Life insurers see dip in new business premiums

KUALA LUMPUR: New business weighted premiums declined by 0.7% to RM2.024bil during the first half of the year, from RM2.040bil during the same period last year, according to life insurers.

Life Insurance Association of Malaysia (LIAM) said the industry had remained steady despite a challenging business environment and attributed this to rising consumer awareness.

LIAM said the gross sum assured for all new individual policies rose 8.1% to RM45.2bil from RM41.8bil in the previous corresponding period. 

This increase in protection, it said, was contributed by investment-linked plans, which saw a 9.6% growth, and traditional plans, with 3.5% growth.

“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,” said LIAM president Toi See Jong.

The life insurance industry also paid out marginally higher claims, up 1.3% in the first half from a year ago. 

Benefit payments due to death, disability, medical, bonuses and others amounted to RM4.079bil, compared with RM4.028bil last year.

“The increase in benefit payments mainly came from medical claims. The medical inflation rate which has been consistently higher than the overall inflation rate also contributed partly to the increase in the medical claims,” said Toi.

He said the protection gap or underinsurance gap remained huge in Malaysia, according to a study commissioned by Liam and undertaken by Universiti Kebangsaan Malaysia.

The study had found that the average protection gap for families, whose primary wage earners did not have life insurance protection was RM723,000 per family. 

The amount was the estimated sum needed for the family of the wage earner to sustain their current lifestyles for at least five years following the demise of the wage earner.