General takaful drives Malaysia’s non-life insurance growth
Non-life grew by 4% in 2021.
Malaysia’s non-life insurance industry’s gross written premiums grew by 4% to $4.95b in 2021, driven by the general takaful business, according to insurance industry rankings firm AM Best.
General takaful made up 44% of the industry’s growth for that year. AM Best said the increase follows a contraction in non-life premiums in 2020 and was driven by a recovery in most lines of business, especially fire, engineering and the growing motor takaful segment.
Over the near to medium term, the segment’s growth will be supported by Malaysia’s economic recovery and increased insurance penetration. AM Best said that whilst economic growth has rebounded with the lifting of prolonged COVID-19-related social and business restrictions, the increased adoption of digitalisation has improved the ease of policy subscriptions and is helping to raise insurance penetration.
AM Best financial analyst Susan Tan said the key line businesses that will drive the country’s non-life insurance industry will be fire and motor insurance. Particularly motor as following the end of movement restrictions and lock-downs, motor insurance is expected to expand over the near term on the back of increased new vehicle sales.
“Given the hardening of reinsurance rates for fire coverage in recent periods, primary insurers have been moderately increasing the pricing for fire. Price increases for the fire line peaked in the fourth quarter of 2021 following the December flood event in Malaysia,” Tan added.