Despite the challenging economic environment, the life insurance industry is expected to chart new business premiums growth of between 10% and 15% next year.
This is attributed, among others, to the low insurance penetration rate, the Government's various projects and tax incentives. The Life Insurance Association of Malaysia (LIAM) in responding to queries from StarBiz said the association anticipated new business premiums to moderately grow between 14% and 15% next year compared with a low double-digit growth this year.
By class of business, investment-linked business continued to enjoy a very strong growth in 2011, it said, adding that the sale of regular premium investment-linked products grew by 26% to RM752mil in the first half of the year from RM597mil in the corresponding period in 2010.
Meanwhile, for single premium business, there was a 16% growth in investment-linked plans, the association said. Total new business premiums for individual policies last year stood at about RM2.8bil compared with RM2.1bil in 2009.
LIAM also said the industry had taken a breather after strong double-digit growths in 2009 and 2010. “However, we expect the performance of the industry to improve by year-end as companies step up their efforts to achieve their business goals.
“The insurance penetration rate in the country is still low with huge upside potential to be captured. The economy in Malaysia is also expected to perform as projected and this augurs well for the growth of the industry,” LIAM said.
For single premium business, there was a move from traditional plans to investment-linked plans as companies favoured the latter due to challenges in providing minimum-guaranteed returns in traditional products under the low interest environment, it noted.
LIAM said it expected retirement-related products, as well as medical and protection-related products, to perform next year.
As part of its five-year strategic plan, the association added it would continue to drive its consumer education programme and raise awareness of the virtues of having life insurance.
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