Malaysia: Non-life market to see more tempered growth this year
Source: Asia Insurance Review | Feb 2016
The non-life sector in Malaysia is projected to grow by 4-5% this year, with personal insurance lines expected to see some challenging times, according to MSIG Insurance (M) CEO, Mr Chua Seck Guan.
The 2016 growth forecast is regarded as lower than usual with Mr Chua telling the Bernama News Agency in an interview: “We used to plan for 6% to 8% growth in a good year but moving forward, we had to change our figures due to the impact of the goods and services tax (GST), weakened currency and the dampened market.”
For 2015, the non-life market is expected to record growth of 3-3.5%, he said. “Going forward into 2016, it would be unlikely that the sector will get 6% to 8% growth.”
The most significant impact on the market last year was from the introduction of GST and the weaker ringgit. Mr Chua said that this year, the GST impact would continue to be felt and is expected to contribute to the rising cost of claims.
“The commercial line remains positive, as there is still growth but it’s the personal line growth that actually slowed down the insurance industry especially in the motor insurance segment,” he said. Consumers, he added, were holding back their decision on big-ticket items such as new cars or new houses.
Meanwhile, the country’s takaful sector is seen to have favourable growth potential, particularly due to encouraging demographics and government support. Wider product innovation and distribution coverage is likely to drive growth too, according to Fitch Ratings. The country has 12 registered takaful operators.