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Malaysia: Insurers urged to shake off lethargy to promote retirement planning

Source: Asia Insurance Review | Nov 2015

The insurance industry should aggressively raise awareness of the importance of retirement planning and help consumers understand and purchase retirement products, Bank Negara Malaysia (BNM) deputy governor Mr Muhammad Ibrahim, has urged. He said that so far, the response from the industry has been lethargic.
 
   Delivering the keynote address at the 5th Malaysia Insurance Summit in Kuala Lumpur, he said that to encourage retirement savings, the Malaysian Government has provided tax incentives to encourage the purchase of deferred annuity products. “Despite this, response from the insurance industry is lethargic at best. The industry ought to improve product design and delivery channel to benefit from the tax incentives given by the government,” he said.
 
Two major developments
He pointed out that two major developments are taking place in the Malaysian insurance industry: the introduction of the Life Insurance and Family Takaful Framework and liberalisation of fire and motor tariffs. 
 
   “For the life insurance and family takaful sector, the focus remains to increase the penetration level, as measured by the number of policies in force per population, from 56% currently to 75% by 2020. This is envisaged in the Economic Transformation Programme and this target is certainly achievable,” he said.
 
   In the non-life or general insurance space, a more market-driven pricing structure will be introduced for motor and fire insurance, he said, adding: “This will also pave the way for the development of products that can be more responsive to consumer and business needs in the two most dominant lines of business in the Malaysian general insurance sector.”
 
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