PETALING JAYA: Insurance premiums in Malaysia are expected to grow to more than 6% this year, said Allianz Research.
This is on the back of Malaysia’s insurance market being one of the most developed in the region.
“Malaysia’s premiums per capita stood at 402 in 2018, well above China’s or Thailand’s, and insurance penetration, which are premiums as a percentage of gross domestic product (GDP), was at 4.3% as compared to 3.7% in China,” the research house said.
Last year, insurance premiums in Malaysia grew 4.6%, slightly surpassing 2017’s growth of 4.2%. Life insurance accounted for more than 70% of the premium pool with a growth rate of 6%, which grew faster than property-casualty.
The property-casualty segment returned to a positive growth of 0.7% last year, after the premium decline in 2017.
In Asia excluding Japan, premiums rose by 2.3%, accounting for only 16% of global growth in 2018 as compared to 81% in 2017.
The global growth engines for 2018 were the US (42%) and Japan (11%).
On the other hand, the dismal performance was contributed by life markets in China and South Korea, which shrank in 2018. In China, this was mainly due to a regulatory crackdown on insurance intermediaries selling wealth management products.
Allianz Research economist Michaela Grimm said the stricter oversight in China is more than welcome, signalling the next phase of a more balanced and sustainable development.
“Coupled with the breathtaking technological progress in the market, it is the clear frontrunner in the application of artificial intelligence (AI) or innovative payment solutions -- China is the market to watch.
“It is the best place to learn about the future of our industry. ‘Sold in China’ is the new gold standard in insurance,” said Grimm.
Accordingly, Allianz Research expects a rebound in Asia (ex-Japan) this year, propelling a premium growth of almost 11%.
Going forward, the research house said insurance markets will continue to recover, with global premium growth forecast to reach around 5% in the next decade.
Growth expectations for Asia (ex-Japan) are notably higher - the region should achieve growth of 9.4% per annum over the next decade. In Malaysia, market growth of 8.2% is foreseen (8.6% in life and 7% in property-casualty).
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