Some IP insurers hike premiums of base plans for private hospital and A-class wards

[SINGAPORE] Policyholders may feel relief that the newly designed Integrated Shield Plan (IP) riders are at least 30 per cent less costly than the older riders. But the savings are diluted by hikes in premiums of IP base plans.

As far as The Business Times can ascertain, five out of seven IP insurers are raising premiums of their base plans, particularly those catering for private hospitals and Class-A wards of restructured hospitals. For some, the premium hikes are in double digits.

Even the most consistently profitable insurer, Prudential, is raising the base IP premiums for its private hospital and Class-A plans.

HSBC Life, Income Insurance, Raffles Health Insurance (RHI) and Singlife are also raising premiums. For RHI, this is the first base-plan hike since it launched IPs in 2018.

Prudential said: “Premium adjustments reflect medical inflation, rising healthcare utilisation, and the increasing cost of advanced treatments and drugs affecting the entire healthcare system. The extent of any premium increase will vary by plan and age band, and the claims experience.”

HSBC Life said it was making “targeted adjustments”, which are in line with industry standards and “part of our broader efforts to ensure long-term sustainability of healthcare financing while continuing to provide meaningful protection”.

Great Eastern (GE) confirmed that it was not raising base premiums.

AIA said there are no base-plan hikes in the first half of the year, but is unable to comment beyond that “as premium adjustments will depend on various factors such as evolving market conditions and medical inflation”.

Havend chief executive Eddy Cheong wrote in an advisory to clients that the combined effect of the hike in IP base-plan premiums plus the new riders is a smaller overall saving. “For those keeping the old rider, their overall premium including the base plan would cost much more than before.”

Rising average bill size

The IP market has struggled for years with rising premiums and poor profitability, as rising medical inflation and an ageing population have driven up claims.

In GE’s experience, the average bill size at private medical providers rose 23 per cent between 2021 and 2024. For restructured hospitals, the average rise was 10 per cent.

The crop of new riders, which increases policyholders’ out-of-pocket expenses, is just the latest effort to curb “buffet syndrome”, reflected in excessive claims.

The new riders, which are around 30 per cent cheaper than the old ones, do not cover deductibles. They also raise the cap for co-payment to S$6,000, compared with S$3,000 previously.

Alex Lee, president of the Singapore Actuarial Society, said recent healthcare cost inflation has been running in the double digits annually.

“Looking back at the average profitability of IP insurers, even the best-performing one only managed a mid-single-digit per cent profit. Collectively, IP insurers only managed a margin of 0.5 per cent between 2015 and 2024…

“This means that skipping one year of premium increase will immediately make that a loss-making year, triggering a bigger jump in premium the following year.”

Based on underwriting results for 2024, four insurers were in the red. The most profitable was Prudential, which reported an underwriting profit of around S$25 million. In 2025, six out of seven IP insurers raised premiums, except RHI.

Lee said: ”Without realignment of the population’s healthcare consumption behaviour back to what we collectively can really afford, policyholders can expect premiums to continue to rise. This latest change to the rider rules is an important step in the correct direction. It is expected to be effective because healthcare providers are more willing to listen to their patients’ opinion on the pricing of drugs and services…

“Increasing policyholders’ share of the bill for healthcare services will help increase their participation in healthcare pricing discussion.”

Patients are in the best position to assess their own affordability, he added, whether in the form of current out-of-pocket expense or future premiums driven by the collective healthcare consumption behaviour of policyholders sharing the same risk pool.

Medical inflation rate

The average medical inflation rate, as projected by WTW for 2026 for Singapore, is 16.9 per cent, compared with 15.5 per cent in 2025. WTW’s forecast is based on a global survey of health insurers in 82 countries.

It said Singapore’s trend of growing medical cost is influenced by several factors, including an ageing population, a rise in disease incidence, improved early detection, and the long-term management of conditions such as cancer, diabetes and obesity.

Income chief customer officer Dhiren Amin said premiums of its IncomeShield main plans will be raised by an average of 13 per cent from Apr 1, “which remain lower than the increase in medical costs in Singapore, which is expected to be at 16.9 per cent”.

“The premium increase of our IP main plans with (the old) riders averages 7 per cent… Premium adjustments are determined based on overall claims experience across IP main plans and riders, taking into account rising healthcare costs,” he said.

Singlife is also raising the premiums of its base IPs and older riders, even as it rolls out new riders that comply with the Ministry of Health’s latest requirements.

Singlife chief executive Helen Shen said: “Advances in medical technology have resulted in more sophisticated and more expensive treatments, while higher manpower costs have added to cost pressures.” These are on top of an ageing demographic, which has raised claims frequency and costs, she added.