Malaysia's life insurance sector registered a 14.19% growth in new business premiums to RM11.8bn in 2019, compared to RM10.3bn registered in 2018.
The Life Insurance Association of Malaysia (LIAM), which represents 14 life insurance companies and two life reinsurance companies, said the increase was driven by strong growth in the traditional business segment, which grew 30.12%, as well as the investment-linked (up 11.05%) and group business (up 10.79%) segments.
"The healthy performance of the life insurance industry reflects the increase in awareness among consumers on the importance of life insurance protection," LIAM said in a statement.
The healthy performance of the life insurance industry reflects the increase in awareness among consumers on the importance of life insurance protection"
In terms of policy sales, 1,315,233 policies were sold in 2019, up 6.22% from the 1,238,249 policies sold in 2018. Investment-linked policies comprised more than half of sales in 2019, with 780,467 policies.
LIAM president Loh Guat Lan said the average sum assured for the individual policy category (excluding group insurance) reached RM130,000 per policyholder.
However, he said this level of protection is not adequate as 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."
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.
The sector is taking proactive steps in providing additional relief measures for policyholders affected by the economic slowdown due to the Covid-19 pandemic.