‘Mindset on life insurance policies changing’
KUALA LUMPUR: There is a gradual shift in people’s mindset when it comes to life insurance plans.
Traditional life insurance policies are on the decline while investment-linked policies are seeing an increase in take-up rates, according to Malaysia’s leading comparison website, Ringgit-Plus.
The director of insurance at Jirnexu Sdn Bhd, the parent company of Ringgit-Plus, said consumers are also seeking a shorter payment duration, such as six years for 20 years of coverage.
“On the digital side, we are seeing a growing interest in simple products like term life among Malaysians, potentially from the under-insured segment of the market,” Lucas Ooi told the New
Straits Times recently.
On what is expected in the local insurance industry in the next 10 years, Ooi said new technology would provide alternative data, unlocking innovative ways to insure new risk and distribution channels.
An example is the rise of ridehailing companies Uber and Grab in providing personal accident coverage for their drivers when a customer is “on-trip” using geolocation and telematic data.
“In 10 years, I believe we will see more products being insured by the manufacturer or service providers,” he said.
Ooi also said for years, Bank Negara Malaysia had regulated motor insurance whereby premiums were standardised.
“However, since 2016, Bank Negara has started to liberalise comprehensive motor and third-party fire and theft products.
“It has been a gradual de-tariffication done in several phases with the goal to be fully liberalised in the future.
“This means that premiums will vary depending on factors including age, car type, travelling distance, driving experience and history. This will also slowly influence the way consumers think about motor insurance.”
On gender-based insurance policies and pricing practised in the United States, Ooi said Malaysia is still some time away from risk-pricing based on gender.
“As long as insurers are not discriminating unfairly, I see it as a good sign that low-risk customers should pay less than highrisk customers as long as there is proven data.
“Advancement in technology, whereby deterministic pricing models are adopted, should help build a more accurate pricing model for an insurer to risk-price an individual, whether male or female.”
On how consumers can find suitable insurance plans, Ooi said: “Websites like RinggitPlus.com offer a simple way for consumers to learn more about the different products.”