Insurers say India’s medical costs to climb 12.5% this year

Indonesia's average claims loss ratio reached 105.7% in Q1 2024.

Indonesia’s medical costs are seen to skyrocket by 19.4% in 2025, amidst two consecutive years of double-digit increases, according to WTW’s Global Medical Trends Survey.

Last year's and this year’s rates saw 12.4% according to WTW survey of insurers. 

Asia-Pacific is also slated to rise by 12.3% in 2025, thanks to rising health service usage, escalating pharmacy costs, and the adoption of new medical technologies are driving the surge.

Indonesia's average claims loss ratio reached 105.7% in the first quarter of 2024 and is projected to rise further in 2025. 

The increase is driven by global medical inflation, attributed to higher costs of raw materials for pharmaceuticals and medical equipment. 

The weakening rupiah has compounded the issue, as a significant portion of these materials and equipment are imported.  

In response, insurers have been adjusting premium rates and regularly reviewing health insurance products to maintain financial stability. 

The industry is shifting its focus from large employers to small and midsize enterprises, as insurers are increasingly hesitant to underwrite medical risks for corporations with large populations and comprehensive benefits packages.  

Insurers are also facing challenges from hospitals and providers, which often recommend excessive and unnecessary services involving new medical technologies. 

To mitigate costs, many insurers are replacing cashless payment systems with reimbursement methods, as reimbursement expenses for comparable treatments, diagnoses, and medications are 15% to 35% lower than those incurred through cashless payments.