Malaysia's life insurers suffer 12.6% fall in H1 total premiums

Investment-linked policies dropped 24.5%, triggering the fall.

Malaysia’s life insurance industry recorded a 12.6% drop in total premiums for H1 2020 as face-to-face selling were restricted for over three months, according to the Life Insurance Association of Malaysia (LIAM).

A fall in investment-linked policies triggered the drop, which shrank 24.5% in terms of total premiums. Ordinary life premiums also contracted 18.4%, whilst group life premiums inched up 2.4%.

In terms of new policies taken, ordinary life posted a 1.9% growth or 242,201 units of individual new policies whilst group new policies surged 4.6%, attributed to consumers being more mindful of their spending and tailoring their purchases to smaller-sized policies.

During the movement control order (MCO), the sector 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, the association said.

The number of policies sold via direct channels recorded an increase of 47.5% in H1, with annualised premiums and total sum assured registering growth levels of 63.9% and 71.5%, respectively.

Life insurers have granted a 90-day deferment period/no-lapse guarantee for three months for policyholders who are impacted by this pandemic, LIAM CEO Mark O’Dell said. Policyholders who are qualified for this relief include those who are COVID-19 positive patients, home quarantined or have suffered a loss of income.

LIAM has also extended to SMEs which have suffered a loss of income due to retrenchment, shorter working hours and salary or commission reductions for individuals and loss of business income.

The facility to defer premium payments is open to affected policyholders until the end of the year.