Integrated Shield Plans (IPs) with AXA Insurance Pte Ltd (AXA) and called on authorities to strengthen supervision over IPs.

To provide reliable coverage, insurance plans need to be commercially sustainable. This means insurers need to charge sufficient premiums to pay out claims. For IPs and health insurance more generally, insurers have limited visibility of the future consumption of healthcare and advances in medical treatments. Insurers make assumptions about these factors when determining their premiums. If the claims experience differs from these assumptions, insurers revise their premiums accordingly.

The Monetary Authority of Singapore (MAS) and the Ministry of Health (MOH) engage insurance companies on their pricing methodologies. Insurers are expected to price their products in a sustainable manner, using reliable data and making realistic assumptions. MAS requires insurers to treat customers fairly and disclose all relevant information, including that IP and IP rider premiums are not guaranteed. MAS will take insurers to task for poor pricing practices or unfair treatment of customers. 
MAS will review AXA’s IP and IP rider pricing methodologies and practices. AXA responded to Mr Huang in Lianhe Zaobao on 30 September 2020 to explain its pricing considerations for its IPs and IP riders.

The most effective way to control rising premiums is to contain healthcare costs increases by not over-charging and over-consuming healthcare services.
MOH is working with insurers and healthcare providers to address the factors contributing to rising healthcare costs, while ensuring that patients continue to have access to good quality and appropriate healthcare. For example, since the publication of fee benchmarks for the private sector, MOH has observed a slight reduction in average fees, and surgical fees for the same procedure have generally converged, with more than 80% below the upper limit of the fee benchmark. IP insurers have also helped moderate rising medical and claims costs by stopping the offer of full coverage IP riders since 2019. This has encouraged both patients and healthcare providers to choose appropriate and cost-effective treatments.

All stakeholders – patients, insurers, and medical practitioners - have a role in ensuring health insurance remains affordable.
Jerome Lee
Director (Corporate Communications)
Monetary Authority of Singapore