The coming year is bringing a few changes to insurance in Singapore, which will need to be taken into account. The main noticeable changes will concern the medical inflation driving international medical insurance and the local employee benefits premium, and changes issued by the Ministry of Manpower (MOM) with regard to work injury compensation.
Medical inflation and its impact on local and international health insurance
The AON 2020 Global Medical Trend Rates Report estimates medical inflation in Singapore at 10% for 2019. The trend for the coming new year should remain at the same level, at a higher increase as compared to 2017 and 2018.
Around Asia, the average increase in medical inflation is seen stable at 8.6% in 2020, as compared to 8.7% last year, according to the report. Off the 19 countries surveyed for 2020, Singapore ranked 6th for medical cost inflation in Asia. It has held the same position in 2019 as well.
The two main countries expected to face healthcare cost inflation in 2020 are Pakistan and Malaysia at respectively 20% and 14%. They are followed by Thailand at 13.9%, Vietnam at 11% and Kazakhstan at 10.2%. Then comes Singapore at 10%.
Overall, the average medical inflation rate for Asia, which is 8.7%, seems to be higher than the global average of 8%. The impact of this medical inflation will be significant on local medical plans as well as international medical insurance, although people using single bedded hospitals and private clinics will be the most affected by medical inflation.
Work injury compensation (WIC)
The Ministry of Manpower (MOM) has announced significant changes for WIC in 2020.
1/ Change in compensation and the medical expenses limit
The minimum and maximum compensation in case of death and total permanent incapacity will increase by 10% for all accidents occurring after January 1st, 2020. The maximum limit for medical expenses will also increase by 25% from the same date, taking into account the increasing medical costs that have been recorded in Singapore in the past few years.
2/ Increase in the mandatory insurance limit for non-manual workers
WIC remains compulsory for all manual workers, but MOM has announced that it will increase the limit of mandatory insurance for non-manual workers. Prior to January 1st, 2020, only non-manual workers with salary equal to or below SGD 1,600 needed to be covered by WICA. Now, this limit has been raised to SGD 2,100 and is expected to reach SGD 2,600 by April 2021.
It is important that companies in Singapore understand these changes and take the necessary steps to apply work injury compensation for their staff in that category. More information is available on the MOM website.
If you have any questions about the insurance changes to expect in 2020 in Singapore, do not hesitate to contact us at Orix Insurance, Singapore. You could also visit our website to learn more about the business insurance solutions we offer.