Life Insurance Industry Growing Despite Economic Slowdown
KUALA LUMPUR, June 22 (Bernama) — The life insurance industry is still growing despite the discouraging economic condition, Life Insurance Association of Malaysia president Adnan Zain said.
“The traditional life insurance business is showing a good development.
“People are still buying insurance, which shows the knowledge, awareness and recognition of the importance in terms of protection and saving,” he told reporters at the 17th LOMA/LIMRA Strategic Issues Conference here today.
The conference, themed “The New Global Economy: Resilience in Challenging Times”, is jointly organised with the Life Insurance Association of Malaysia.
It aims to serve as a platform for captains of the financial services industries operating in Asia to discuss the latest movements in the industry.
According to Adnan, medical insurance, another growth segment, was shaping up well due to the growing population as well as the understanding of the needs of the people to protect themselves.
“Medical cost is also increasing. This is where people become more cautious of the good of insurance to provide them a good position to ensure they would be able to provide for themselves and family thought insurance coverage,” he said.
He said for life and medical insurance segments, people were still looking at saving as one key area to ensure that they would be able to provide themselves for the future and products such as endowment came in very well.
Adnan said the traditional convention products were much better under this present scenario and the investment-linked segment was slowing down.
He said the investment-linked segment, however, would see good positive development in growth with the measures taken by authorities in ensuring the stability of the economy.
The life insurance industry, Adnan said, was set to see growth moving forward as the penetration rate was still low at 40 percent.
“It is likely to register a single-digit growth this year in line with the challenging environment,” he said.
Adnan said activities such as consolidation, merger and acquisition were likely to take place given that regulators had implemented the risk-based capital (RBC) framework.
The RBC framework aims to create a strong risk management culture and boost public confidence in the insurance industry, which is currently lacking.
Meanwhile, LOMA/LIMRA’s president/chief executive officer, Robert A. Kerzner, said Asia was the new market for opportunities due to its large population and with the market that was still not matured.
“There is a need for our products because the new middle market has more assets and their economies are growing at a faster pace, so there is a need for all the products that life insurance companies have,” he said.
Kerzner said that global players from Europe, Canda and the US would focus more on some of the Asia countries in order to expand their footprint.
On the insurance industry in Asia, Kerzner said the picture was optimistic.
LOMA is an international association through which more than 1,200 insurance and financial services companies from over 80 countries are engaged in research and educational activities to improve company operations.
LIMRA is an association that provides research, consulting, and other services to insurance and financial services companies, worldwide.