Page 60 - MEDICAL AND HEALTH INSURANCE

MEDICAL AND HEALTH INSURANCE

Therefore, if the group experience is favourable the premium charged

would be lower and more competitive. Similarly, if the group experience is

unfavourable the premium charged would be loaded up to the expected

experience.

POST CODE PRICING

Postcode pricing is generally location or geographical pricing. The insurer
may segregate the location by states or region, depending on the

classification adopted, for example, East Malaysia or West Malaysia.

The geographical location has a significant impact on the availability of the

providers, and the range of services and charges will differ greatly from a
high-end provider to a budget-provider for which the services and facilities

may be limited for chronic medical treatment.

Generally, post code pricing will only be applicable for group PMI policies,

based on where the client is located and the providers and facilities

available in their vicinity, as well as their utilisation pattern. So the

underwriter must be able to differentiate the premium to be applied,
accordingly.

Certain geographical regions, where there are many flourishing private

hospitals within a few kilometres of each other, are statistically known for

higher utilisation. Together with the local consumer behaviour, it is
prudent to exercise post code pricing for such groups.

The differentiation of locations can be segregated as a guide as follows:

a) Kiang valley

b) Northern areas, for example, Penang

c) Southern areas, for example, Johor

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