Life Insurance Malaysia

Malaysia's insurance industry remains sound with the capital adequacy ratio (CAR) standing at 234.9 per cent from January to July 2016. The CAR measures the adequacy of the capital available in the insurance and shareholders' funds of the insurer to support the total capital required.

Malaysia's life insurance sector saw a 5.9 per cent, year-on-year (y-o-y) growth to RM5.5 billion in new business premiums in the first seven months of the year, said the Economic Report 2016/2017 released by the Finance Ministry in conjunction with the 2017 Budget announced by Prime Minister Datuk Seri Najib Tun Razak here today.

"This was largely supported by growth of non-participating life policies and annuities," it said. However, it said in the same period, new business premiums for investment-linked policies declined 5.1 per cent, y-o-y, due to heightened domestic financial market volatility since 2015.

"At the same time, the market penetration rate of life insurance stood at 40.1 per cent for the same period compared with 40.8 per cent in the corresponding period a year ago," it said.

On the general insurance sector, the report said the gross direct premiums increased 0.8 per cent y-o-y to RM10.7 billion in the January-July 2016 period on account of higher new businesses in the fire segment.

"However, growth in gross direct premiums for the motor segment was flat at 0.3 per cent, y-o-y, reflecting lower sales for passenger and commercial vehicles," it said. The also report said the takaful industry remained strong for the same period as the assets takaful funds grew 6.4 per cent, y-o-y, to RM26.3 billion.

"The growth was mainly supported by a significant holding of corporate sukuk valued at RM14.5 billion, which accounted for 55.1 per cent of the total takaful funds' assets," it said. It said from January to July 2016, family takaful new business recorded higher gross contributions of 7.4 per cent amounting to RM2.3 billion, up from RM2.1 billon in the same period last year.

"For the same period, general takaful business also expanded further, with gross direct contributions of RM1.42 billion, up from RM1.40 billion previously," it added.