In brief
Medical premiums can rise because of:
- higher medical treatment costs;
- increased utilisation of healthcare;
- ageing of an individual or insured population;
- claims experience on group plans;
- changes in membership or family composition;
- benefit structure and network use;
- insurer portfolio repricing;
- geographic scope and provider costs; and
- changes in deductibles, co-payments or plan design.
A higher renewal is not automatically evidence that the insurer is uncompetitive. A lower alternative is not automatically better value. The renewal needs to be decomposed into price, benefits, claims, underwriting continuity, network and longer-term sustainability.
Medical inflation is real – but it does not explain every renewal
Healthcare costs have tended to rise faster than general inflation in many markets. Aon’s 2026 Asia-Pacific data forecasts Hong Kong’s gross medical trend rate at 9.0% for 2026, against general inflation of 2.2%. That is useful context, not a prediction that every Hong Kong medical policy should increase by exactly 9%. An individual renewal can be higher or lower because insurers also consider age, product repricing, claims, portfolio experience, benefit changes and other factors. For employers, medical trend should therefore be treated as one input in renewal analysis rather than a complete explanation.
Age can materially affect individual medical premiums
Many individual medical plans use age-related premium bands or rates. A client can therefore experience an increase even where they made no claim and the insurer has not materially changed the plan. This is also why long-term affordability should be considered when a policy is first purchased. The cheapest plan at one age is not necessarily the most sustainable plan later. The Insurance Authority specifically notes that guaranteed renewal does not mean the renewal premium remains unchanged; age and other market factors may still affect premiums under the contract.
Group medical renewals have a different dynamic
Employer-sponsored medical plans can be affected by the claims experience of the insured population, particularly for experience-rated groups. Useful renewal data can include:
- total paid and outstanding claims where available;
- loss ratio;
- inpatient versus outpatient utilisation;
- large claims;
- diagnostic and specialist use;
- other optional benefits;
- membership movement;
- age profile;
- dependent participation; and
- network or provider patterns.
The point is not to punish employees for claiming. It is to understand what is driving cost and whether the benefit design remains appropriate.
A loss ratio needs context
A high loss ratio can contribute to a difficult renewal, but the number should be interpreted carefully. A single large hospital claim can distort a smaller scheme. Claims may be incurred late in the policy year. Membership can change. An insurer may also be repricing the wider portfolio independently of the employer’s own experience. For this reason, the renewal discussion should consider both the group’s claims story and the market environment.
What we see in practice
A renewal letter can create an immediate reaction:
Sometimes going to market is exactly right. But the better first step is to understand the 25%. How much relates to medical trend? Has the workforce aged or grown? Were there large claims? Did the insurer change its pricing? Are benefits unusually rich? Is the existing rate still competitive despite the increase? Once those questions are answered, the market exercise becomes more useful because it is testing a clear problem rather than simply reacting to a percentage.
Why a cheaper insurer can still be the wrong answer
For employer plans, the alternative may have:
- different medical-history-disregarded terms;
- network changes;
- weaker claims administration;
- different sub-limits;
- a less suitable international capability; or
- pricing that looks attractive in year one but is difficult to sustain.
For individual medical insurance, switching can create even greater underwriting risk because a new insurer may assess medical conditions that the existing insurer already covers. The comparison should therefore include what changes if the insurer changes.
What can be adjusted before cutting core protection?
Depending on the plan, cost-management options may include:
- changing deductibles or co-payments;
- reviewing outpatient structure;
- network steering;
- reviewing optional dental, optical or other ancillary benefits where relevant;
- adjusting room levels;
- reviewing geographic cover;
- member contribution strategies for employer plans; and
- improving employee communication around how benefits are used.
The right lever depends on what is driving the cost. There is little value in cutting a benefit that is not causing the problem while leaving the main cost driver untouched.
Private clients should distinguish affordability from insurability
For an individual, the premium can become difficult precisely when the policy has become hardest to replace. A client who has developed a medical condition since inception may face exclusions or other underwriting terms with a new insurer. This makes the renewal decision a balance between affordability and continuity. Before replacing cover, it may be worth testing deductible changes, area-of-cover changes or other plan adjustments with the current insurer where available.
A practical renewal framework
A six-step renewal review:
- Explain the increase – medical trend, age, claims, membership and insurer repricing.
- Review current value – benefits, network, claims service, underwriting and actual use.
- Test the market – compare like-for-like and deliberately different structures.
- Identify trade-offs – what is gained or lost for a lower premium.
- Consider continuity – especially medical underwriting and group transitions.
- Look forward – whether the chosen structure remains sustainable beyond one renewal.
The Trusted Union perspective: a renewal increase is a signal to investigate, not a decision in itself
Price matters. Clients should challenge unexplained or uncompetitive increases. But the best renewal outcome is not necessarily the largest percentage saving. For employers, we want to understand claims and benefit design before changing the scheme. For private clients, we want to understand underwriting continuity before surrendering established cover. In both cases, the objective is the same: make the next decision with the causes, options and consequences visible.
A renewal increase should be explained before it is accepted – or rejected.
Trusted Union helps employers and private clients review medical-insurance renewals with clearer context around pricing, claims, underwriting, benefits and long-term sustainability.
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