The Malaysian life insurance market's gross written premiums is projected to grow at a compound annual growth rate (CAGR) of 4.4% from MYR46.7bn ($11.6bn) in 2019 to MYR55.4bn ($13.7bn) in 2023, says data and analytics company GlobalData in its report, "Malaysia Life Insurance: Key Trends and Opportunities to 2023".
Regulatory initiatives are expected to help in this growth in Malaysia’s life insurance business.
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, said, “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 any life insurance product.”
In 2017, the Malaysian government launched the life insurance scheme, Perlindungan Tenang, aimed at the economically weaker section of the population. Since then, leading insurers such as Allianz have introduced microinsurance 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 increase 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 other steps to improve 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, such plans are expected to help insurance adoption.
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