Malaysian insurance consumer behaviour remains unchanged despite digital shift

Whether a tool is powered by AI or people doesn’t matter.

Customer behaviour around insurance has remained largely unchanged over the past five decades, with customers still prioritising convenience for simple products but relying on human relationships for more complex decisions, according to Amran Hassan, chief strategy officer at Etiqa.

Speaking at the Growing Malaysia’s Insurance Market: Health Value, Distribution Innovation & Customer Loyalty panel at the Asian Banking & Finance and Insurance Asia Summit – Malaysia, moderated by Mok Wan Kong, Partner – RMP & EIP, Head of Insurance at KPMG in Malaysia, panellists were asked what insurance needs to deliver more value.

Hassan said customer expectations remain consistent regardless of whether services are powered by AI or human agents.

“From an insurance standpoint, if you want to buy travel insurance, digital works because it’s such a simple product. But for a life and family product, it’s inherently a more complex product,” he said.

As a result, he added, insurance continues to depend on human relationships, with agents and intermediaries playing a central role in guiding customers through complex decisions.

Ho Teck Seng, president and country head at Sun Life Malaysia, said complex insurance products remain a key barrier to digital adoption.

“Right now, even though they have the digital channel, the user experience is not up to expectations. Once it fails a couple of times, they go back to traditional agents,” he said.

Tricia Mallika Appaduray, chief compliance and sustainability officer at Berjaya Sompo Insurance, said a similar split persists, but younger, more digitally savvy customers are increasingly comfortable bypassing agents for simple products.

For straightforward covers such as motor insurance, most consumers now compare prices and benefits online.

She said this shift is pushing insurers to apply AI to simpler processes, while retaining human judgment for more complex cases.

“I think it is the right time for us to embrace AI… We can use it for underwriting, very simple underwriting, when we get AI to do it for us, rather than an underwriter. Also, for claims, if it’s a very straightforward claim rather than having an adjuster or claims handler look at it, we feed it into AI,” she said.

Ho added that the real challenge is not individual tools, but the underlying systems and processes.

Sun Life has had to invest in core platforms and modernise legacy products, even though the benefits are not immediately visible.

He said such investments only deliver around 25% of potential gains initially, with the remaining 75% dependent on process redesign, skills development, and change management.