The Malaysia life insurance market is set for a steady growth as a new study forecast gross written premiums (GWP) of US$15.9 billion in 2027, for a compound annual growth rate (CAGR) of 5.2%. By the end of 2023, the sector is expected to post $13.1 billion in GWP.
Conducted by GlobalData, the study estimated a growth of 2.4% this year coming from the uptick in awareness regarding health and financial planning as well as low-cost term life and endowment insurance products. Favourable regulatory developments are also key to the growth of the sector.
In a report from the New Straits Times, GlobalData insurance analyst Manogna Vangari said that the country’s insurance market fell to 1.2% growth in 2022 following a strong 9.3% showing in 2021.
"The reopening of the economy after the pandemic and a lower disposable income led to a change in consumer preference away from non-essential commodities. These impacted the sales of life insurance policies in 2022,” Vangari said.
Driven by investment-linked insurance policies (ILPs), endowment leads the life insurance lines in the country and is expected to take a 77.2% slice of the GWP pie this year. It’s also predicted to grow at a CAGR of 5.5% in the period from 2023 to 2027.
Following endowment is term life insurance, with a 4.6% share of GWP in 2023. Vangari said that insurers in Malaysia have been focused on providing low-cost products due to a shift in customer spending preferences following the global pandemic and high inflation. These developments also led to government-backed low-cost products such as Perlindungan Tenang, which are aimed as a social security tool for Malaysians.
"These plans were initially launched in 2021, with premium rates starting as low as RM2.87 per month. However, considering their demand, this has been extended to 2023 for recipients of the Malaysian family assistance program 'Bantuan Keluarga Malaysia,” Vangari said.
Elsewhere in Malaysia, Starr Insurance recently launched its branch in the country under Starr Labuan.
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