Insurance agents ever-relevant in digitised era

As of 2020, insurance penetration rate in Malaysia was only 54%, below global average of 68% 

by AFIQ HANIF / pic BLOOMBERG

THE insurance industry is an important sector of the country’s economy. According to data from the Life Insurance Association of Malaysia (LIAM), the industry contributes approximately 2.9% to Malaysia’s GDP and provides employment for over 52,000 people. 

The Malaysian insurance market is fairly diverse, with a range of domestic and international insurers operating in the country. 

The industry is regulated by Bank Negara Malaysia (BNM), the country’s central bank, which sets rules and standards to ensure that insurers maintain sound financial practices and provide adequate protection to policyholders. 

In terms of product offerings, the Malaysian insurance market is quite broad and includes a range of life, health and general insurance products. 

Life insurance is the largest segment of the market, accounting for around 61% of total premiums, followed by general insurance (28%) and takaful (11%), which is a type of Islamic insurance. 

Despite the importance of the insurance industry in Malaysia, insurance penetration remains relatively low compared to other developed countries. 

As of 2020, the insurance penetration rate in Malaysia was only 54%, below the global average of 68%. 

While insurance penetration in Malaysia has been growing steadily in recent years, there are still significant gaps in coverage, particularly in areas such as health and life insurance. 

Factors such as low levels of awareness and education about insurance products, as well as cultural attitudes towards risk and financial planning, may be contributing to the relatively low penetration rates in the country. 

Life insurance agent Daniel Asyraf Mukmin said it is worth noting, however, that insurance penetration rates can vary widely depending on the specific type of insurance and demographic group being considered. 

“For example, some segments of the population may be more likely to have coverage for car insurance or property insurance, while others may be more likely to have life insurance or health insurance,” he told The Malaysian Reserve (TMR). 

He stressed that while there have been some positive developments in insurance penetration in Malaysia in recent years, there is still significant room for improvement, and there is a need for continued efforts to raise awareness about the importance of insurance and improve access to coverage for all Malaysians. 

This may involve using tools such as chatbots and online portals to provide 24/7 support to better understand and anticipate client needs, says an agent (pic source Chatbots Life)

Another insurance agent, Ronald Siew said while insurance penetration in Malaysia is indeed low compared to other developed countries, insurance agents are still relevant and play a critical role in helping Malaysians understand the importance of insurance and make informed decisions about protecting themselves and their assets. 

“Insurance agents provide valuable advice and guidance to clients, helping them assess their insurance needs, understand policy terms and conditions, and select appropriate coverage,” he said to TMR. 

He added that in many cases, insurance agents act as a trusted advisors, helping clients navigate complex insurance products and make informed decisions about their financial security. 

“That being said, the role of insurance agents is evolving in response to changing consumer preferences and technological advancements. 

“Today’s consumers are increasingly comfortable researching and purchasing insurance products online, and they may be less reliant on face-to-face interactions with agents. 

“As a result, insurance agents need to adapt their approach to remain relevant and provide value to clients in a rapidly changing marketplace,” Siew said. 

He added that in the future, insurance agents will likely continue to play a critical role in educating consumers about insurance product. 

“However, agents will also need to leverage technology and digital channels to provide a more seamless and personalised experience for clients. 

“This may involve using tools such as chatbots and online portals to provide 24/7 support and access to information, or leveraging data analytics to better understand and anticipate client needs,” he added. 

He also believed that while the role of insurance agents may be evolving, there is still a significant need for their services in Malaysia, and they will likely continue to play a critical role in helping consumers protect their financial well-being. 

For a part-time insurance agent, Maisarah Othman, insurance agents are still relevant today because they play a critical role in helping consumers navigate the complex world of insurance and make informed decisions financially. 

“Insurance agents provide personalised advice to clients, helping them understand their specific insurance needs and guiding them in selecting the right coverage to meet their needs. 

“Agents have in-depth knowledge of insurance products and can help clients understand policy terms and conditions, as well as the benefits and limitations of various types of coverage compared to robo advisors that are running in the market at the moment,” she said. 

She also said that when it comes to claims assistance, agents provide valuable support to clients when filing insurance claims, helping to ensure that claims are processed smoothly and that clients receive the benefits they are entitled to. 

While digital channels have made it easier for consumers to research and purchase insurance products online, insurance agents continue to play an important role in providing personalised advice, expertise and support to clients with a human touch. 

In many cases, agents act as a trusted advisors, who puts their clients at ease when faced with tough choices or when they are in a tight spot. 


  • This article first appeared in The Malaysian Reserve weekly print edition