KUALA LUMPUR: The insurance policies in Malaysia must be made more affordable in order to boost the country’s insurance penetration rate which is far below its 2020 target, according to Finance Minister Lim Guan Eng.
Speaking to reporters after the opening ceremony of Menara Prudential in Tun Razak Exchange (TRX) yesterday, Lim urged insurers in Malaysia to develop insurance protection plans for the under-served and under-protected who are largely from the low-income group or the B40.
Lim hinted that the 75% national insurance penetration rate target by 2020 is unlikely to be achieved.
He said that almost half of all Malaysians are uninsured currently, with a life insurance penetration rate of 55% that has been stagnant for years.
Lim also quoted Bank Negara’s finding that less than 41% of Malaysians own at least one individual or group life insurance policy or family takaful.
“The 75% target for insurance penetration rate was not set by the present government.
“We will see the outcome next year. After that, we will conduct assessments in terms of penetration, shortfalls and what needs to be done. I think it’s a question of pricing and affordability.“We will revise the national target for insurance penetration rate after seeing the outcome in 2020, ” said Lim.
Earlier in his keynote address, Lim said that the government will seek fiscal space in the upcoming Budget 2020 to boost Malaysia’s economic growth.
“Expansionary measures may be necessary to provide some fiscal contingency, amid an uncertain global economic environment following the unresolved trade dispute, ” he said.
Lim again confirmed that Budget 2020 will not entail any new tax measures on the Malaysian corporate sector and investment community.
Yesterday, Prudential launched its new Malaysia head office at TRX - Malaysia’s first dedicated international financial district.
For perspective, Menara Prudential is the first building to be completed and occupied in TRX. With the opening of the 27-storey Menara Prudential, all five of Prudential’s businesses namely Prudential Assurance Malaysia Bhd, Prudential BSN Takaful Bhd, Eastspring Investments Bhd, Eastal-Wara’ Investments Bhd and Prudential Services Asia will be housed under one roof.
The tower will also have a walk-in retail branch for Prudential’s customers.
The RM500mil Menara Prudential, in which Prudential is the main tenant, was developed by IJM Corp Bhd.
Malaysia is the longest operating market for Prudential in Asia, where the company has operated for more than 95 years.