Income Insurance’s IP claims inflation outpaces that of medical cost

CLAIMS inflation has significantly outpaced medical cost inflation for Income Insurance’s Integrated Shield Plans (IPs). Therefore, the insurer has moved to raise premiums across all hospital ward types. Other insurers have focused on raising premiums only for private hospital plans.

Medical cost inflation is currently between 10 and 13 per cent, but overall claims inflation for Income is up to 25 per cent for 2023 and the first quarter of 2024.

Income is raising the premiums of restructured hospital IP base plans by an average of 14 per cent, and by 23 per cent when riders are included. It has not raised premiums for restructured hospital plans since 2015. In 2021, it reduced premiums due to the Covid-19 pandemic.

For private hospital base plans (Enhanced Preferred), the average increase is 21 per cent. There is enhanced cancer cover for private hospital and Class A plans with riders.

Income said: “The premium increase is necessary to ensure that our IP portfolio remains sustainable to support the long-term healthcare needs of our policyholders, given that Singapore is experiencing a double-digit (10 to 15 per cent) increase in medical cost inflation, which is compounded by our overall IP claim inflation of up to 25 per cent.

“Thus, the premium increase is a strategic measure to ensure we continue to achieve this balance as we fulfil our obligations to our policyholders sustainably.”

Income’s underwriting profits for its IP portfolio held steady at S$16 million for 2023 and 2022.

The insurer said it observed two trends among policyholders. Those aged between 21 and 30 have more access to options and can enjoy flexibility in their decisions on IPs. Retirees and pre-retirees, however, may no longer have active income and “may be more inclined to base their decisions on financial needs and affordability”.

Most Income customers who hold private hospital plans and riders are 50 or younger. The majority is understood to hold the private plan (Enhanced Preferred) with Classic Care rider, where the average premium increase is 29 per cent.

In terms of cancer cover, for private hospital and restructured Class A plans and riders, Income is offering 23 times the MediShield Life monthly claim limit for cancer drug treatments in the Cancer Drug List for one primary cancer.