Aon's 2027 Global Medical Trend Rates Report predicts a significant slowdown in medical cost growth across the Asia Pacific region. After rising 11.3% in 2026, growth is expected to drop to 9.7% in 2027. Despite this moderation, costs are still projected to increase nearly four times faster than general inflation, which stands at 2.5%. Slower growth may ease budgeting pressures but won't necessarily lead to lower insurance premiums, as these also depend on claims experience, workforce demographics, and coverage arrangements.
The net medical trend rate in APAC, after accounting for inflation, is projected to decline from 8.9% to 7.2%. China and India are expected to drive much of the regional slowdown, with medical trend rates falling from 7.8% to 6.0% and 11.5% to 10.1%, respectively. Other countries like the Philippines, Thailand, Malaysia, and New Zealand are also projected to see declines. In contrast, Singapore, Taiwan, and Indonesia are expected to see increases in their medical trend rates.
Cardiovascular disease remains the leading condition driving medical claims, followed by ear, nose and throat, respiratory disorders, and cancer. Hospitalization, clinics, and laboratories are major medical plan expenses, while prescription medications have become the third costliest component. To manage rising costs, Aon identifies wellness initiatives as the leading approach, followed by plan design changes and cost containment strategies.
Tim Dwyer, head of human capital at Aon, emphasized the need for employers to manage rising costs while protecting employee benefits. Alan Oates, head of global benefits at Aon, noted that the moderation in medical costs should not be interpreted as uniform relief for employers due to varying cost pressures across markets.