Covid-19 increases demand for life insurance

The heightened importance of life insurance protection contributes to its premium growth to RM11.8b last year

by NUR HANANI AZMAN/ pic by MUHD AMIN NAHARUL

NOT all impacts of the Covid-19 pandemic are negative. The virus has raised Malaysian’s awareness on the importance of life insurance after realising that the virus infects everyone regardless of financial background.

Times like this remind people how uncertain life can be and the need to protect their families in the event of tragedy befalling the breadwinner.

A spokesperson from the Life Insurance Association of Malaysia said households would not only lose its source of income but also would lack the funds to pay for the unexpected expenses.

The spokesperson said the association expected the insurance industry to stay resilient despite the considerable economic impact of the Covid-19 crisis.

“Although it is not exactly ‘business as usual’ for insurance companies, insurers have put in place a very robust business contingency plan even before the Movement Control Order (MCO) was implemented.

“All essential services were uninterrupted, so policyholders continued to receive their service either online or be assisted by customer service centres and even face-to-face, with safeguards on social distancing,” the spokesperson told The Malaysian Reserve (TMR) in an email reply.

However, the spokesperson said policyholders could do everything online, including the purchase of insurance.

Agents can also continue to sell and provide advice to customers through virtual connections.

The spokesperson said to help Malaysians who had lost their jobs or suffered a steep drop in income, the insurance and takaful industry had granted a 90-day deferment period or no-lapse guarantee for policyholders who were affected by the pandemic.

“During this period, insurance and takaful companies will continue to provide insurance protection to affected policyholders even if they are not able to pay for their premiums.

“But they must get their insurance companies’ approval before they can benefit from this relief measure,” the spokesperson added.

Policyholders who are qualified for this relief include those who are Covid-19 positive patients, those who are under mandatory home quarantine, and those who suffered a loss of income.

The spokesperson revealed that the association also extended the relief to small and medium enterprises, which had suffered due to the unprecedented crisis.

“This includes retrenchment, shorter working hours, salary or commission reductions for staff and loss of business income for the self-employed.

“This facility of premium deferment is open to affected policyholders until Dec 31, 2020,” the spokesperson said.

Insurance companies will continue to provide other forms of support to help individuals to keep their policies in force.

These may include a restructuring of policy features, such as lowering the sum insured or temporarily shortening the policy duration, so that policyholders can keep their insurance protection.

The industry has also set up a Covid-19 Test Fund (CTF) worth RM8 million to support the Health Ministry’s (MoH) efforts to conduct more Covid-19 tests for Malaysians.

The fund also covers Covid-19 tests required before hospital admission for emergency and semi-emergency surgeries, which are available until Aug 31, 2020.

This will not only address the needs of policyholders but also protect healthcare frontliners from the risk of Covid-19 infection.

The life insurance premium grew 14.19% to RM11.8 billion last year, up from RM10.3 billion recorded in 2018, driven by heightened awareness among consumers on the importance of life insurance protection.

On the outlook for 2020, the spokesperson said the association expected the industry to achieve high single-digit growth, given the uncertainties faced by the global and local economies.

Meanwhile, the General Insurance Association of Malaysia (PIAM) said insurance companies have been issuing guarantee letters, processed claims and renewed policies during all these months.

A PIAM representative said there are general insurance companies who are offering motor insurance coverage based on mileage band driven during the MCO period, while others may be offering other attractive incentives for consumers as well.

“These are all based on individual insurance business strategies and pricing models which differ from one insurer to another.

“While the number of vehicles on the road had reduced significantly during the MCO period, there were still motorists who required roadside assistance; be it in an accident or a vehicle breakdown situation,” the representative told TMR in an email reply.

The insurance industry’s Accident Assist Call Centre (AACC) hotline 15-500 has been operational around the clock to provide a peace of mind to motorists during the MCO.

AACC responds to basic and general enquiries relating to insurance claim coverage and procedures and assists to transfer an individual’s call to his or her insurance company’s call centre.

Where travel insurance is concerned, some insurers are allowing the cancellation of travel insurance with a full refund of premiums.

The representative explained that some insurers even allowed for the change of travel period for the travel insurance purchased.

“Additionally, some member companies are also offering extra Covid-19 coverage for their customers at no additional costs, while some waived certain medical policies exclusions where Covid-19 is concerned.

“In support of MoH’s efforts, PIAM member companies have rallied together and pledged RM2 million as a contribution to the CTF,” it said.