The insurance and takaful industry in Malaysia is improving given the ample room for growth, supported by proactive measures to innovate the industry taken by Bank Negara Malaysia (BNM), says MIDF Amanah Investment Bank’s research arm, MIDF Research.
BNM measures such as the introduction of Perlindungan Tenang, an initiative to introduce a range of insurance and takaful products to meet the needs of underserved Malaysians, particularly the bottom 40% household segment.
The Perlindungan Tenang, the implementation of the balanced scorecard framework and other measures, are viewed positively as catalysts to stimulate higher take up rate of insurance policies, says MIDF Research.
It noted that in 2017, the insurance and takaful industry maintained its positive momentum with an overall growth of 3.5% y-o-y compared with 4.4% y-o-y in 2016, supported by growing demand for protection products.
“We see life insurance and family takaful combined grew at a decent rate of 5.8% y-o-y in 2017 in terms of new premium and contribution.
“We noted that the product type composition of both life insurance and family takaful remained broadly unchanged, a trend seen over the last five years. The product composition was mainly composed of whole-life endowment, mortgage-related term insurance and takaful products, which made up 64.8% of total new premiums or contribution.
“Looking at the trajectory in 2018, we believe the numbers of policies sold will trend higher with more participation from insurers and takaful providers coupled with higher public awareness campaign on Perlindungan Tenang,” the research unit said.
MIDF Research also notes that growth in the general insurance and takaful industry was almost flat in 2017. A