KUALA LUMPUR, Nov 30 — The life insurance industry, which recorded a 37 per cent quarter-on-quarter (q-o-q) drop in new business premiums in the second quarter of 2020, rebounded in the third quarter (Q3) with a q-o-q increase of 44 per cent in new business premiums.
In a statement today, the Life Insurance Association of Malaysia (Liam) said the industry’s new business premiums rose to RM2.92 billion in Q3 from RM2.02 billion in the immediate preceding quarter.
The association attributed the rebound to an improvement in the investment-linked business, which contributed a 94 per cent growth to RM1.43 billion from RM737.72 million in Q2.
Liam president Loh Guat Lan said the strong growth in the Q3 performance was due to the positive effects from the reopening of the economy from the COVID-19 pandemic and the government’s recovery efforts to revitalise economic activities.
“The pandemic has also increased the awareness among Malaysians on the importance of financial protection as a safety net in facing uncertainties in life,” she said.
Liam said individual new business premiums also saw a surge of 32 per cent in the quarter under review to RM733.75 million against RM556.01 million in Q2, while group new business premiums recorded an increase of two per cent to RM750.51 million from RM732.22 million in the preceding quarter.
In terms of the number of new policies, the industry recorded a total of 340,061 new policies in Q3, reflecting a growth of 39 per cent from Q2. This comprised 165,329 new investment-linked policies (30 per cent q-o-q growth), 169,814 new individual policies (51 per cent growth) and 4,918 group policies (two per cent growth).
Meanwhile, on a year-on-year basis, the industry recorded a moderate growth of 3.8 per cent in the number of new policies in Q3 2020, with new individual policies increasing by 25.6 per cent and new group policies rising by 4.7 per cent.
However, new investment-linked policies in Q3 2020 dropped by 11.9 per cent compared to Q3 2019, it said.
Liam said the industry had granted a deferment period/no-lapse guarantee for three months for policyholders impacted by the pandemic.
“During this period, insurance companies will continue to provide insurance protection to affected policyholders if they are not able to pay for their premiums.
“Affected policyholders must apply to their insurance companies to get approval before they can benefit from this relief measure, starting from April 1 until December 31, 2020,” it said.
To date, more than 1 million policyholders had benefited from this initiative with total premiums valued at over RM1.6 billion, the association said.
On the overall outlook, Liam said if the positive trends continued in the fourth quarter of 2020, the industry expected a modest single-digit growth for this year.
— Bernama
