Malaysian Rising Debt Trap

Malaysian households owed a combined RM54.9 billion in credit card and buy now, pay later (BNPL) debt as of end-September 2025. 

As of Sept 30, more than 90% of the debt was credit card related. Lim said credit card debt stood at RM50.7 billion, with RM551.8 million (1.1%) overdue. Online spending continues to drive credit card use.

BNPL loans in Malaysia stood at RM4.2 billion across seven million accounts, with RM147.7 million, or 3.5% overdue from 185,465 users. The government is introducing policies to promote responsible lending and prevent borrowers from taking on excessive debt, protecting both household finances and national stability.

A key measure is the Consumer Credit Act 2025 (CCA), expected to take effect by year-end, which will regulate BNPL providers, especially for e-commerce credit. Under the CCA, BNPL and other non-bank credit providers must follow responsible lending rules: assess creditworthiness and affordability, ensure fair contracts and transparent fees, and adopt ethical debt collection practices.

While BNPL offers convenient payment options, consumers should evaluate their finances before borrowing and improve financial literacy to avoid debt traps.

Insurance Premium Gigged For E-hailing

Bank Negara has stepped in to address concerns over steep e-hailing insurance premium hikes raised by drivers. The central bank said it was exploring potential solutions together with the insurance industry and key stakeholders to make e-hailing insurance more accessible, affordable, and sustainable.

Bank Negara said this when asked for its response to an appeal by Persatuan Penghantar P-Hailing Malaysia (Penghantar), which urged the central bank to reassess insurance premium pricing practices for e-hailing drivers.

E-hailing insurance was introduced in Malaysia in 2017 as an add-on to a private car comprehensive policy to include the use of a personal car for e-hailing services. It provides additional coverage for passengers and personal accident coverage for drivers.

It is estimated that there are more than 100,000 e-hailing drivers in Malaysia.

Bank Negara said it was working closely with key stakeholders, including the Transport Ministry, Land Public Transport Agency (APAD), Road Transport Depart­ment (JPJ), and general insurance and takaful operators (GITOs) to address e-hailing issues and the broader ecosystem challenges.

Areas being studied include improving road safety, encouraging telematics adoption, enhancing data sharing, and reducing accident frequency.


The central bank said insurance premiums for e-hailing vehicles look at several market realities, such as significantly longer driving duration and mileage compared to private cars.
Rising repair and labour costs have also put pressure on the wider motor insurance segment.

rThe central bank said it has expanded engagements with various e-hailing associations to build greater understanding and awareness of e-hailing insurance, as well as to promote safer driving behaviours.

Meanwhile, the General Insurance Association of Malaysia (PIAM) and its member companies said that they fully support Bank Negara-led initiatives and collaborative efforts to ensure that e-hailing insurance remains accessible, sustainable, and competitively priced.

The association emphasized that it does not set or influence pricing decisions, noting that premiums are determined by individual risk-pricing models.

Allianz Outsourced Call Centres to AI

German insurance group Allianz plans to cut up to 1,800 jobs in its travel insurance division, mainly in call centres, as artificial intelligence increasingly replaces manual processes, a source familiar with the plans told Reuters on Wednesday.

Between 1,500 and 1,800 jobs are set to be eliminated at Allianz Partners over the next 12 to 18 months. Allianz Partners employs 22,600 people, roughly 14,000 of whom handle customer inquiries and claims by phone.

Malaysian Financial Bomoh Guideline

Their videos promise financial freedom in minutes, their advice often shared more widely than that of licensed experts and, in some cases, heavily influences how Malaysians manage their money.

These financial influencers or “finfluencers” — online personalities who turn complex financial topics into trending reels — have long dispensed money tips, investment opinions and “wealth hacks” across social media without the guardrails that govern licensed professionals, until now.

In response to the growing presence of financial influencers and the widespread use of technology, a new guideline governing governing advertisements for capital market products and related services took effect on November 1.

First issued by the Securities Commission Malaysia (SC) in 2020, the revised guideline is meant to level the playing field — ensuring that finfluencers who share investment advice are held to the same standards as those licensed under securities laws.

Malaysian Financial Planning Council (MFPC) International Development Committee chairman Anuar Shuib said many so-called financial “gurus” had been sharing potentially unreliable and unsubstantiated information with consumers before the guideline came into force.

Under the guideline, finfluencers are regarded as voluntary advertisers and are prohibited from promoting capital market products and related services, including financial planning, unless they are licensed by the SC.

Failure to obtain a licence or registration from the SC is a punishable offence under the law and one can be fined up to RM10 million or jailed for up to 10 years or both.

While consumers remain free to choose the content they wish to follow, Anuar stressed that it is essential to verify whether a finfluencer is authorised by the SC before acting on any personal finance advice.

The guideline clarifies that it does not cover the dissemination of factual information about a capital market product for educational purposes, as long as the information is not intended, and is unlikely, to influence anyone to act on or take a position in relation to that product.

Among others, the guideline also requires an advertisement to be presented in a manner that allows consumers to immediately identify it as an advertisement.

Malaysia Insurers Interfere With Treatment

The Ministry of Finance (MOF) today reiterated in Parliament that insurers, takaful operators (ITOs), and third-party administrators (TPAs) cannot determine patient care, amid ongoing complaints of insurer interference in clinical decisions.

ITOs and TPAs are only responsible for verifying whether a claimed treatment falls within policy coverage, based on medical necessity and standard treatment protocols. All decisions on patient care remain solely with doctors. Insurers and takaful operators, as well as TPAs, have no power to determine patient care. 

Premium Hike - Many insurers were found to have violated Bank Negara Malaysia’s (BNM) interim measures on medical and health insurance (MHIT) premium adjustments, the types of non-compliance involved, and the enforcement taken.

MOF’s response mirrored BNM where payers only assess whether treatment is covered and do not influence clinical decisions. However, several medical practioners consistently describe insurer and TPA approval controls as affecting how care is provided in private hospitals.

Specialists reported insurers denying inpatient admission by reclassifying cases as outpatient or daycare treatment. They also reported rejection of general anaesthesia for surgical procedures and refusal to cover standard therapies, including both innovator and generic medicines.

Doctors said these decisions limit the treatment options they can offer patients. Doctors did not claim that insurers directly issue clinical instructions. Instead, they described the control of guarantee letters, claim approvals, and payment authorizations as a form of financial gatekeeping that influences clinical judgement in practice.

The Ministry of Health (MOH) has previously cautioned insurers and TPAs against influencing clinical decision-making. Health director-general warned that interference with doctors’ clinical discretion “may be illegal” under Sections 82 and 83 of the Private Healthcare Facilities and Services Act, which protect clinical autonomy.

Medical associations have also called for regulatory intervention on insurer practices affecting care. Over 90% Of Policyholders Saw Premium Hikes Below 10% In First Year, Says MOF

The interim measures require ITOs to submit all proposed premium adjustments to BNM for approval, and that adjustments which do not meet the interim requirements cannot be implemented. The interim policy aimed for at least 80 per cent of policyholders to face annual premium adjustments of no more than 10 per cent due to medical inflation. Current industry data shows that more than 90 per cent of policyholders experienced premium adjustments of less than 10 per cent in the first year.

Meanwhile, BNM has received 190 complaints from policyholders regarding MHIT premium adjustments, of which 94 per cent (179 complaints) have been resolved by ITOs. Policyholders should first bring disputes to their insurer, and unresolved matters may be escalated to BNMLINK for case-by-case review. The government, BNM, insurers, TPAs, hospitals and medical professionals have reactivated the Grievance Mechanism Committee (GMC) to coordinate operational issues.

Escalating Medical Cost Across Asia

Employers across Asia are bracing for a significant financial hit as the region is forecast to see a 12.5 per cent average medical trend rate in 2026. This widespread increase — the sixth straight year of double-digit trends — has forced many insurers to consider cutting coverage, raising alarms about employee protection and talent retention.

Malaysia’s medical trend rate could go as high as 15 per cent in 2026, almost seven times the country’s projected inflation rate. The medical trend rate is the predicted year-on-year healthcare cost for a given population after factoring in elements like medical inflation and changes in treatment requirements.

The projected 12.5 per cent regional medical trend rate is fuelled by soaring rates in several key markets. Indonesia leads the Southeast Asia forecast at 17.8 per cent, followed by the Philippines (16 per cent). Other markets projected to exceed 10 per cent include Thailand (14.6 per cent), Singapore (14 per cent), Vietnam (11.6 per cent) and Hong Kong (10.5 per cent).

This could be a troubling sign for employee benefits, as 63 per cent of insurers in Asia anticipate reducing coverage in 2026 to manage escalating costs, a sharp jump from 43 per cent who planned cuts in 2025. This trend, as well as a report that 37 per cent of Asia insurers are seeing more members hit lifetime limits, is prompting “risky ad-hoc exceptions” that ultimately shift financial burdens onto employees.

The report, based on a survey of 268 insurers across 67 global markets, points to three primary factors driving up costs in Asia: a higher incidence of conditions (83 per cent), more costly treatments (78 per cent) and rising medical inflation (71 per cent).

The most expensive claims in terms of dollar amount across the region are for cancer, circulatory diseases and respiratory conditions.

In the next three years, insurers cited three key concerns that will continue to pressure healthcare budgets.

High-cost claimants topped concerns for 87 per cent of respondents, followed by inefficiency and waste at 85 per cent and an ageing population (77 per cent).

Despite the rise in health concerns, the report highlighted a significant gap in care: only 31 per cent of insurers in Asia typically cover mental health counselling, an area increasingly critical for employee wellness and productivity.

As people delay retirement, targeted benefits like preventive care such as cancer screenings and routine primary care visits are more essential to help hedge against future high costs, support employee health and ensure long-term retention and productivity.

Malaysia Insurance Updates

Malaysia’s life insurance industry is forecast to experience consistent growth over the next five years, with direct written premiums (DWP) projected to rise from MYR69.1 billion (US$15.6 billion) in 2025 to MYR90.0 billion (US$20.4 billion) by 2029. This represents a compound annual growth rate (CAGR) of 6.8%.

Growth projections and market influences
The firm’s insurance database indicates that the sector is expected to grow by 7.5% in 2025, underpinned by ongoing demand for both protection-oriented and savings-linked insurance products.

Several factors are contributing to this upward trajectory. These include an increase in household income levels, greater adoption of digital platforms by insurers, and government-led initiatives designed to broaden financial inclusion. The market’s expansion is attributed to heightened consumer awareness, government initiatives on microinsurance, and the increasing penetration of life insurance products.

Policy ownership among Malaysians has increased from 41.5% in 2019 to 45.5% in 2024, reflecting a shift toward enhanced financial protection.

Microinsurance and regulatory innovation
A notable development in the sector is the government’s focus on microinsurance. 
The Perlindungan Tenang framework, which aims to provide affordable insurance solutions, recorded over 530,000 subscriptions for microinsurance and microtakaful products in 2024.

This trend highlights the growing importance of microinsurance in supporting financial security for lower-income groups and enhancing overall market inclusivity.

In addition, regulatory changes are shaping the industry’s digital transformation. On Jan. 2, 2025, Bank Negara Malaysia introduced a framework for digital insurance technology operators (DITOs), as part of its Financial Sector Blueprint 2022–26.

The new guidelines are intended to foster innovation, improve efficiency, and expand access to insurance products. The opening of DITO license applications has attracted significant industry interest, signalling a commitment to addressing protection gaps and increasing market participation.

Shifts in product demand and consumer preferences
Endowment insurance remains the leading product in Malaysia’s life insurance market, forecast to account for 78% of DWP in 2025. This product category appeals to individuals seeking both insurance coverage and savings or investment features.

Investment-linked policies are also gaining traction, with new business premiums rising by 24.8%, suggesting a shift toward more flexible insurance solutions that support wealth accumulation.

Traditional non-linked products are growing at a slower pace, indicating evolving consumer preferences. The introduction of innovative products that combine healthcare protection with flexible coverage options further underscores the importance of aligning offerings with consumer needs. With a projected CAGR of 6.9% for endowment insurance during 2025–29, the market is poised for stable growth, presenting opportunities for insurers to diversify and enhance customer engagement strategies. 

Whole life insurance is expected to be the second-largest segment, making up 7% of DWP in 2025. This segment is anticipated to benefit from demographic changes, particularly an aging population seeking long-term financial security and retirement planning.

Other lines, including term life and miscellaneous products, are projected to represent the remaining 15% of DWP.

Sector outlook
The combination of regulatory enhancements, technological advancements, and increased consumer awareness will drive sustained growth in the sector over the next five years. Insurers that prioritize innovation and customer-centric offerings are likely to capture a larger market share, ensuring a resilient and competitive insurance landscape in Malaysia.

Malaysia’s general insurance market maintains upward trends
Meanwhile, Malaysia's general insurance sector is expected to sustain its growth momentum into 2025, despite ongoing economic challenges and rising costs related to healthcare and climate events.

The General Insurance Association of Malaysia (PIAM) reported that gross written premiums (GWP) increased by 6.9% year-over-year to MYR23.1 billion (approximately US$5 billion) in 2024.

PIAM attributed this growth to several factors, including stronger automobile sales, heightened activity in infrastructure development, and continued demand for liability and industrial insurance products. These elements have contributed to the sector’s resilience and adaptability in a changing market environment.

Future outlook
The general insurance market is expected to benefit from ongoing infrastructure projects and sustained demand for commercial and industrial coverage. While economic and environmental uncertainties persist, the sector’s recent performance suggests a capacity for adaptation and continued expansion.