Malaysia's life insurance industry recorded an overall dip of 12.6% to MYR5,244m ($1,254m) in new business total premiums in the first half of 2020, compared to the corresponding period in 2019, according to the Life Insurance Association of Malaysia (LIAM).
The decline is attributed mainly to the drop in new business investment-linked policies which contracted by 24.5% in terms of total premiums to MYR1,727m.
During the Movement Control Order (MCO) and Recovery Movement Control Order (RMCO) which started on 18 March 2020, activities of life insurance selling came to a halt as face-to-face selling were restricted for more than three months. Investment-linked insurance plans have more features and require face-to-face interaction by agents to explain these features to customers.
The breakdown of the 1H performance:
During the MCO, the life insurance industry recorded a surge in direct channel sales for Temporary Insurance, Critical Illness Insurance and Medical and Health Insurance due to the restriction of face-to-face selling by agents and bank staff and to the efforts taken to develop direct life insurance distribution channels, especially though digital innovation, since 2017. Customers now have the option of purchasing these types of insurance plans namely Term Insurance, Critical Illness and Medical and Health via direct channels.
Ms Loh Guat Lan, president of LIAM, said “The COVID-19 pandemic has increased in the awareness among Malaysians on the importance of life insurance protection. The role of life insurance has become even more important as an essential financial tool to reduce uncertainties in life. Therefore, I would urge all industry players to come together and offer our best service in protecting more people out there with adequate insurance protection to create a better future for themselves and their families.”
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She added, “The recent pandemic has been the unexpected catalyst for the adoption of technology than ever before. During the MCO and RMCO, insurers continued to serve its customers via digital platforms or assisted by the customer service centres. While new methods and technologies will impact how business is conducted on a day to day basis, I believe that the adoption of technology is inevitable in order for us to be more efficient, responsive and productive to connect with our customers.”
LIAM has a total of 16 members, of which 14 are life insurance companies and 2 life reinsurance companies.
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