Malaysia Insurance Report Q1 2015 - New Study Released

The life segment, despite being larger in size, will underperform growth in Malaysia's insurance sector over the 2015-2018 period due to a rather saturated market. On the other hand, the non-life segment will see benefit from the removal of statutory tariffs on certain non-life lines which will increase competition and drive growth in the sector.

We forecast total gross premiums to grow 5.9% in Malaysian ringgit (MYR) terms in 2015, the same growth rate that was achieved in 2014. However, in USD terms, growth will accelerate to 11.9% due to our expectation for the MYR to appreciate versus the US dollar over the course of the year. We forecast gross life premiums to rise by 11.5% (in USD terms) and gross non-life premiums to increase by 12.6% (in USD terms) in 2015.

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Over the 2015-2018 period, we forecast gross premiums to grow at an annual average of 8.8% (in USD terms) to reach USD22.6bn by 2018, helped by an appreciating MYR during this period. This will concurrently take insurance density from USD588.1 per capita in 2015 to USD705.6 per capita in 2018. While Malaysia's life insurance segment accounts for the majority of the sector (at about 68% of total gross premiums), we forecast growth in the segment to underperform over this period, due to a certain degree of saturation in the market.

The non-life segment on the other hand, will average 10.1% growth (in USD terms) annually over the 2015-2018 period, to reach USD7.6bn in 2018. This period of outperformance will see the market share of the non-life sector increase from 32.5% at present to 33.8% in 2018. We believe the removal of statutory tariffs on certain non-life lines such as motor and fire insurance will see lower premiums and drive growth in the sector. As new firms enter the market, competition will increase and weaker players will eventually be forced to exit.

The reinsurance needs of the non-life sector vary. The competitive landscape is littered with many small sub-scale local players...

The Malaysia Insurance Report has been researched at source and features Business Monitor International (BMI)'s independent assessment and forecasts for the insurance sector. It examines industry developments, key growth drivers and risk management projections, including the macroeconomic situation, government policy, regulatory environment and the level of development and potential for growth, broken down by line. Leading insurers are profiled, covering premiums, products and services and competitive positioning.

BMI's Malaysia Insurance Report provides professionals, consultancies, government departments, regulatory bodies and researchers with independent forecasts and regional competitive intelligence on the Malaysian insurance industry.

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