Insurers Aviva and Prudential are expected to be the first to tell policyholders that their premiums for Integrated Shield plans (IPs) are going up.
The rises are tipped to be announced next month after the 12-month moratorium, imposed when MediShield Life was introduced on Nov 1, is lifted.
The Straits Times understands that the average premium increases will be between 9 per cent and 15 per cent and likely to impact IP plans covering private hospitals.
This is because the number and dollar amount of claims made at private hospitals have shot up, compared with those at public hospitals.
Six insurers offer IPs here, with AXA the last to get on the bandwagon in May. The others are AIA, Aviva, Great Eastern, Prudential and NTUC Income.
It is only a matter of time before the other IP providers announce their premium hikes.
NTUC Income has said it plans to increase the premiums of some plans next year. Sources said the firm’s premium increase may not be confined to the highest class IPs as its claims experience appeared to be broad-based.
As AXA is the latest kid on the block, observers say that it is unlikely that the French insurer will raise premiums until its first year as an IP provider is up, at the very least.
AXA declined to comment.
The potential timing of Aviva and Prudential’s IP renewal letters announcing the premium increase indicates that the affected customers would be those whose renewals are up in December.
There is typically a 30-day notice period before plan changes are made for existing policyholders so those whose IP policies are renewed in November get to enjoy another 12 months with their premium rates maintained.
According to sources, affected Aviva and Prudential customers will be those who own IPs covering private hospitals.
Prudential is likely to offer enhanced benefits with the premium hikes.
For those whose plans cover private hospitals, their policy annual limit will be raised to $1.2 million from the current $632,700.
All new Prudential IP customers will be offered a higher benefit of a 365-day post-hospitalisation cover, up from the current 180 days.
AXA is the only insurer to offer the longest post-hospitalisation cover among IP insurers at 365 days as well as the highest policy annual limit at $1 million.
Aviva is likely to remove some benefits for new IP customers on Nov 15, according to sources.
This could include lowering the number of medical conditions in which a five-year moratorium underwriting can be applied.
The moratorium allows certain pre-existing conditions to be covered after an absence of symptoms, treatments or medication for five years from the time the policy is in force.
It has been reported that AIA and GE have been making only marginal profits on IP policies, with Aviva, Prudential and Income racking up losses.
lornatan@sph.com.sg
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