KUALA LUMPUR – Bayan Baru MP Sim Tze Tzin, along with several PKR senators, have slammed Prudential Malaysia over its announcement to increase medical insurance premiums.
According to Sim, the insurer’s statement, which cites “insurance claims have risen by an average of 19.6%” as the reason, contradicts the interim measures announced by Bank Negara Malaysia, which limit premium increases to a maximum of 10% over a three-year period.
“We hope that Prudential will issue a statement to clarify this matter. If true, Bank Negara should intervene. Once BNM has announced interim measures, insurance and takaful operators must comply with them”.
In a joint statement with senators Datuk Mohd Redzuan Othman, Amir Md Ghazali, Abun Sui Anyit, Bob Manolan Mohamed and Datuk Dr Ahmad Azam Hamzah, Sim referred to BNM’s first pillar which is greater price transparency.
“To support the initiative, MoH will undertake a regulatory and legislative review of the current oversight arrangement of private hospitals,” he quoted BNM’s elaboration on the pillar.
“This means the government is aware of the issue of excessive charges.”
On Sunday, FMT reported that Prudential Malaysia, in notice to policyholders, said the average number of claims had risen by 19.6% compared to the previous year.
The insurance provider will increase its medical health insurance premiums from next month, citing rising healthcare costs and an increase in claims, even as the company made significant gains on the regional and group level.
Prudential Malaysia’s CEO, Lim Eng Seong, noted that 74 out of 1,000 policyholders made claims under the PRUHealth plan, an increase from 62 a year ago, while the average claim amount grew by 3.9%.
Meanwhile, Scoop also sighted a notice by Prudential BSN Takaful (PruBSN) – a joint venture between Prudential and Bank Simpanan Nasional which provided takaful and shariah-compliant protection and savings plans – informing its clients of rising premiums.
According to the notice, this is because of “escalating healthcare costs and medical inflation that has resulted in higher claims for the medical portfolio”.
The company justified the premium hike by pointing to an average medical inflation rate of 5.1% per annum over the past three years, which has driven the actual cost of medical plans up by 23.6%. Lim highlighted that policyholders with no claims would see the lowest increase of around 4%, while those with claims would experience higher adjustments.
Prudential has offered policyholders options to downgrade benefits or adjust their premium payment frequency to manage the rising costs.
Despite rising costs, Prudential Malaysia remains a highly profitable entity. According to The Edge, Prudential Assurance Malaysia Bhd (PAMB), its official name in Malaysia, recorded a net profit of RM963.47 million for the financial year ending December 31, 2023, a substantial 68% increase from RM572.16 million the year before.
In 2019, the company made RM573 million profit before tax to about RM1.42 billion in 2023 – a remarkable 147% growth over the past five years.
Meanwhile, in the first half of 2024, PAMB reported a profit before tax of approximately RM1 billion, according to company reports.
Solmaz Altin, managing director of Prudential’s strategic business group, told The Edge that Malaysia is one of its key markets in Southeast Asia. Despite its relatively small population, the nation remains an essential hub for the insurer due to its highly sophisticated market and strong regulatory framework established by Bank Negara Malaysia.
“Not only do we see Malaysia as a market (with huge protection and health gaps), it is also a hub with a huge amount of talent available for us to source from,” Altin said. He explained that Prudential’s Malaysian operations serve as a shared service hub for the group, particularly in finance and risk management.
He also acknowledged that Malaysia’s insurance penetration rate remains relatively low at less than 2% of GDP, compared to over 5% in Singapore and Hong Kong, highlighting a significant protection gap in the country.
“There’re still a lot of out-of-pocket expenses in terms of health being paid by Malaysians. We would like to reduce that over time and we have put in investments for new products and systems to keep our market share growing,” Altin said.
At the group level, Prudential has continued to perform strongly. According to Life Insurance International, the company’s new business profit in 2024 rose by 11% to US$3.07 billion, while its adjusted operating profit after tax increased by 7% to US$2.58 billion.
Prudential also completed over US$1 billion in share buybacks as part of its broader shareholder return strategy. – March 25, 2025