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Regulatory initiatives to help Malaysian life insurance business surpass US$13bn in 2023, says GlobalData

The Malaysian
life insurance market, in terms of gross written premiums, is projected to grow
at a compound annual growth rate (CAGR) of 4.4% from MYR46.7bn (US$11.6bn) in 2019
to MYR55.4bn (US$13.7bn) in 2023, says GlobalData, a leading data and analytics
company.

GlobalData’s report, ‘Malaysia Life Insurance: Key Trends and Opportunities to 2023’, reveals that term insurance, endowment and whole life products account for almost 90% of Malaysia’s life insurance business. Rising working-age population and government and regulatory initiatives towards affordable insurance products are the key factors driving the growth.

Sangharsan Biswas, Insurance
Analyst at GlobalData, comments: “As of end-2018, the share of working-age
population stood at 66.2%. This offers huge growth potential as 46% of the
population still does not own life insurance product.”

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In 2017, the Malaysian government
launched affordable insurance scheme, Perlindungan
Tenang
, aimed at enabling accessibility of life insurance for economically
weaker section of the population. Since then, leading insurers such as Allianz
introduced micro-insurance products to tap into this segment. Sun Life Malaysia
partnered with U Mobile to offer affordable mobile-based life micro-insurance, to
cater to U Mobile’s customer base. Similarly, Gibraltar BSN partnered with
mobile wallet provider Boost Malaysia to promote mobile-based insurance premium
payments. These steps are expected to expand life insurance penetration in the
country.

Efforts are also being made
by the regulatory authority and industry association to promote insurance
awareness. In 2019, a national strategy plan for financial literacy was
launched to implement large-scale awareness campaign.

The regulatory authority has
also been taking steps towards improving product accessibility. It is now mandatory
for life insurers in Malaysia to offer standalone term insurance through their direct
distribution channel – either own office or online platform. Due to their more
affordable pricing, it is expected to help insurance adoption.

Biswas concludes: “With
focus on improving accessibility of insurance in the country, insurers will use
technology to expand their reach and also offer affordable products.”

Source: GlobalData