KUALA LUMPUR, Dec 3 — Life insurance companies in Malaysia risk facing widespread public outrage if they proceed with plans to raise medical insurance premiums by an excessive 40-70 per cent next year, warned DAP chairman Lim Guan Eng today.

In a statement, the Bagan MP said the 16-member Life Insurance Association of Malaysia (LIAM), led by its CEO Mark O’Dell, should reconsider their decision not to alter the proposed premium hikes.

He urged for gradual and sustainable adjustments instead of what he described as a massive and unreasonable increase.

"Any repricing adjustments of medical insurance premiums should be implemented gradually in a sustainable and reasonable quantum, not an excessive and massive 40-70 per cent hike as is proposed for next year,” said Lim.

"There is no evident urgency for life insurance companies to have such a massive and excessive 40-70 per cent hike in medical insurance premiums when they are recording healthy profit growth,” Lim said.

He cited Bank Negara Malaysia’s data showing a rise in profitability for life insurance and family takaful funds, from RM3.2 billion in the second half of 2023 to RM8.4 billion in the first half of 2024.

"Have life insurance companies not earned enough? Why should they earn more profits off the backs of hard-working and hard-pressed Malaysians?” he questioned.

Lim criticised the moral and social implications of the hikes, pointing out the disparity between rising medical premiums and stagnant wages.

"Do our salaries go up by 40-70 per cent?” he asked, highlighting the burden on ordinary Malaysians already grappling with increasing costs of living.

He called on Bank Negara and the Health Ministry to address the root causes of rising medical care costs in private hospitals.

Lim suggested that expensive buyouts of private hospitals by private equity funds might be driving up healthcare charges, as these funds aim to recoup their investments.

"Getting both the insurance companies and private hospitals not to overcharge their customers will ensure a more sustainable private healthcare system for the benefit of all Malaysians,” Lim said.

He warned that unaffordable premium hikes could lead many to cancel their policies, further straining Malaysia’s already overstretched public healthcare system.

"Bank Negara must do their duty and exercise their responsibility on behalf of 31 million Malaysians to prohibit life insurance companies from proceeding with the 40-70 per cent hike in medical insurance premiums next year,” he concluded.