Malaysia Life Insurance Updates 2016

Malaysia's life insurance industry continued to grow at a strong pace in terms of gross sums assured for all  new individual policies and also new business weighted premium, says the Life Insurance Association of Malaysia (LIAM).

Its president Toi See Jong said on Wednesday the gross sum assured for all new individual policies rose 25% to RM82bil in January to September 2016 from RM68bil in the previous corresponding period.

“Investment-linked business grew faster in terms of gross sum assured compared with traditional life insurance with growth rates of 24.7% and 7.2% respectively,” he said.

The industry recorded 18.3% growth in new business weighted premium (which comprises 100% of regular premiums plus 10% of single premiums) of RM3.68bil in January to September from RM3.11bil a year ago. 

Malaysians continued to favour traditional life insurance business, which grew 27.0% to RM1.66bil compared with investment-linked business that expanded 12.0% to RM2.02bil.

“The number of new individual policies issued in the first three quarters hit above the one million mark, reaching 1,004,808, at a growth rate of 2.1% compared with the same period last year. The growth mainly came from the regular premium traditional policies,” Toi added. 

He also said in Janaury-September, the life insurance industry paid out higher claims from a year ago. The industry as a whole saw a 7.7% increase in benefit payments for death, disability, medical, bonuses and others amounted to RM7.11bil as compared with RM6.61bil for the same period last year,” he added.
 
“The increase in benefit payments came from all types of claims except disability claims. The increase in insurance payments was within expectations and in line with the growth in business. 

Elaborating on the claims paid out in January-September of 2016, Toi said life insurers paid out RM905.45mil in death benefits. This was an increase of 5.9% or RM50.59mil from RM854.85mil a year ago.

The insurers also paid out RM2.53bil in medical benefit, an increase of 11.8% from the RM2.26bil a year ago. 

Toi said the industry also paid out RM2.65bil in bonuses, due to surpluses in the life funds and as a payback to policyholders,” Toi said. This was an increase of 1.9% from the RM2.59bil a year ago.

In terms of disability benefits, the payout declined 19.8% to RM61.93mil from RM77.20mil a year ago.

Under the others category, the benefits paid out rose 19.1% to RM969.19mil from RM813.71mil.

On the new business mix, despite the strong growth in traditional life business, investment-linked business continued to be dominant over traditional life business. 

Overall investment-linked business contributed 54.9% of the new business weighted premiums with the remaining 45.1% made up of traditional life insurance business.