KUALA LUMPUR: New business total premiums for life insurance rose by 14.19% to RM11.8bil last year compared with RM10.3bil in 2018, according to the Life Insurance Association of Malaysia (LIAM).
Traditional business, investment-linked and group business recorded strong growth at 30.12%, 11.05% and 10.79% respectively.
The Association said the healthy performance of the life insurance industry reflects the increased awareness among consumers on the importance of life insurance protection.
New policies issued in 2019 recorded an increase of 6.22% from 1,238,249 policies in 2018 to 1,315,233 policies (2019). Investment-linked policies continued to be a popular product last year.
LIAM added that new business sum assured increased by 6.91% to RM483.4bil in 2019 compared with RM452.1bil the previous year.
Meanwhile, LIAM president Loh Guat Lan said: "The average sum assured for individual policy category (excluding group insurance) reached RM130,000 per policyholder.
"This means that each policyholder will have an average life insurance protection of RM130,000 to take care of their family in the event of a loss of the breadwinner. 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 RM550,000 to meet their living expenses over the next five years, in the event of a loss of the breadwinner." The total in force premiums rose to 7.39% to reach RM36.9bil from RM34.4il in 2018. The growth was mainly contributed by investment-linked and employee benefit scheme under group business.
The total number of policies registered for the whole industry rose marginally at 0.60% from 12.67 million policies in 2018 to 12.74 million policies in 2019.
The number of lives covered under group policies grew by 1% to almost 10.2 million lives as compared to 10.1 million lives in 2018.
The total sum assured in force increased to over RM1.63 trillion, an increase of 7.83% as compared to RM1.51 trillion in 2018.
The total claims payout increased by 10.19% to RM11.9bil as compared with RM10.8bil in 2018.
“Payment for medical and health insurance is the highest claims category at 41% of all claims paid. This amount has increased 20.82% in 2019, reflecting strong contribution by life insurers towards the medical treatment and healthcare needs of the nation,” said Mark O’Dell, chief executive officer of LIAM.
On the outlook for 2020, given 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, it is expected that the industry will achieve a high single-digit growth, LIAM noted.
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