KUALA LUMPUR, Oct 21 — Hong Leong Assurance Bhd (HLA) will reprice medical insurance premiums and charges by 9 per cent a year for three years from November 2026, with further increases projected to bring cumulative repricing to 50 per cent by November 2030.
Staggered premium or insurance charge increases across five years under the insurance company’s 2026 medical repricing exercise will apply to nine medical insurance products, beginning on policy or rider anniversaries from November 1, 2026, according to an internal memorandum issued to HLA’s agency force on July 28, as sighted by CodeBlue.
Under the schedule, policyholders will face a 9 per cent increase in the first year, from November 1, 2026 to October 31, 2027. This will be followed by another 9 per cent in the second year (November 1, 2027 to October 31, 2028) and a further 9 per cent in the third year (November 1, 2028 to October 31, 2029), bringing the cumulative increase to 27 per cent in three years.
HLA’s memorandum projected an 11 per cent increase in the fourth year (November 1, 2029 to October 31, 2030), followed by a 12 per cent increase in the fifth year onwards from November 1, 2030.
If implemented as indicated, the repricing would amount to a cumulative 50 per cent hike over five years from November 2026 to November 2030 onwards.
HLA described the fourth- and fifth-year increases as indicative and subject to revision. The insurer warned that actual premium or insurance charge increases could be higher, depending on the effectiveness of broader health care reforms and collective efforts by key stakeholders, including private hospitals and insurers, to contain medical inflation.
The nine affected products are MedGlobal, MedGlobal II, MedGlobal III, HLA MedGlobal IV, HLA MedGlobal IV Plus, Health Net, H&S, H&S Plus, and H&S Plus II.
“Health care costs in Malaysia have been steadily increasing over the past few years, with medical cost inflation reaching 16 per cent in 2026,” wrote HLA group managing director/chief executive officer Loh Guat Luan and chief distribution officer Koh Hoe Shin in their July 28 memorandum, citing Aon’s 2026 Global Medical Trend Rates Report.
“The year-on-year increase is driven primarily by the growing prevalence of chronic diseases, advancements in medical technology, and prescription of new drugs. This trend has also led to higher utilisation of health care services, further contributing to the overall increase in medical costs.”
HLA’s 2026 medical repricing exercise comes as Bank Negara Malaysia’s (BNM) interim measures to limit medical insurance premium hikes to under 10 per cent for most policyholders, from December 2024 to the end of 2026, are coming to a close.
Average Treatment Cost Stayed The Same, But Claims Experience Worsened
Even as HLA’s top executives cited Aon’s report, the insurer noted that its own experience with MedGlobal II, MedGlobal III, MedGlobal IV, and MedGlobal IV Plus, as well as other plans in the same cohort or group, showed zero per cent medical inflation based on a three-year average from 2023 to 2025.
Medical inflation was defined as a “year-on-year change in average treatment cost as billed by hospitals for surgical and non-surgical treatments insured or covered under the product”. In other words, treatment costs billed by hospitals to HLA stayed the same on average in three years.
But HLA’s claims experience across those products deteriorated because of an increase in both the usage of health care services and average claim cost.
In sample customer communications accompanying its 2026 repricing exercise, as sighted by CodeBlue, HLA said it paid an increased number of claims from MedGlobal II, MedGlobal III, MedGlobal IV, and MedGlobal IV Plus, rising by 68 per cent from 138 claims paid per 1,000 lives assured in 2022 to 233 in 2025.
HLA’s average claim amount rose by about 6 per cent from RM6,345 to RM6,720 over the same period.
The insurance company said its overall claims experience (average claim cost and usage of health care services) increased by 78 per cent.
The figures are drawn from a pooled group of medical products and riders, rather than claims data for each of the nine products subject to repricing. HLA’s sample letters to customers do not provide a product-by-product breakdown of claims frequency, average claim amounts, or the methodology used to calculate the overall increase in claims experience.
“The average claim amount, number of claims paid, and average treatment cost billed for a year is derived based on data from 1 July of the preceding year to 30 June of that year. For example, Year 2025’s average claim amount, number of claims paid, and average treatment cost billed is derived based on data from 1 July 2024 to 30 June 2025,” said HLA in a note.
Besides advancements in medical technology, usage of new drugs, and increased usage of health care services because of advancements in diagnostic technology, HLA’s sample customer communications cited the “rise of chronic diseases, such as diabetes and diseases related to high blood pressure, high cholesterol, and obesity” as another factor that contributed significantly to an overall increase in medical costs.
One-Year Reprieve For Policyholders Aged 60 And Above With Lowest Plan Option
HLA’s 2026 repricing exercise will be deferred by one year for policyholders aged 60 and above who are on the lowest plan option within their respective medical insurance products.
The deferment is not an exemption from the increases as these policyholders will still be subject to repricing after the one-year delay.
An illustrative customer communication for HLA MedGlobal IV shows how the one-year deferment applies to policyholders aged 60 and above on Plan 150, with repricing postponed in the first year before the scheduled increases take effect in subsequent years.
The lowest eligible plans vary by product. They include Plan 100 for MedGlobal, MedGlobal II and MedGlobal III; Plan 150 for HLA MedGlobal IV and HLA MedGlobal IV Plus; Plan 80 for Health Net; Plan 100 for H&S; and the standard plan for H&S Plus and H&S Plus II.
HLA said affected policyholders will still receive notification letters explaining the changes.
Under MedGlobal IV and MedGlobal IV Plus, HLA’s sample customer communications touted a one-time revision of premium structure from the current age-based premium increases that may be large upon hitting retirement age.
“To align with an industry-wide initiative supporting customers to manage premiums at older ages, we will be introducing a one-time exercise to revise the premium structure starting from age 60 onwards (see Chart 2). Under the revised premium structure, the larger increases by age band from age 60 onwards will be replaced with smaller, gradual annual increases, creating a more even and manageable progression in premiums over time,” said HLA.
“With this one-time exercise, the total premium payable for the rest of your coverage duration under revised premium structure (before medical repricing) will be lower compared to current premium structure.
“You may see an increase in premium at your next rider anniversary. However, over time, the total premium payable for the rest of your coverage duration under revised premium structure (before medical repricing) will not be higher than what you would have paid under current premium structure.”
Policyholders Given Options To Manage Higher Premiums
HLA has outlined several options for policyholders who may struggle to afford the higher premiums or insurance charges.
Those who wish to maintain their existing coverage can pay the revised premiums. For investment-linked policies, they can also make additional regular top-ups to help sustain their coverage, or continue paying their existing premiums while accepting that their policies may lapse earlier than projected.
Alternatively, policyholders can convert to another medical plan, either within the same product or under a different product, subject to the applicable terms.
They can also temporarily downgrade to a cheaper plan until December 31, 2027, and return to their original plan within two years, or before December 31, 2029, whichever is earlier, without further medical underwriting, subject to HLA’s conditions.
HLA also advises customers to review their overall coverage and affordability, including whether to adjust their sum assured or other benefits.
Upgrading coverage will generally require medical underwriting, with exceptions for HLA Major Medi Plan 150, which has an annual limit of RM75,000, and HLA Major Medi II Plan 200, with an annual limit of RM120,000, provided the new coverage term does not exceed the existing policy term.
HLA’s memorandum cautions agents against presenting hospitalisation income plans as a substitute for medical insurance. Such plans pay a fixed daily cash benefit during hospitalisation, rather than reimburse actual medical expenses.
For example, if a policy pays RM200 per day of hospitalisation, the policyholder receives RM200 for each eligible day in hospital, regardless of whether the hospital bill is RM2,000 or RM20,000.
Some conversions or upgrades may require policyholders to take up a new policy. HLA’s sample customer communications warn that this may restart the first-year premium allocation or commission structure.
Investment-Linked Policyholders Face Risk Of Earlier Policy Lapse
HLA’s 2026 medical repricing exercise has particular implications for customers with investment-linked policies where medical insurance charges are deducted from the policy’s investment fund.
Higher charges can deplete the fund more quickly, potentially causing policies to lapse earlier unless customers increase their premiums or make additional top-ups.
A MedGlobal II sample for a 37-year-old policyholder paying RM200 a month, with a fund value of RM50,977.34 as at March 31, 2026, projects that the policy could lapse at age 77 if future premiums are not paid. If all future premiums are paid, however, the policy is projected to remain sustainable until age 100.
In a separate MedGlobal III Plan 200 sample for a 22-year-old policyholder paying RM190 a month with a fund value of RM10,395.76 as at March 31, 2026, HLA projects that the policy could lapse when the policyholder turns 54, even if existing premiums continue to be paid.
HLA estimates that an additional RM98.10 a month would be needed to sustain the policy until age 100. The insurer also illustrates staggered top-ups, starting at an additional RM17.10 a month in January 2027 and increasing to RM95 by January 2031.
HLA recommends that customers refer to their individual policy sustainability assessments before deciding whether to maintain existing premiums or make additional top-ups.
The insurer says 95 per cent of recommended top-up premiums will be allocated to investment funds, while up to 3.75 per cent may be paid as commission to sales intermediaries.
HLA Applies ‘Concurrent Case Management Intervention’
In its sample customer communications, HLA said it had certain cost containment initiatives in place, such as regularly reviewing claims and applying “concurrent case management intervention”.
“This allows us to manage a case as it progresses, rather than after the cost has been incurred,” said the insurance company.
It’s unclear if such “concurrent case management intervention” involves actions that may be perceived by doctors as insurer interference in their clinical decision-making.
HLA also said it reviews and pre-negotiates medical fees with panel hospitals, besides practising “stringent” selection criteria for panel hospitals.
“We understand that managing health care costs is important to you. In addition to our ongoing efforts, you may consider the following,” added the insurer.
“Clarify the necessity of all recommended procedures and tests to ensure they are appropriate for your needs; for non-emergency admissions or elective surgeries, you may compare expected costs between hospitals; and/or request itemised bills, review the charges carefully, and seek clarification if any charges appear unusually high.”
HLA’s memorandum said policyholders will receive notification letters according to a staggered communication schedule based on their policy anniversary dates. The letters are accompanied by frequently asked questions and, where applicable, forms relating to regular top-ups for investment-linked policies.
CodeBlue sought comments from HLA on its medical repricing exercise, including the projected premium increases and their implications for policyholders, but didn’t receive a response at the time of publication.
