Business Pandemic increases awareness, reduces affordability for protection – Survey
KUCHING: An Impact of Pandemic on Protection survey commissioned by Zurich Malaysia found that the pandemic has led to the increased awareness of the need to have insurance protection, as observed by 84 per cent of the respondents in Malaysia.
This increased awareness however did not translate into action as 38 per cent of Malaysians still do not have any personal protection.
Affordability is the main reason for not having protection.
Of the 1,201 respondents, 62 per cent said that the pandemic has affected their ability to afford insurance or takaful.
Worryingly, about 23 per cent or almost one in every four Malaysians cannot afford personal protection.
The lack of understanding and information as well as negative perception about the insurance industry are also cited as some of the reasons for not having an insurance or takaful plan.
“As one of only two industry players in Malaysia licensed to provide life insurance, general insurance, family takaful and general takaful, we want to help ensure Malaysians have adequate protection so that they can sustain their way of life,” Zurich Malaysia country head Junior Cho commented.
“This survey is an effort to understand how the pandemic has impacted Malaysians in terms of protection.
“The findings are important for the industry to formulate relevant solutions that address customers’ challenges so that we can build a brighter future together with and for Malaysians.”
The survey was conducted in late September 2021 among Malaysians from all states, with the majority of the respondents in the 18 to 34 age group (64 per cent) – the prime years to start planning for protection for a brighter future.
Key findings of Zurich Malaysia Impact of Pandemic on Protection survey included that 84 per cent said the pandemic has made them more aware of the need to have insurance or takaful.
Almost three quarters of Malaysians (72 per cent) are willing to set aside up to RM200 a month for protection, if they can afford it. Together with the increased awareness, this result is encouraging as it shows Malaysians want to take action to safeguard their future.
The survey also found that the pandemic has affected the affordability for protection (62 per cent).
More than a third of Malaysians (38 per cent) still do not have any personal protection. Despite being more aware of the importance of protection, there is still a considerable number of people without their own personal protection plan. Of this, 60 per cent cannot afford protection (or 23 per cent of the total survey base of 1,201).
Lack of understanding about insurance and takaful is still prevalent in the Malaysian industry. In recent times, there has been concerted effort to make protection more accessible via digital tools and simpler plans.
However, 29 per cent of respondents who do not have insurance or takaful protection attributed it to not having enough information.
Lack of understanding such as thinking they do not need protection (23 per cent) and negative perception of the industry (10 per cent) are other reasons cited.
Other key findings included that Malaysians rely on their employers to provide protection for them. There are Malaysians who do not own any personal protection because their employer already provides some form of protection for them (12 per cent of those who do not have personal protection).
This is a potential cause for concern as their protection is not carried over in the event they lose or switch jobs.
The primary reason Malaysians chose to get personal protection is for their retirement or own use in the future.
Of the 62 per cent who have insurance or takaful protection, 62 per cent of the responses were for financial planning purposes and 54 per cent were to provide for their family.