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Insurance premiums may go up by 85% in Singapore by 2030

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It is no surprise that health insurance is expensive. Unfortunately, in countries with an ageing population, costs can be expected to rise even more.

According to a recent whitepaper by Mercer, the incidence of non-communicable diseases (NCDs) – such as diabetes, cancer, chronic respiratory disease, and cardiovascular disease – increases with age, posing a challenge for Asia Pacific’s mature workforces.

While the total population in the APAC region is expected to grow 20% by 2030, the prevalence of NCDs is projected to grow by over 40%.

With medical inflation driving up the cost of treatment, it is estimated that by 2030, through an increase in the prevalence of NCDs, societal ageing may drive insurance premiums up by 85% in Singapore and 107% in Malaysia.

Mercer NCDs whitepaper

This means that employers in the region can expect to face higher premiums for employee group insurance. Besides that, employers could be further burdened with loss of productivity associated with the increasing prevalence of NCDs.

With many companies looking to cut budgets, Human Resources spoke to Rose Kwan, partner, growth markets health director, Mercer Marsh Benefits to find out how HR leaders can prepare to cope with the cost of premiums.

One tip Kwan has is to know your numbers.

“Understand how your workforce is changing, the health of your workforce, what they are utilising, and where the expenses are coming from. Identify the trend, the spending pattern and you are able to predict your future costs so there are no surprises,” she advised.

Once you know your numbers, her advice is to proactively manage costs by managing providers, looking at the health of the workforce and putting in preventive measures.

However, Kwan cautions that cutting back on costs is not always the solution as it can have a negative impact on the workforce and make the organisation uncompetitive in terms of benefit offering.

“Also, changing providers is only a short term solution and is again disruptive to your workforce. It’s your claims cost that is driving up the cost of the premium, you need to address the root cause.”

Photo / 123RF

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