Country Snapshots Of Malaysia Insurance Industry | An AXCO Insurance Publication

Came across the following snapshot information on Malaysia Insurance industry; although the info was in relation to year 2014 but it is still a very useful one.

Hope you enjoy browsing them.

Market Size

Malaysia’s total insurance market was ranked 34th in 2014. Its life market ranked 27th, its non-life market ranked 32nd and its PA and health market ranked 43rd.

Conventional Market

The breakdown of the total conventional insurance market size in 2014 is shown below.

Life Non-Life Personal Accident & Health Total Market
Premium in MYR mn 31,213.00 14,826.24 2,270.78 48,310.02
% of total market 64.61 30.69 4.70 100.00

Note: due to rounding some totals may not equal the breakdown above.

Source: Axco Global Statistics / Industry Associations and Regulatory Bodies

Takaful Market

The total takaful market size in 2014 was broken down as follows:

Family Takaful General Takaful Personal Accident Total Market
Premium in MYR mn 2,632.27 1,921.22 215.51 4,769.00
% of total market 55.20 40.29 4.52 100.00

Note: due to rounding some totals may not equal the breakdown above.

Source: Axco Global Statistics / Industry Associations and Regulatory Bodies

Penetration/Density

Conventional insurance market premium as a percentage of GDP and expenditure on a per capita basis expressed in USD are shown below for the year 2014; comparisons are made with Hong Kong, Indonesia, Singapore and Thailand.

Life including riders Non-life (P&C) Personal Accident & Healthcare* Total
% per capita % per capita % per capita % per capita
Malaysia 2.82 315.92 1.34 150.06 0.21 22.98 4.37 488.96
Hong Kong 13.11 5,252.90 0.94 376.49 0.49 195.59 14.54 5,824.98
Indonesia** 0.89 30.78 0.42 14.52 0.14 4.91 1.44 50.21
Singapore 5.25 2,930.94 0.81 452.11 0.84 466.07 6.90 3,849.12
Thailand 4.06 225.81 1.48 82.11 0.32 18.07 5.86 325.99

Note: * PA & Healthcare data represents PA & Healthcare business other than life riders, whether written by life, non-life or specialist healthcare insurers.

** Figures are for 2013.

Due to rounding some totals may not equal the breakdown above.

Source: Axco Global Statistics / Industry Associations and Regulatory Bodies

Non-life Structure and Trends

In November 2015 the Malaysian insurance market was made up of 19 general (non-life) insurers and four composite companies. In addition, there were 11 active takaful operators, of which eight transacted non-life business in 2014, seven professional reinsurance companies (five non-life, one composite, one life) and four retakaful companies.

Motor insurance is subject to a statutory minimum tariff, which is regarded as inadequate by the local market. BNM has overseen a gradual revision of the motor tariff since 2012, which allows for steady (and small) increases in the rates. The latest increases to the motor insurance tariff took effect from 23 February 2015.

Fire insurance is also tariff-controlled, although some flexibility is permitted on higher-valued industrial exposures.

The market is moving towards the gradual abolition of these tariffs, the process for which is now expected by local sources to commence from the end of 2016 or in early 2017.

Competition in non-tariff classes is fierce, with insurers reported to be writing business to achieve market share ahead of the relaxing of the fire and motor tariffs, which is expected to result in lower overall premiums.

Life Structure and Trends

Malaysia has a well-established life insurance market, ranking 29th in global terms by market premium in 2013 and is the world’s largest family takaful market as reported by a leading global consultancy.

The market is predominantly an individual one of regular premium life savings contracts with group premium a fraction of the total. It is served by a consolidated group of financially strong conventional and takaful providers, mostly foreign-owned.

Leading product lines reflect those prevalent in Asia, namely wealth accumulation vehicles including traditional whole life and endowment plans and investment-linked (unit-linked) contracts. Single premium business, which is often credit-related, accounted for 15% of life market premium in 2013.

Unlike many its neighbours, life market growth has been in single digits since 2011 with the MYR 27.38bn reported in 2013 little changed over the previous year. Family takaful premium within the total, while much the smaller market at MYR 2.66bn in 2013, is growing faster and is supported from broader government policy seeking to develop Malaysia as a leading global centre for Islamic finance.

Despite restrained growth in recent years, market prospects are considered bright from increasing affluence and an expanding middle class supported by government aims in increasing market penetration.

Last Updated: February 2016
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