The Malaysian life insurance market, in terms of gross written premiums, is projected to grow at a compound annual growth rate (CAGR) of 4.4% from MYR46.7bn (US$11.6bn) in 2019 to MYR55.4bn (US$13.7bn) in 2023, says GlobalData, a leading data and analytics company.

GlobalData’s report, ‘Malaysia Life Insurance: Key Trends and Opportunities to 2023’, reveals that term insurance, endowment and whole life products account for almost 90% of Malaysia’s life insurance business. Rising working-age population and government and regulatory initiatives towards affordable insurance products are the key factors driving the growth.

Sangharsan Biswas, Insurance Analyst at GlobalData, comments: “As of end-2018, the share of working-age population stood at 66.2%. This offers huge growth potential as 46% of the population still does not own life insurance product.”

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In 2017, the Malaysian government launched affordable insurance scheme, Perlindungan Tenang, aimed at enabling accessibility of life insurance for economically weaker section of the population. Since then, leading insurers such as Allianz introduced micro-insurance products to tap into this segment. Sun Life Malaysia partnered with U Mobile to offer affordable mobile-based life micro-insurance, to cater to U Mobile’s customer base. Similarly, Gibraltar BSN partnered with mobile wallet provider Boost Malaysia to promote mobile-based insurance premium payments. These steps are expected to expand life insurance penetration in the country.

Efforts are also being made by the regulatory authority and industry association to promote insurance awareness. In 2019, a national strategy plan for financial literacy was launched to implement large-scale awareness campaign.

The regulatory authority has also been taking steps towards improving product accessibility. It is now mandatory for life insurers in Malaysia to offer standalone term insurance through their direct distribution channel – either own office or online platform. Due to their more affordable pricing, it is expected to help insurance adoption.

Biswas concludes: “With focus on improving accessibility of insurance in the country, insurers will use technology to expand their reach and also offer affordable products.”