Malaysia insurance mart stays largely untapped

Malaysia's insurance market remains largely untapped with the average sum assured being less than RM50,000.

Unlike other Asian countries such as Singapore or Taiwan which have a similar population as Malaysia and a high average sum assured, Malaysians prefer to save, rather than take up up an insurance policy.

According to Great Eastern Life Assurance (M) Bhd's director and chief executive officer Koh Yaw Hui, this is due to a lack of acceptance and awareness by locals on the importance and benefits of an insurance policy.

"Malaysia's insurance industry still has a high growth potential as the average sum assured is low and insufficient for policyholders," he said recently.

He said it is important to raise the level of awareness for protection locally as people do not see the returns.

"Illness or death is something they tend to take lightly and rather save than take up an insurance policy for protection," he explained.

However, Koh indicated that the insured ratio is picking up.

Speaking on competition within the insurance industry in Malaysia, he said it is not an issue.

"The life insurance industry in Malaysia is a blue ocean industry as people are not competing against pricing. There is room for everyone to do well.

"As there isn't much competition, it also provides a bigger platform for Great Eastern to focus and provide better service for our customers, he added.

The company has three distribution channels, the agency force, bancassurance and group insurance. It is confident that its agency force will continue to be the key driver for growth.

"For this year, we are aiming for a 85 per cent contribution from our agency force," Koh explained.

To date, Great Eastern has about 2.3 million policyholders and a network of more than 17,000 agents nationwide.

The company aims to achieve RM940 million in new business premiums for the current financial year compared with RM817 million previously.

Koh said he is optimistic of achieving RM1 billion in new business premiums over the next one to two years.

Great Eastern recently launched its "Smart Early Payout CriticalCare" product, the first plan in Malaysia, that pays in the early stages of a critical illness.

The plan is expected to further boost the company's growth this year. - Bernama