Cost Drivers in Malaysia's Medical and Health Insurance and Takaful Industry: A Preliminary Exploration of a Centralized Claim Database

A First Look at the CentralizedClaims Database APRIL 2026 Valerie T Ulep, Hwa Ching Hue, Aakash Mohpal, Christophe Lemiere and Sarah Bales © 2026 International Bank for Reconstruction and Development / The World Bank 1818 H Street NWWashington DC 20433Telephone: 202-473-1000 This work is a product of the staff of The World Bank with external contributions. Thefindings, interpretations, and conclusions expressed in this work do not necessarily reflect The World Bank does not guarantee the accuracy, completeness, or currency of the dataincluded in this work and does not assume responsibility for any errors, omissions, ordiscrepancies in the information, or liability with respect to the use of or failure to usethe information, methods, processes, or conclusions set forth. The boundaries, colors, Nothing herein shall constitute or be construed or considered to be a limitation upon orwaiver of the privileges and immunities of The World Bank, all of which are specifically Rights and Permissions The material in this work is subject to copyright. Because The World Bank encouragesdissemination of its knowledge, this work may be reproduced, in whole or in part, for non- Attribution:Please cite the work as follows: World Bank (2026) “Cost Drivers in Malaysia’sMedical and Health Insurance/Takaful Sector: A First Look at the Centralized Claims Any queries on rights and licenses, including subsidiary rights, should be addressed toWorld Bank Publications, The World Bank Group, 1818 H Street NW, Washington, DC Cover photo: © 2474856299/ShutterstockDesign and layout: Good News Resources Sdn. Bhd., Malaysia / www.gnrsb.com Acknowledgements The task was led by Christophe Lemiere, Lead Health Specialist under the guidanceof Caryn Bredenkamp, Practice Manager for Health, Nutrition and PopulationGlobal Practice for the East Asia and Pacific Region, and Judith Green, WorldBank Group Country Manager for Malaysia. We are thankful to Matthew Dornan,Victoria Fan, Hideki Higashi and Ajay Tandon for their valuable feedback. The team This report was produced at the request of Government of Malaysia under theJoint Ministerial Committee on Private Healthcare Costs (JMCPHC) as part of theRESET initiative. The authors would like to express their sincere appreciation tothe Bank Negara Malaysia (BNM) team, led by Datuk Jessica Chew Cheng Lian, for The report would not have been possible without close collaboration with InsuranceServices Malaysia (ISM) led by Mahendran Samiappan. ISM provided the databasethat form the basis of the analysis in the report. Beyond providing the data, ISMundertook the years long effort of producing the standardized, centralized Medical The team is grateful for the opportunity to present preliminary results and receivefeedback from the JMCPHC meeting held on January 22, 2026. The team also Pleasecontact Aakash Mohpal at amohpal@worldbank.org for questions,comments, or suggestions related to the report. CONTENTS Acknowledgements........................................................................................................................................iiiExecutive summary..........................................................................................................................................1 1. Introduction..................................................................................................................................................52. Healthcare in Malaysia.................................................................................................................................93. Data and methodology.............................................................................................................................194. Overall trends in the private health insurance sector.............................................................................235. Service-level medical inflation..................................................................................................................29 References......................................................................................................................................................50 Annex A. MHIT central claims database structure......................................................................................52Annex B. Methodology for relative price and service-level medical inflation...........................................55 List of Tables Executivesummary Malaysia has seen sharp increases in Medical and Health Insurance/Takaful (MHIT)1premiums in recentyears, elevating affordability concerns and prompting a broad policy response.Rising claims costs haveoutpaced premium growth in recent years, creating financial pressure on insurers to reprice products; and oninsurees, especially the older policyholders, to maintain coverage. In this context, the availability of a newly This report provides an empirical assessment of cost drivers in MHIT claims fr