New business total premiums for Malaysia’s life insurance industry rose by 14.19% to MYR11.8 billion (US$2.7 billion) in 2019, compared with MYR10.3 billion in 2018.
Meanwhile, traditional business, investment-linked, and group business recorded strong growth at 30.12%, 11.05% and 10.79% respectively, according to a report by the Life Insurance Association of Malaysia (LIAM).
The association credited the healthy performance of the life insurance industry to the improved awareness among consumers on the importance of life insurance protection.
In terms of policy sales, 1,315,233 policies were sold in 2019, up 6.22% from the 1,238,249 policies sold in 2018. Investment-linked policies comprised more than half of sales in 2019, with 780,467 policies.
“The average sum assured for individual policy category (excluding group insurance) reached MYR130,000 per policyholder. This means that each policyholder will have an average life insurance protection of MYR130,000 to take care of their family in the event of a loss of the breadwinner,” said Loh Guat Lian, president of LIAM.
“However, this level of protection is still not adequate and there is a wide protection gap in terms of insurance coverage needed. Based on a study conducted by Universiti Kebangsaan Malaysia and LIAM in 2013, it is estimated that a family of five would need at least MYR550,000 to meet their living expenses over the next 5 years, in the event of a loss of the breadwinner.”
For its 2020 outlook, LIAM said that it expects high single-digit growth. This is due to the uncertainties faced by the global and local economies, partly due to the COVID-19 outbreak, counter-balanced by the strong resilience of life insurance industry and the low insurance penetration rate in Malaysia.
