‘Malaysia’s insurance sector among few to avoid contraction this year’
UALA LUMPUR: Malaysia should be one of the few markets in Asia to avoid contraction in its insurance industry this year, albeit by a hair’s breadth, said Allianz.
The German insurance giant said premiums were expected to grow by only 0.9 per cent, with the life insurance segment growing 1.8 per cent, but the propertycasualty (P&C) segment posting a 1.3 per cent contraction.
However, the slump would be followed by a swift recovery next year with the market growing by 7.0 per cent, said Allianz in its latest Global Insurance Report.
Over the decade up to 2030, Malaysia is expected to clock growth of 5.8 per cent annually.
“Malaysia’s insurance market is one of the most developed in the region. Premiums per capita stood at €363 last year, with penetration at 3.5 per cent,” it added.
The domestic insurance market grew 4.9 per cent last year, more or less in line with the previous years.
Life insurance premiums, accounting for 70 per cent of the premium pool (without health), rose 7.4 per cent, while P&C premiums dipped 0.5 per cent.
Overall, the global insurance industry entered this year in good shape before being hit by the Covid-19 pandemic.
Allianz said premiums had increased 4.4 per cent last year, the strongest growth in four years.
The increase was driven by the life segment, where growth increased sharply over 2018 to 4.4 per cent as China overcame its temporary, regulatory-induced setback and mature markets finally came to grips with low interest rates.
The P&C insurance clocked almost the same rate of growth (4.3 per cent), but down from 5.4 per cent in 2018.
Thus, for the first time since 2015, life insurance outgrew the P&C segment, albeit by a very thin margin.
Global premium income totalled €3.91 billion last year (life: €2.4 billion, P&C: €1.51 billion).
It expects the sudden stop of economic activity around the globe due to the pandemic to batter insurance demand.
Global premium income is expected to shrink 3.8 per cent this year, with life insurance probably hit more than P&C business, with growth rates of -4.4 and -2.9 per cent, respectively.
“Compared to the pre-Covid-19 growth trend, the pandemic will shave around €360 billion from the global premium pool,” Allianz added.