Group medical insurance has long been treated as a fixed cost of doing business -- renew annually, absorb the increase, move on. That approach is becoming harder to sustain.
Data compiled by the Singapore Actuarial Society (SAS) from MAS filings, reported in The Business Times on 20 October 2026, shows that the aggregate underwriting margin for the group medical segment was minus 2.8% over the ten years to end-2025. Insurers have been paying out more in claims than they collect in premiums, and the gap has been widening.
The numbers behind the pressure
Where does each dollar of group medical premium go? Based on SAS data for annual plans from 2016 to 2025:
- 81.1% goes to claims
- 11.0% goes to distribution costs
- 10.8% goes to operating expenses
- -2.8% is the net underwriting margin
There is no slack in that structure. The group medical market is also highly concentrated: in 2025, the ten largest insurers accounted for more than 95% of the segment, according to the same report.
Singapore's medical trend rate, the year-on-year increase in the cost of healthcare, was 13% in 2026. Aon projects it will rise to 14.7% in 2027, against a regional Asia-Pacific average of 9.7%. The gap reflects Singapore's concentration of private-care utilisation and a competitive talent market that has pushed employers toward more generous plan designs over time.
Why claims keep rising
Several structural forces are at work simultaneously.
Post-pandemic plan design. A number of companies expanded benefits during and after COVID-19 to protect and retain staff. Richer plans attract higher utilisation, which feeds directly into claims ratios.
Fragmented care pathways. AIA Singapore's chief corporate solutions officer noted that when care pathways are fragmented, patients may bypass primary care, undergo unnecessary investigations, or seek treatment in higher-cost settings when clinically appropriate alternatives exist. Healthcare costs are often shaped before a claim is filed. This contributes to pricing volatility across the market.
Overconsumption dynamics. Industry commentators have observed that employers are examining levers to dampen claims and curb overconsumption, including co-payment design and benefit tier restructuring.
Cardiovascular and respiratory disease. Aon's analysis identified cardiovascular and respiratory diseases as the top drivers of higher claims across the market.
The IP rider complication
Changes to the individual Integrated Shield Plan (IP) market introduced in April 2026 add a further layer of complexity for employers. Under the revised rider rules, IP riders no longer cover deductibles, and the co-payment cap rises to S$6,000 from the previous S$3,000, according to The Business Times.
The concern is a substitution effect. With higher out-of-pocket costs under IPs, employees may increasingly look to their group medical benefits as the primary source of healthcare financing. Market commentary noted this could result in more first-payer activity in employer programmes as employees draw on group cover before their IP deductible is satisfied.
The structural issue is that healthcare utilisation needs to be considered across different insurance arrangements, rather than examining each policy in isolation. Deductibles and co-payments under IPs are designed to encourage cost-sharing, but where group medical insurance reimburses those expenses, the employee's actual out-of-pocket cost may be substantially reduced or eliminated, weakening the intended incentive.
Market commentary is cautiously optimistic about the longer term: once the rider changes bed in and utilisation patterns normalise, Singapore may fall in line with other major markets in the region. For now, the transition period carries elevated uncertainty.
What employers can do
The combination of sustained underwriting losses, rising medical trend rates, and IP rider changes points toward a more disciplined renewal environment. Employers who act before renewal, rather than reacting to a quote, are better placed.
Review claims data in detail. Request a full claims report, not just the ratio. Understanding which benefit tiers are driving claims, outpatient GP, specialist referrals, inpatient, allows for targeted adjustments rather than across-the-board cuts.
Consider co-payment design. Co-payment arrangements are among the levers being discussed with employers across the market. The calibration matters: a co-payment that is too high discourages necessary care; one that is too low has no effect on utilisation.
Review care pathway design. Plans that encourage primary care as a first port of call, and apply different benefit schedules for specialist access depending on referral route, can reduce cost without reducing nominal coverage.
Explore wellness programmes. Aon's analysis found that wellness initiatives addressing cardiovascular and respiratory disease, the top claims drivers, can help companies manage long-term medical costs. Programmes that nudge employees toward better lifestyle choices can reduce the predisposition toward chronic illness over time.
Benchmark the renewal. Accepting a renewal quote without market comparison means the employer has no reference point. A structured review, same scope, same headcount assumptions, same benefit tiers, is the only way to assess whether a proposed increase is reasonable or aggressive.
Engage a qualified intermediary. Plan sustainability is not a point-in-time exercise. An intermediary who understands the group medical market works with the employer across the full policy cycle, not just at renewal. That includes interpreting claims data in the context of market trends, identifying where plan design is driving unnecessary cost, stress-testing co-payment structures against employee demographics, and positioning the account for competitive terms when the renewal comes around. In a market where insurers are actively repricing and tightening underwriting criteria, how a risk is presented matters. An employer managing that conversation without market access and technical context is negotiating blind.
The group medical market has not reached equilibrium. Premiums will continue to rise as insurers build in the margin buffers they have been unable to sustain. Employers who understand the dynamics and engage proactively with plan design will manage the increase; those who treat it as an automatic renewal will simply absorb it.
Frequently asked questions
Why are group medical premiums rising in Singapore?
Singapore's group medical insurers have run at an aggregate underwriting loss for a decade, with claims consuming 81.1% of every premium dollar collected. At the same time, the medical trend rate, the year-on-year increase in healthcare costs, reached 13% in 2026 and is forecast to rise further. Insurers are repricing to recover ground, and the increases are structural, not cyclical.
How do the new IP rider changes affect employer group medical plans?
From April 2026, IP riders no longer cover deductibles, and the co-payment cap has risen to S$6,000. Employees facing higher personal costs under their individual Shield Plans may draw on their group medical benefits more heavily as a first-payer buffer. Employers should review whether their group medical plan inadvertently reimburses costs that are now intended to sit with the employee under the new IP structure.
What can employers do to manage group medical renewal costs?
The most effective actions are taken before renewal, not at the point of receiving a quote. Reviewing a detailed claims report by benefit tier, stress-testing co-payment design, ensuring care pathways encourage primary-care-first behaviour, and benchmarking the renewal against the market all give employers meaningful leverage. A structured review with an adviser who has access to multiple insurers is the clearest way to establish whether a proposed premium increase is justified.
Statistics and market commentary in this article are drawn from reporting by Genevieve Cua in The Business Times, 20 October 2026, sourcing data compiled by the Singapore Actuarial Society from MAS filings and projections from Aon's latest medical trend report.
This article is for general informational purposes only and does not constitute insurance advice. Cover terms, benefit structures, and regulatory requirements may change. Please consult a qualified insurance adviser for advice specific to your organisation and workforce.