New Financial Services market report from Business Monitor International: "Malaysia Insurance Report Q3 2016"
[ClickPress, Thu Jun 16 2016] Although premiums in both the non-life and life segments of Malaysia's insurance sector are increasing at single- digit rates, there remain good prospects for profitable growth by the lead ing insurers. Most of the major insurers have strengths that they are able to leverage such as ability to innovate, multi-channel distribution, access to global capital markets and well- established brands. Many are provid ing takaful solutions.
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In Q316, we are not making changes to our forecasts for Malaysia's life insurance segment. We continue to expect growth in gross life insurance premiums to slow over the course of the forecast period from just over 5% in 2015, to just below 4% in 2020. Other metrics, such as the strong rises in new business premiums and value of new business for many of the leading companies over the course of 2015, provide a better indication of the opportunities. Life insurance is well established as a conduit for organised savings among those households who understand it and value it: many of them are moving from contributing premiums to drawing down benefits. Nevertheless, the world class life insurers who dominate the segment are leveraging their various strengths to reach first time customers.
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Even by the standards of South East and East Asia, Malaysia remains one of the most dynamic life insurance markets globally. Unsurprisingly, the majors all see the country as a key part of their global/regional footprint. Family Takaful remains a relatively fast growing part of the market.
We remain of the view that premium growth in the non-life segment is also set to decelerate. In the short term, the sluggishness of the economy remains a challenge. Over the medium term, the main constraint on the expansion of premiums will likely remain price competition in the important motor vehicle insurance sub-sector, which accounts for 47.1% of non-life premiums. Transport insurance premiums should benefit from the growth in regional trade. Health insurance premiums will likely rise because of the continuing increase in healthcare costs. Personal accident insurance is expanding thanks to sales to new users. General Takaful is, and will likely remain, something of a growth hotspot.
The Malaysia Insurance Report has been researched at source and features BMI Research'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.
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