The life insurance industry continued to deliver a strong performance in the first three quarters of 2016 with 18.3% growth in new business weighted premium (100% of regular premiums plus 10% of single premiums). New business weighted premium hit RM3.68 billion compared with RM3.11 billion achieved in the same period last year.
Traditional life insurance business which grew 27.0% outpaced investment-linked business which achieved a respectable 12.0% growth rate.
According to the President of Life Insurance Association of Malaysia (LIAM), Mr Toi See Jong, the gross sum assured for all new individual policies combined hit RM82.0 billion compared with RM68.0 billion achieved in first three quarters of 2015. Investment-linked business grew faster in terms of gross sum assured compared with traditional life insurance with growth rates of 24.7% and 7.2% respectively.
“It is heartening to note that the number of new individual policies issued in the first three quarters hit above the 1 million mark, reaching 1,004,808, at a growth rate of 2.1% compared with the same period last year. The growth mainly came from the regular premium traditional policies,” Toi added.
For the first three quarters of 2016, the life insurance industry paid out higher claims compared with the same period of 2015.
“The industry as a whole saw a 7.7% increase in benefit payments for death, disability, medical, bonuses and others amounted to RM7.11 billion as compared with RM6.61 billion for the same period last year.
The increase in benefit payments came from all types of claims except disability claims. The increase in insurance payments was within expectations and in line with the growth in business. The industry also paid out RM2.65 billion in bonuses, due to surpluses in the life funds and as a payback to policyholders,” Toi said.
On the new business mix, despite the strong growth in traditional life business, investment-linked business continues to be dominant over traditional life business. Overall investment-linked business contributed 54.9% of the new business weighted premiums with the remaining 45.1% made up of traditional life insurance business.
The strong performance of the life insurance industry augurs well for the industry as it currently undergoing a transformation process following the implementation of the LIFE Insurance and Family Takaful Framework which came into force on 23 November 2015.
Among the initiatives introduced by the industry for the rakyat include:
1. Introduction of Service Guide for customers to expect the level of service provided by life insurance agents. These include assisting policyholders in choosing the right insurance plan, explain the product features, assist in policy application, explain the policy terms and conditions, continuous policy servicing and assist in making a claim.
2. Public Enquiry Facility via SMS and online for the public to ascertain whether the consumers are dealing with intermediaries who are registered with LIAM as authorized agents.
3. Introduction of a Customer Portal to provide policyholders with easy access on products, policy details, forms, documents and other real time information
In tandem with the industry’s continued engagement with the youth community and as part of the industry’s contribution towards the country’s human capital development, LIAM recently rolled out its first batch of interns under the LIAM Structured Internship Programme (LIAM SIP), a collaboration with the Ministry of Higher Education.
Aimed at attracting young talents to join the life insurance industry as a career of choice, the LIAM SIP also provides the opportunity for young undergraduates/graduates to learn about the industry and educate them on the importance of financial education and life protection.
“By understanding the industry and our vision, it is hoped that the youths would be able to help promote to other youths on the importance of life protection and help fulfill the Government’s aspiration of insuring 75% of the population by 2020 and reducing the protection gap among Malaysians,” Toi concluded.