by LYDIA NATHAN / pic by BERNAMA
THE life insurance industry experienced a strong third quarter (3Q20) with new business premiums growing by 44% to RM2.92 billion from RM2.02 billion in premiums recorded in 2Q20.
In a statement released yesterday, the Life Insurance Association of Malaysia (LIAM) stated that the strong performance seen in 3Q20 was mainly due to improvement in the investment-linked business, growing by some 94% from RM737.72 million in 2Q20 to RM1.43 billion in 3Q20.
LIAM president Loh Guat Lan (picture) said the reopening of the economy after the Movement Control Order (MCO) and Recovery MCO (RMCO) fuelled the growth as the government put in efforts to revitalise the economy.
“The pandemic increased awareness among Malaysians on the importance of financial protection as a safety net in facing uncertainties in life,” she said.
She said individual new business premiums saw an increase of 32% to RM733.75 million for 3Q20 compared to RM556.01 million in the previous quarter this year.
“Group new business premiums recorded an increase of 2% to RM750.51 million from RM732.22 million in 2Q20.
The total premium in 2Q20 from new business fell 37% to RM2.03 billion compared to RM3.22 billion in 1Q20.
The drop was mainly in the sales of group policies and investment-linked policies which contracted by 56% and 25% respectively, Loh said.
According to Loh, 2Q20 was the most challenging so far as the regulations imposed during MCO and RMCO prevented agents from conducting face-to-face selling for about three months.
The industry sold a total of 340,061 new policies in 3Q20, recording a growth of 39% from 2Q20, including a total of 165,329 new investment-linked policies and 169,814 individual policies.
The industry experienced a 23% drop in investment-linked policies and group policies sold in 2Q20 compared to 1Q20.
“Investment-linked policies went from 142,750 to 109,342, while the number of group policies fell from 6,215 to 4,812. Individual policies registered a double-digit growth of 16% or from 112,075 to 130,326 policy units, reflecting the demand in individual policies during the pandemic,” Loh said.
The industry registered a modest growth of 6.5% in total premiums year-on-year, where total premiums for investment-linked and individual policies in 3Q20 were higher by 20.7% and 1.2% respectively compared to 3Q19.
A moderate growth of 3.8% in the number of new policies was recorded for 3Q20 compared to the same quarter last year, while individual new policies increased by 25.6% and group new policies increased by 4.7% compared to the same period in 2019.
Loh said the role of insurance has become an important and significant part of people’s lives for protection and ease of mind.
The industry granted 90 days of deferment period for policyholders who are impacted by the Covid-19 pandemic, while insurance companies continue to provide insurance protection.
“Affected policyholders must apply to their insurance companies to get approval before they can benefit from this relief measure. This option will be available until Dec 31, 2020. To date, more than one million policyholders have benefitted from this initiative with total premiums valued at over RM1.6 billion,” Loh said.