By NUR HAZIQAH A MALEK / Pic By TMR
RAM Rating Services Bhd (RAM Ratings) maintains a stable outlook for the insurance industry amid regulatory reforms planned for this year.
The rating company expects general insurance premiums to remain stagnant due to the impact of tariff liberalisation and the country’s economic growth moderating.
“Similarly, life insurance new business premiums are expected to chart a modest 1%-2% rise, given the weaker consumer sentiments and the rising cost of living concerns,” it said.
In 2018, the general insurance premiums rose 1.8% to RM17.6 billion following the 0.1% contraction recorded in 2017.
RAM Ratings said this was supported by growth in the motor, as well as the medical and personal accident segments.
“While fire premiums also saw an increase, future growth will be limited as competition intensifies in this high-margin segment,” it said.
It added that Bank Negara Malaysia’s liberalisation of motor and fire tariffs will give a clearer picture, three years after the reforms were first initiated.
“At this juncture, insurers’ pricing autonomy is still limited, although the regulator may consider further easing from 2019 onwards,” it said.
Motor and fire insurance together accounted for 67% of general insurance premiums last year.