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KUALA LUMPUR, Dec 8 — Malaysia’s insurance industry had a lacklustre year if not for the Perlindungan Tenang Voucher (PTV) programme saving the grace and helping to drive both general and life insurance companies.

The PTV programme was introduced to provide better social protection for the B40 group, whereby, both general and life insurance companies were able to partner with organisations or businesses to serve the low-income group.

From 2021, the PTV programme was extended to December 2022 with the voucher value increased to RM75 from RM50.

The Life Insurance Association of Malaysia (LIAM) said it believed that extending the PTV initiative would benefit the majority of B40 households as well as the nation’s aspiration of increasing insurance ownership amongst the population and accomplish the industry’s financial inclusion agenda.

“The availability of Perlindungan Tenang products is important in providing immediate financial relief in the event of misfortune. Family members can have peace of mind knowing that financial relief is available in an easy and timely manner,” LIAM chief executive officer Mark O’Dell said.

A functional platform to boost the insurance penetration rate

LIAM said the i-Lindung social protection initiative is also a good initiative by the government together with the Employees Provident Fund (EPF) as it augured well for the promotion of financial inclusion and encouraged more Malaysians to take up insurance.

i-Lindung is a self-service platform through EPF’s i-Akaun (Member) which can be used to purchase protection products under the Member Protection Plan (MPP).

It said the i-Lindung social protection initiative would not only pave the way in increasing the insurance penetration rate but also extend the insurance safety net to as many Malaysians as possible which is in line with the national agenda.

The current insurance and takaful penetration rate in the country stands at about 56.1 per cent compared with 100 per cent in developed countries.

Overall performance of general insurance shows growth in H1

The general insurance industry registered an increase in gross direct premiums of 10.3 per cent to RM9.8 billion in the first six months of 2022 (H1 2022) compared with the same period last year.

The General Insurance Association of Malaysia (PIAM) said underwriting profit, however, contracted by 21.2 per cent to RM 810 million, largely due to losses in the motor, medical and health Insurance business.

In relation to premium, motor remained the largest business line at 43 per cent followed by fire (29 per cent) and miscellaneous (14 per cent).

Personal accident premium saw a significant growth of 44 per cent year-on-year (y-o-y), largely due to the PTV programme while premiums from the fire insurance business rose by five per cent to RM2 billion in H1 2022 versus a year ago with underwriting profit improved by 23 per cent per cent y-o-y.

PIAM said the H1 2022 premium for marine aviation and transit insurance also notched up seven per cent to RM900 million but medical and health insurance contracted six per cent to RM550 million compared to H1 2021.

The industry paid out RM15.2 million in claims daily in 2021 with motors representing a significant majority of the total at RM12 million per day.

“Owing to an increase in consumer awareness of the risks and damage to property and assets from flash floods in recent memory, motor (comprehensive) flood take-up rate more than doubled to 12 per cent in H1 2022 compared to 5 per cent for the full year 2021,” it said.

The right time to advocate digital innovation

Moving forward, it is a time for insurance operators to promote the industry’s fintech and digital innovation.

The Malaysian Takaful Association (MTA) had built roadmaps to implement the financial sector blueprint for the takaful industry as well as the value-based intermediation for takaful (VBIT) and to roll out the programmes under the initiatives would require effective communication.

Chief executive officer Mohd Radzuan Mohamed reportedly said that in total, the association has 60 initiatives under the two roadmaps up until 2025 and therefore, effective collaboration and communication is a must to help them coordinate at the association level.

Amid lingering Covid-19 uncertainties, the operators should focus more on expanding their customer engagement capabilities via artificial intelligence (AI). — Bernama