KUALA LUMPUR: The Malaysian insurance industry saw a growth of 4.9% despite the Covid-19 pandemic last year.
The country bucked the global trend for 2020 where global premiums income fell by 2.1%, according to the Global Insurance Report by Allianz.
“This strong development is entirely attributable to the life business, which accounts for 70% of premium income – and increased by a whopping 7.6%, more or less in line with pre-crisis growth levels, ” Allianz said in a statement.
Malaysia is one of the few markets worldwide that grew in 2020, the insurer noted.
However, premiums in the property and casualty insurance (P&C) segment declined by 1% as it was weak even before Covid-19 hit the economy, it said.
“A strong recovery of 8.8% is expected in 2021, mainly driven by the life segment (11.0%) while P&C returns to a more modest growth of 3.6%. Over the next decade, Malaysia is expected to achieve brisk growth of 7.5% per year, with the growth gap between life (8.0%) and P&C (6.1%) about to narrow, ” Allianz’s report said.
Premiums per capita will rise to almost €700 (RM3,510) at the end of the 2020’s, well above the regional average of €600 (RM3,009), it added.
“The insurance industry proved resilient during the Corona crisis, ” said Ludovic Subran, chief economist at Allianz.
In 2020, global premium income fell by only 2.1%. However, the decline was significantly steeper than in 2009 (-1.1%) in the aftermath of the financial crisis.
Allianz is expecting strong growth for the insurance industry in 2021 with premiums expected to rise by 5.1% globally.
The strong growth, it said, should continue in subsequent years, driven by the increased focus on sustainability and the further rise of the emerging markets.
Globally, an average growth of over 5% over the next 10 years appears possible.
Subran noted that the crisis has massively increased the demands on stakeholders.
“This affects not least our clients who, fully digitised, are having new expectations on customer engagement. For the industry, this means a profound transformation, away from a pure product logic and toward a holistic service approach that focuses not on financial compensation but on the management and prevention of risks.
“This is the only way the industry can adequately benefit from the increased need for risk protection in the post-Covid world, ” he added.
Meanwhile, the co-author of the report, Michaela Grimm of Allianz expected the Asian region to contribute 50% of global premiums growth with China being responsible for 31% over the next decade.