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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

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
, 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

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

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South Korean life insurance business faces saturation, says GlobalData

combination of factors including the country’s demographic crisis, a
low-interest rate regime and slow economic growth are stifling the growth of
South Korea’s life insurance industry, which registered a compound annual
growth rate of just 0.5% during 2014-2019, says GlobalData, a leading data and
analytics company.

Korea’s life insurance business was worth KRW114,709bn (US$100.5bn) as of 2019,
in terms of total direct written premiums.

GlobalData’s report, ‘South Korea Life Insurance: Key Trends and Opportunities to 2023’, reveals that the South Korea’s life insurance penetration, direct written premiums as a percentage of GDP, declined sharply from 7.4% in 2014 to 6% in 2019.

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for enlarged chart

Tapas Bhowmik, Insurance Analyst
at GlobalData, comments: “South Korea is grappling with a long-term decline in
fertility rate. It dropped to a record low of 0.8 in 2019, less than half of
the replacement rate required for stable population. Low fertility rate entails
a steady decline in the working age population and has impacted growth of new

The slowdown in the sale of
life insurance products is also due to the existing low interest rates. The
Bank of Korea has been reducing benchmark rates in response to the economic

With declining yields, life
insurers are struggling to sell products with guaranteed returns, which are
very popular in the country. In fact, for the first time in 2019 life insurers’
annual investment yield was less than the payouts to policyholders. As a
result, insurers are shifting focus from selling guaranteed return products to
coverage-based ones.

Bhowmik concludes: “South
Korea’s export-led economy faces a prolonged slowdown due to the current global
economic slowdown as well as the unexpected disruptions due to coronavirus outbreak.
As a result, the short-term outlook for the life insurance business in South
Korea is likely to be under pressure.”

Source: GlobalData