Rank

Type of Health Insurance

Claims paid per $100 of premiums

1

Group Health Plans

$75

2

Medishield

$53

3

Private Shield Plans

$25

(i)  In terms of value-for-money, the private shield plans rank surprisingly low. The claims they pay per $100 dollars of premiums collected from policyholders are substantially below (a) group health plans and (b) Medishield.  In 2007, the average claims-to-premiums ratio was 22 per cent for medical expenses for the 3 largest private shield plans (NTUC Income, GE Life and AIA). It ranged from 12 to 30 per cent. Prudential was not included because its health insurance business is small. Aviva was not included because its business is new.  (However, Aviva was included in the data for Group Plans.)  The 22 per cent claims/premiums ratio was rounded up to 25 per cent to add a conservative bias -- (making private shield plans appear to be more generous than indicated in their Form 7 submissions to regulators).  

(ii) For Medishield, 2006 data is taken from Ministry of Health and CPF Board annual report.  It is after restructuring – (whereby private plans were able to "cherry pick" by choosing customers from the low-risk segment of the population).

Sources: Insurance company annual reports, Ministry of Health, CPF Board annual report and Monetary Authority of Singapore.