The motor and fire insurance sectors will be restructured with more market-driven pricing, Bank Negara Malaysia (BNM) deputy governor Datuk Muhammad Ibrahim said today. He said this would pave the way for the development of products that are more responsive to consumer and business needs in the two most dominant lines of business in the Malaysian general insurance sector.
Importantly, this development will be critically dependent on insurance and takaful companies building strong internal underwriting and risk pricing practices to ensure the sustainability of the business, particularly in the highly competitive motor insurance segment.
Development is critical to remove the current market distortions that undermine the long-term sustainability of motor insurance. The industry cannot afford to take a short-term view, it must keep its sights on building the foundations for operating in a more diverse and mature market, with stronger value propositions for consumers.
Life insurance and family takaful sector's focus is to increase the penetration level, as measured by the number of policies in force per population, from 56% currently to 75% by 2020 as envisaged in the Economic Transformation Programme.
Product innovation remains key to achieving this target, particularly in the micro-insurance and micro-takaful space which would expand the reach to the underserved segments of society.
Supervisory interventions by BNM, more than RM30 million in premiums were refunded to the affected policyholders due to mis-selling practices in the sale of life insurance products in the past.
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