We seek to clarify the data, calculations and figures reflected in the article, “MOH should play bigger role in regulating private health insurance needs” (April 10), by senior health correspondent Salma Khalik.
We have received numerous queries and feedback caused by a misunderstanding of AIA’s data in a table within the article, headlined “How Integrated Shield Plans (IPs) fared in 2019”.
First, AIA Singapore paid out claims totalling $442,848,848 to customers.
The amount – $211,138,464 net claims incurred – indicated in the article had net off the claims amount recovered from the reinsurer.
The total amount paid to customers is shown as gross claims settled within the Monetary Authority of Singapore’s Form A5, and accurately reflects the amount of coverage provided by AIA Singapore’s IPs.
Second, a more appropriate calculation to derive management and distribution cost ratio to measure the efficiency of managing the portfolio is to consider the cost and gross premium without factoring in reinsurance.
Doing this gives AIA Singapore a management and distribution cost ratio of approximately 20 per cent instead of 30.4 per cent.
The calculations within the article used net premiums, which were derived after deducting the reinsurance premiums paid to the reinsurer, and have net off reinsurance commission from the cost.
Although the company has reinsured some of its business to a reinsurer to manage its risks, the entire portfolio is still administered by the company and will incur cost to manage the portfolio.
AIA Singapore constantly enhances the way it protects and cares for the well-being of its policyholders through initiatives such as the introduction of AIA Vitality and pre-authorisation.
We actively contribute to efforts by the industry to ensure that quality healthcare in Singapore can be accessed affordably and sustainably, and look forward to working with all parties to achieve this.
Goh Ser Kee
Chief Actuary and Appointed Actuary of AIA Singapore