The value of health insurance is increasingly being recognised, with new premiums rising 25 per cent to $106 million in the first half of the year.
The Life Insurance Association (LIA) Singapore said yesterday that a sizeable portion comes from integrated shield plans (IPs) and riders. This suggests that more Singaporeans are appreciating "the complementary role of IPs" to the compulsory MediShield Life.
MediShield Life, which started on Nov 1 last year, bumps up coverage from MediShield, offering a basic hospitalisation insurance plan designed to pay large hospital bills and selected costly outpatient treatments. IPs offer further benefits.
Premiums for private IPs have two parts - a basic portion to pay for MediShield and a top-up part for the extra benefits.
The five insurers that offer IPs had said in June last year that they would not raise their portion of the premium for 12 months, but rising medical costs and increased use of services have reportedly begun to put a dent in profits, even though the increased coverage from MediShield Life was expected to reduce claim payouts from the top-up portion of IPs.
Asked if the premiums would be reviewed, LIA president Khoo Kah Siang said: "We can't comment on the individual insurers, and LIA does not govern the pricing. Most insurers say it depends on their experience...
"We (the insurers) are the intermediaries... but there are other parties involved, like doctors and how they charge. We... need to work with third parties to make sure the ecosystem is right, so overall, cost escalation is better controlled."
Dr Khoo added the industry is concerned about the escalating cost of claims, which could push premiums to unaffordable levels.
The LIA also reported industry results yesterday, with weighted new business premiums - a key performance gauge - rising 20 per cent to $844.9 million for the three months to June.
Weighted single-premium product sales rose 54 per cent to $282.1 million in the same period, while annual-premium products increased 8 per cent to $562.8 million.
Weighted new business premiums for the half-year increased 13 per cent to $1.52 billion over the same period last year.
The LIA has also stopped reporting the figures for annuities, as these have dwindled over the years since CPF Life - a national annuity scheme that allows older members to get a monthly income for life - started as an opt-in scheme in 2009.
Deputy president Ken Ng said: "We have seen a decline in annuity take up. The majority of consumers have opted for CPF Life as the main source of annuity, and the Central Provident Fund (CPF) is asking if insurers can provide more alternatives."
An advisory panel recently recommended options such as choosing between fixed payouts or those which start low but keep rising.
Although insurers have not been able to match something as good as CPF Life, said Dr Khoo, "the sector does have a number of products that can help to meet the saving needs for people to achieve their retirement goals".