Medical insurance providers in Malaysia have seen their revenues drop to $7.5 billion ($7.3 billion) in the first quarter of this year, down more than 50% from the same period last year.
The number of medical providers has been steadily declining in recent years.
Many medical insurance companies have been forced to shut down.
“This is the first time the number of providers is declining,” said Tan Chee Hock, chairman of the Malaysian Medical Insurance Association.
“Many companies are struggling financially.”
Some medical insurance providers have faced difficulty getting funding from the government, which is forcing them to close their operations.
“The number of new medical insurance businesses is falling due to the lack of financial support from the central government,” Tan said.
“There are no new insurance companies and there is not enough revenue to run them.”
In November, Malaysia became the first country in Southeast Asia to make it mandatory for health insurance providers to be licensed.
The move was widely seen as a way to help protect the health of the public.
Malaysia is the most populous country in the region.