Life insurance industry remains steady amidst challenging business environment
Kuala Lumpur, 17 August 2015 – The life insurance industry remains steady in the first half of 2015 amidst challenging business environment. New business weighted premiums (100% of regular premiums plus 10% of single premiums) declined marginally by 0.7% to RM2,024 million as compared with RM2,040 million achieved in the same period last year.
In terms of insurance protection, gross sum assured for all new individual policies recorded an increase of 8.1% to RM45.2 billion compared with RM41.8 billion achieved in the same period a year ago. This increase in protection is contributed by Investment-linked plans which experienced a growth of 9.6% and traditional plans with a growth of 3.5%.
Toi See Jong, the President of Life Insurance Association of Malaysia (LIAM) attributed the growth in insurance coverage to the increase in consumer awareness. “Despite challenging business environment in the first half of 2015, the life insurance industry has seen an increase in the take up rate of insurance protection. Malaysia has a young population compared to a number of countries in this region. The young population coupled with a low insurance penetration rate makes our country one of the most attractive insurance markets in the region.”
The protection gap or underinsurance gap remains huge in Malaysia according to a study commissioned by LIAM and undertaken by Universiti Kebangsaan Malaysia. The study found that the average protection gap for families whose primary wage earner do not have life insurance protection is RM723, 000 per family. The amount is the estimated sum needed for the family of the wage earner to sustain their current lifestyle for at least 5 years on the demise of the wage earner.
In an effort to promote an inclusive society, products specially catered for Persons with Disabilities (or Orang Kurang Upaya) have recently been introduced. In addition, an affordable online insurance product offering premium as low as RM9.85 per month for insurance value of RM100,000 has been made available. Targeting the lower income market, this product simplifies underwriting process within 10 minutes.
According to the other statistics released by LIAM for first half 2015, the life insurance industry paid out marginally higher claims this year compared with the year before. The industry as a whole saw a 1.3% increase in benefit payments in the first half of this year compared with the last. Benefit payments due to death, disability, medical, bonuses and others amounted to RM4.079 billion as compared with RM4.028 billion for the same period last year.
“The increase in benefit payments mainly came from medical claims. Medical inflation rate which has been consistently higher than the overall inflation rate also contributed partly to the increase in the medical claims. With the advent of modern medical technologies, consumers are aware that it is more important than ever that they all have adequate medical insurance coverage as a lot of diseases considered terminal previously are now treatable with early detection,” commented Toi.
Kuala Lumpur, 17 August 2015 – The life insurance industry remains steady in the first half of 2015 amidst challenging business environment. New business weighted premiums (100% of regular premiums plus 10% of single premiums) declined marginally by 0.7% to RM2,024 million as compared with RM2,040 million achieved in the same period last year.
In terms of insurance protection, gross sum assured for all new individual policies recorded an increase of 8.1% to RM45.2 billion compared with RM41.8 billion achieved in the same period a year ago. This increase in protection is contributed by Investment-linked plans which experienced a growth of 9.6% and traditional plans with a growth of 3.5%.
Toi See Jong, the President of Life Insurance Association of Malaysia (LIAM) attributed the growth in insurance coverage to the increase in consumer awareness. “Despite challenging business environment in the first half of 2015, the life insurance industry has seen an increase in the take up rate of insurance protection. Malaysia has a young population compared to a number of countries in this region. The young population coupled with a low insurance penetration rate makes our country one of the most attractive insurance markets in the region.”
The protection gap or underinsurance gap remains huge in Malaysia according to a study commissioned by LIAM and undertaken by Universiti Kebangsaan Malaysia. The study found that the average protection gap for families whose primary wage earner do not have life insurance protection is RM723, 000 per family. The amount is the estimated sum needed for the family of the wage earner to sustain their current lifestyle for at least 5 years on the demise of the wage earner.
In an effort to promote an inclusive society, products specially catered for Persons with Disabilities (or Orang Kurang Upaya) have recently been introduced. In addition, an affordable online insurance product offering premium as low as RM9.85 per month for insurance value of RM100,000 has been made available. Targeting the lower income market, this product simplifies underwriting process within 10 minutes.
According to the other statistics released by LIAM for first half 2015, the life insurance industry paid out marginally higher claims this year compared with the year before. The industry as a whole saw a 1.3% increase in benefit payments in the first half of this year compared with the last. Benefit payments due to death, disability, medical, bonuses and others amounted to RM4.079 billion as compared with RM4.028 billion for the same period last year.
“The increase in benefit payments mainly came from medical claims. Medical inflation rate which has been consistently higher than the overall inflation rate also contributed partly to the increase in the medical claims. With the advent of modern medical technologies, consumers are aware that it is more important than ever that they all have adequate medical insurance coverage as a lot of diseases considered terminal previously are now treatable with early detection,” commented Toi.
