Malaysia’s life insurance industry is forecast to experience consistent growth over the next five years, with direct written premiums (DWP) projected to rise from MYR69.1 billion (US$15.6 billion) in 2025 to MYR90.0 billion (US$20.4 billion) by 2029. This represents a compound annual growth rate (CAGR) of 6.8%.
Growth projections and market influences
The firm’s insurance database indicates that the sector is expected to grow by 7.5% in 2025, underpinned by ongoing demand for both protection-oriented and savings-linked insurance products.
Several factors are contributing to this upward trajectory. These include an increase in household income levels, greater adoption of digital platforms by insurers, and government-led initiatives designed to broaden financial inclusion. The market’s expansion is attributed to heightened consumer awareness, government initiatives on microinsurance, and the increasing penetration of life insurance products.
Policy ownership among Malaysians has increased from 41.5% in 2019 to 45.5% in 2024, reflecting a shift toward enhanced financial protection.
Microinsurance and regulatory innovation
A notable development in the sector is the government’s focus on microinsurance.
The Perlindungan Tenang framework, which aims to provide affordable insurance solutions, recorded over 530,000 subscriptions for microinsurance and microtakaful products in 2024.
This trend highlights the growing importance of microinsurance in supporting financial security for lower-income groups and enhancing overall market inclusivity.
In addition, regulatory changes are shaping the industry’s digital transformation. On Jan. 2, 2025, Bank Negara Malaysia introduced a framework for digital insurance technology operators (DITOs), as part of its Financial Sector Blueprint 2022–26.
The new guidelines are intended to foster innovation, improve efficiency, and expand access to insurance products. The opening of DITO license applications has attracted significant industry interest, signalling a commitment to addressing protection gaps and increasing market participation.
Shifts in product demand and consumer preferences
Endowment insurance remains the leading product in Malaysia’s life insurance market, forecast to account for 78% of DWP in 2025. This product category appeals to individuals seeking both insurance coverage and savings or investment features.
Investment-linked policies are also gaining traction, with new business premiums rising by 24.8%, suggesting a shift toward more flexible insurance solutions that support wealth accumulation.
Traditional non-linked products are growing at a slower pace, indicating evolving consumer preferences. The introduction of innovative products that combine healthcare protection with flexible coverage options further underscores the importance of aligning offerings with consumer needs. With a projected CAGR of 6.9% for endowment insurance during 2025–29, the market is poised for stable growth, presenting opportunities for insurers to diversify and enhance customer engagement strategies.
Whole life insurance is expected to be the second-largest segment, making up 7% of DWP in 2025. This segment is anticipated to benefit from demographic changes, particularly an aging population seeking long-term financial security and retirement planning.
Other lines, including term life and miscellaneous products, are projected to represent the remaining 15% of DWP.
Sector outlook
The combination of regulatory enhancements, technological advancements, and increased consumer awareness will drive sustained growth in the sector over the next five years. Insurers that prioritize innovation and customer-centric offerings are likely to capture a larger market share, ensuring a resilient and competitive insurance landscape in Malaysia.
Malaysia’s general insurance market maintains upward trends
Meanwhile, Malaysia's general insurance sector is expected to sustain its growth momentum into 2025, despite ongoing economic challenges and rising costs related to healthcare and climate events.
The General Insurance Association of Malaysia (PIAM) reported that gross written premiums (GWP) increased by 6.9% year-over-year to MYR23.1 billion (approximately US$5 billion) in 2024.
PIAM attributed this growth to several factors, including stronger automobile sales, heightened activity in infrastructure development, and continued demand for liability and industrial insurance products. These elements have contributed to the sector’s resilience and adaptability in a changing market environment.
Future outlook
The general insurance market is expected to benefit from ongoing infrastructure projects and sustained demand for commercial and industrial coverage. While economic and environmental uncertainties persist, the sector’s recent performance suggests a capacity for adaptation and continued expansion.
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