Aggresive introduction of innovative and affordable range insurance products in the market will boost the insurance sector’s demand for the younger generation, which has seen the lowest average sales volume penetration rate.
Second Finance Minister Datuk Seri Johari Abdul Ghani said more innovative products and channels of distribution are needed to make insurance products more affordable to reduce the financial strain for the average income earners.
“The pricing points for insurance largely depend on what buyers want as the option is on the type of coverage against affordability level,” he told reporters on the sidelines of Syarikat Takaful Malaysia Bhd’s (Takaful Malaysia) online sales portal launch ceremony in Kuala Lumpur last Friday.
“The option is dictated by the individuals and not by companies. It ultimately depends on the consumers’ affordability range,” he said. Johari said as Malaysia further progresses economically, insurance coverage will become a necessity rather than an option.
He said most developed countries have made insurance a mandatory policy across all segments, such as education, medical and even property.
“In this country, we have not reached that level yet, but I think one day as we progress to make cheaper and affordable insurance products…I think everybody will have full insurance coverage.
“I do not think Malaysia will make it mandatory at this moment of time,” Johari said.
Meanwhile Takaful Malaysia group CEO Datuk Seri Mohamed Hassan Kamil said innovation is a relative measure that largely depends on the type of segment in the market.
“Some segment of the market is fully saturated and I believe that segment might be slightly behind in innovation.
“But I think the majority of the population feel that innovation in insurance and takaful products are actually at par with more advanced countries,” he said.
Mohamed Hassan said Malaysian consumers gradually realise the importance of securing adequate insurance packages, particularly medical coverage, due to the year-onyear (YoY) escalating healthcare cost.
He said health insurance is expected to become a highly demand product as people are more conscious in preparing for any untoward incidents.
“Moving forward, the overall insurance industry is expected to continue to perform well driven by more introductions of additional digital distribution capabilities.
“Digitalisation of the sector will allow a wider reach to segments of the market that was previously not protected, or insured.
“I believe this will catapult the industry to greater heights in terms of penetration and premium volume,” Mohamed Hassan added.
Takaful Malaysia has targeted to secure 20% to 25% YoY digital sales growth, following the launch of its “Click for Cover” online portal.
The company has also recently signed collaboration agreements for online distribution with Lembaga Tabung Haji (TH) and Bank Islam Malaysia Bhd to promote Takaful Malaysia’s online products to depositors of these two entities.
The “Click for Cover” portal currently offers motor, personal accident (PA), and medical products. More products such as term life, critical illness and travel PA takaful will be made available later this year.
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