About 83% of insurers cite greater use of healthcare as a key cost driver.

Asian health insurers facing a projected 12.5% increase in medical claim costs per person this year must decide whether paying for expensive treatments today could eventually reduce spending on diabetes, obesity, and other chronic conditions.

“The conversation now centres on whether the long-term health benefits justify the significant near-term pharmacy costs,” Joseph Zazzera, director at A.M. Best Company, Inc., said in a Sept. 22 report.

The debate centres on glucagon-like peptide-1 (GLP-1) therapies, which are used to treat diabetes and obesity. Zazzera said discussion about the drugs has expanded beyond weight loss as insurers assess their effect on long-term healthcare spending.

Asia’s medical claim costs per person are expected to rise 12.5% this year, nearly six times the region’s projected inflation rate of 2.1%, according to an October 2025 report by Mercer Marsh Benefits.

Indonesia has the highest forecast increase amongst Asian markets listed at 17.8%, followed by the Philippines at 16%, Malaysia at 15%, Thailand at 14.6%, and Singapore at 14%.

About 83% of Asian insurers cited more people seeking treatment for health conditions as a key driver of rising costs, whilst 78% pointed to changes in treatment and 71% to higher medical prices.

GLP-1 therapies could add to near-term spending because patients may require treatment for long periods.

“Pharmacy costs are immediate and measurable, whilst many of the anticipated benefits—including fewer diabetes complications, reduced hospitalisations, and improved management of obesity-related chronic diseases—may not be realised for years,” Zazzera said.

AM Best said the clearest near-term benefit is likely to be fewer or less severe health problems rather than longer lives. Sustained improvements could eventually reduce hospital treatment and other costs associated with chronic diseases, it added.

Most employer health plans do not cover GLP-1 drugs for weight loss, leaving many patients to pay for treatment themselves, according to AM Best. Lower drug prices might not make the treatments affordable because so many people could qualify for them, it added. 

The debate comes as insurers face broader pressure from expensive claims. About 87% of Asian insurers are concerned about high-cost claims over the next three years, whilst 85% are concerned about unnecessary or inefficient care, Mercer Marsh said.

Questions to ponder:

• Could paying for expensive treatments now reduce insurers’ medical bills later?
• How long would insurers have to cover treatment before potential savings emerge?
• Can insurers expand coverage for weight-loss drugs as Asia’s medical costs rise 12.5%?