Collaborative efforts and mutual knowledge sharing among insurers have improved overall insurance penetration in Malaysia and reduced the existing protection gap.
Life insurance in Malaysia has been on an upward trend in recent years. Despite multiple problems such as low insurance penetration and favorable economic prospects, insurance continues to grow due to stable domestic consumption and sustained government spending.
The insurance industry is also considering making life insurance more affordable in 2018. The main reason for this is to reduce the financial burden on low- and middle-income people so that more people acquire insurance policies for themselves. .
Another important reason for this step is that insurance coverage would soon become a necessity rather than an option, with Malaysia moving forward economically. The goal is to offer cheaper and affordable products so that everyone can benefit from comprehensive insurance coverage.
Steps taken to promote insurance sales
All major insurers have taken various steps to reach more people and promote insurance sales. The AIA Group plans to recruit more insurance agents from the Bumiputeras to increase their insurance penetration.
Only 15% of the total population of Bumiputeras have life insurance in Malaysia. The idea of AIA is to educate the community about the protection of life insurance. This will also contribute to Bank Negara Malaysia’s goal of achieving a Takaful penetration rate of 75% by 2020.
2018 will see an aggressive introduction of innovative products on the rope in the younger generation because the penetration rate of the current sales volume is quite low. Malaysians are becoming more and more Conscious of their health, new distribution channels will be put in place in 2018.
The focus is on digitizing life insurance products to focus on increasing insurance penetration and premium volume.
What happened in 2017?
Increase in insurance sales.
Increase in insurance claims.
Takaful insurance has shown better growth than conventional insurance.
Takaful Life Insurance exceeds conventional life insurance
In 2017, Takaful life insurance policies increased compared to conventional life insurance policies. This increase is also expected to continue in 2018. Takaful policies experienced a 5.2% increase in 2017. The Takaful family’s living regime accounted for 30.5% of the total new business premium in 2017.
The same growth is expected to continue in 2018, with Takaful continuing to show healthy growth momentum and strengthening potential of his position in Malaysia.
Major changes are expected in 2018
The main change in 2018 in life insurance could take the form of a change in the regulations regarding the activities of foreign insurers in Malaysia. Numerous reports of foreign insurers aiming to sell 30% of their domestic business through sales of strategic holdings or initial local public offerings may not sit well with foreign insurers.
However, BNM states that the Directive is not new and is only intended to honor the commitments made by foreign insurers when they applied to enter the Malaysian insurance market and rationalize their holdings for comply with the foreign ownership regulations.
With a relatively young population, insurance is expected to grow. Up to now, foreign insurers such as Great Eastern Holdings, Prudential PLC, the AIA group and Tokio Marine Holdings manage the majority of life insurance business in Malaysia. If the last rule of ownership percentage from 70 to 30 is applied, Malaysia will see an increase in the number of locally established insurers in 2018.
Local insurers would be state-owned entities, such as Kumpulan Wang Persaraan, Permodalan Nasional Bhd, the Staff Provident Fund and Khazanah Nasional Bhd.
New Takaful products to stimulate the wanted growth
Syariakat Takaful Malaysia Bhd, the only pure Takaful operator in Malaysia, has invested in new technologies, tools and applications. improve the insurance market and improve the customer experience.
As Takaful Malaysia’s total net income grew by 43.4% in 2017, these new products are expected to increase net income and growth in 2018. Takaful is also considering online sales through digitization to promote notoriety insurance and sales.
The learned Claims in 2017
With the increase in the number of life insurance policies deployed, claims for these policies in 2017 also increased correspondingly compared to 2016. The increase was approximately 5.3%, a total of RM 10.1 billion.
The majority of claims on these policies related to death and total and permanent disability.
What to look to the future in 2018?
Innovative life insurance products.
Affordable policies for middle-income households.
Policies easy to obtain via online portals.
Local insurers strengthen their position in Malaysia.
Increased awareness of life insurance.
Upward trend in 2017
Malaysia saw an increase in new business premiums and contracts related to the investment compared to 2016. Collective contracts and the total amount of insurance coverage also increased.
Life insurance protection has been offered to 12.6 million people (one life with several policies) in 2017. The insured per capita amount for 2017 was raised to RM 42,992 from 41,055 in 2016.