After a slowdown in the first quarter, the life insurance sector is expected to pick up steam for the remaining year underpinned by strong demand for specific products, good economic growth and a relatively low penetration rate of insurance in the country. In retrospect, he added that for 2012, the growth of the industry was underpinned by a solid performance in the investment-linked business, which grew by 20.9%.Life Insurance Association of Malaysia (LIAM) president Vincent Kwo - said despite the overall slowdown in new business, investment-linked policies bucked the trend with an overall positive growth of 4.1% in the first quarter this year.
Overall, he said traditional policies continued to be slightly more preferred by consumers than investment-linked business with a take up ratio of 50.6% to 49.4% in the first quarter compared with 52.9% to 47.1% for traditional and investment-linked policies respectively in the same quarter last year.
Investment-linked products are more flexible and provide better transparency and are increasingly becoming consumers' preferred choice. There was also a huge demand for health and medical insurance due to the escalating cost of healthcare.
Furthermore, he said the penetration of life insurance was still relatively low in Malaysia at 43% while the demand for medical/protection-related products as well as savings-related products remained high.
For 2013, LIAM anticipates new business to expand at a rate of about 10%, taking into consideration the projected economic growth rate of about 5%.Based on the data as at February 2013, new business' total premium in 2012 was RM8.20bil compared wiith RM7.92bil in 2011.
For takaful, he said Malaysian industry players remained confident that they would be able to continue to record more than 20% growth in 2013 in line with prior year's achievements, although on a global scale, contribution growth was at a decelerated rate of about 18% for 2011.
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