The national insurance and takaful penetration rate should grow at least 10 per cent next year in order to reach the national target of 75 per cent coverage by 2020, Life Insurance Association of Malaysia (LIAM) said. If we are going to meet the target, we need to register at a 10 per cent growth of the coverage to 65 per cent from the current's 55 per cent.
Toi expressed confidence that the implementation of the new Life Insurance and Family Takaful Framework (Life Framework) from Jan 1, 2017 would help boost the number of Malaysians insured. The Life Framework is part of efforts to open up and strengthen the existing channels, which include agencies and bank insurers, as well as direct channel and financial advisors.
"Beginning Jan 1, 2017, I think every insurance company ought to have a direct channel to enable customers to purchase life insurance online," he said, adding that initially, the online platform would offer simple protection plans, instead of plans such as investment or saving plans.
The Life Framework is an initiative mooted by Bank Negara Malaysia (BNM), which requires all life insurers or family takaful operators to offer commission-free standalone pure protection products, namely term, critical illness and medical and health insurance/takaful through at least one direct channel, which means an online platform.
The BNM has specified that term products must be available through direct channels from Jan 1, 2017, followed by critical illness and medical and health insurance/takaful products by Jan 1, 2018. Toi said with the opening of the direct channels, coupled with the current 80,000 insurance agents in the country, these efforts would further enhance productivity and professionalism in the industry.
On sales performance, he expected a strong single digit growth this year amid the challenging economic conditions.
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