Social media to expedite life insurance penetration rate

by HARIZAH KAMEL / pic by ARIF KARTONO

THE Life Insurance Association of Malaysia (LIAM) has launched its inaugural consumer awareness programme on social media called #BukanExtra to help accelerate the country’s life insurance penetration rate.

“We set a direction to achieve 75% of penetration rate by 2020, so we are indeed behind time and we know we need to catch up, so this #BukanExtra campaign is something that we really want to launch and create awareness.

“During the Movement Control Order (MCO) period in April, the activity recovered about 48% of the previous year, it recovered to 75% in May and 86% in June. Many in the industry agreed that in July, the activity has gone up close to the normal activity,” LIAM president Loh Guat Lan said in a press conference after the launch in Kuala Lumpur (KL) yesterday.

She believes the Covid-19 situation has created more awareness, adding that the industry would like to continue engaging with the youth, single professionals, newly-married couples and young families.

Through #BukanExtra campaign, which starts from Sept 9-Oct 6, LIAM together with its 16 member companies aim to generate awareness and educate consumers on the importance of life insurance protection; encourage financial planning among the younger generation; and create a sense of urgency to act early.

It also intends to bring the insurance industry closer to the younger generation and demystify life insurance through social media engagements.

According to Loh, the life insurance penetration rate has been hovering around 54% for the past five years and has been reduced to 41% after eliminating multiple ownership of life insurance/takaful policies.

Out of the 41%, only 4% of households in the lower-income group have some form of life insurance/takaful cover, while over 90% of them do not have sufficient coverage for themselves and their loved ones.

In 2019, the average sum assured for individual policy categories reached RM130,000 per policyholder. This means that each policyholder will have an average life insurance protection of RM130,000 to take care of their family in the event of a loss of the breadwinner.

However, the level of protection is still not adequate and there is a wide protection gap in terms of insurance coverage needed, said Loh.

The average protection gap for the group headed by a breadwinner who is not covered by either life or medical insurance is the largest, at about RM723,000 per family.

She disclosed that the industry together with the regulator and key stakeholders are working hand-in-hand to address the challenges through the implementation of various educational and promotional programmes, as well as initiatives.

“We remain focused on achieving the financial inclusion agenda by strengthening the existing frameworks and brainstorming new ideas to improve the quality of life of the rakyat through life insurance protection,” Loh elaborated.

LIAM industry promotion committee chairman Ramzi Toubassy said the strategy in developing the concept of #BukanExtra this year will carry a strong message on life insurance and eventually will help raise financial literacy among the Malaysian youth.

“The most important thing is that life insurance is essential to any family and this is what we want the young people to understand and appreciate because as they get older their interest is more and more about the importance of life insurance,” he said.

Meanwhile, LIAM CEO Mark O’Dell said the take-up rate as a result of the campaign is not a primary key performance indicator as they are looking to increase awareness and engagement.

“The influencers that we are working with can reach a target audience of about 400,000. Hopefully, with getting the hype on social media, we hoped to reach out to more than a million Malaysians during this campaign,” he said.

Commenting on the recent industry results for the first six months of 2020, O’Dell said it showed about 12% drop in new business premium and that figure came in during the second quarter when the MCO was in full swing.

“We will be monitoring very closely the second half of 2020 (2H20); we are not making any predictions as to how the year might end, but we expect it to be better than 1H20.