Malaysia’s insurance mart set to grow 5.8 pct annually

KUALA LUMPUR: Malaysia’s insurance market is set to quickly recover its lost ground due to Covid-19 by clocking growth of 5.8 per cent per annum over the next decade, according to the Allianz Global Insurance Report 2020.

In its latest Global Insurance Report, Allianz Group said Malaysia’s insurance market is one of the most developed in the region, and last year premiums per capita in the country stood at 363 euro (1 euro=RM4.81), well above China or Thailand, with the penetration rate at 3.5 per cent.

“In 2020, Malaysia should be one of the few markets in the region to avoid contraction, albeit by a hair’s breadth, with premiums expected to grow by 0.9 per cent, whereby life insurance is expected to rise 1.8 per cent with the property and casualty (P&C) insurance contracting 1.3 per cent,” it said.

According to the report, Malaysia’s insurance market grew by 4.9 per cent in 2019, more or less in line with previous years.

“Life insurance premiums, which accounted for 70 per cent of the premium pool (without health) increased by a healthy 7.4 per cent, while property-casualty premiums declined slightly by 0.5 per cent,” it said.

In fact, the report said, over the whole decade since the great financial crisis, the life segment outgrew P&C insurance by a wide margin.

On the global front, the report said global premium income is expected to shrink by 3.8 per cent in 2020, with life insurance probably hit more than the P&C business with growth rates of -4.4 per cent and -2.9 per cent respectively, hampered by Covid-19 as the sudden stop of economic activity around the globe would ba er insurance demand.

“Thus, the impact of the Covid-10 pandemic is going to be three times stronger than that of the global financial crisis, when global premium income decreased by one per cent,” it said.

Compared to the pre-Covid19 growth trend, the pandemic will shave around 360 billion euro from the global premium pool (life: 250 billion euro, P&C: EUR 110 billion euro), it said.

The report said 2020 will be challenging for Asia, with premium income expected to decline by 0.7 per cent, life insurance shrinking by 1.8 per cent but P&C still slightly growing by 1.9 per cent.

“Long-term prospects look brighter – the region will return to its ‘normal’ growth and see an average growth rate per annum of 8.1 per cent until 2030,” it said, adding that life and P&C are expected to grow at the same pace.

“This is almost twice the speed of the global market (4.4 per cent),” it said. — Bernama