Health insurance important driver in Malaysia's non-life market growth: analyst

Stable outlook is also projected for Malaysia’s non-life insurance industry.

The threat of COVID-19 continues to drive demand for health insurance in Malaysia, with health insurance driving the non-life market growth in the country, according to a report by AM Best.

The report said that though there was a slight contraction of non-life insurance premiums due to the economic fallout from COVID-19 which continues to challenge Malaysia’s non-life segment, it was partially offset by growth in health insurance as the pandemic boosted demand and raised awareness for health and medical products. 

Additionally, AM Best said that the non-life market in the country has made good progress since Malaysia upgraded its infrastructure to enable minimal disruption in a remote working environment, as well as in expanding digital platforms to manage operations. The report noted that most insurance companies now have an established framework and developed risk management guidelines to govern a digital-based remote working environment during periods of movement control orders with business contingency plans set up.

“The capital market volatility remains a risk over the near term and is likely to be dependent on ongoing global and regional developments, as well as management of the pandemic. In response to these market conditions, we expect the segment’s non-life insurers to continue to closely monitor their underlying risk exposure to various investment classes and adjust and refine their portfolio allocation as part of their risk management approach,” AM Best said.

AM Best added that Malaysia’s vaccination program will be the key for the country’s recovery, pending adverse effects of COVID-19 containment measures seen in the last three months.