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Malaysia Insurance Report Q1 2008Published by: Business Monitor International Published: Mar. 11, 2008 - 33 Pages Table of Contents
AbstractThis report differs from its predecessors in that it includes BMI’s Insurance Business Environment Rating(IBER). The rating brings together a number of pieces of relevant quantitative data, together with BMI’sCountry Risk Rating (CRR). It is now much easier to consider the business environment for the insurancesector in any one country relative to the business environment for other industries in that country that aresurveyed by BMI, and the business environment for the insurance sector in other countries.Malaysia’s IBER is 63.5. Relative to other countries in the Asia Pacific region, it is a moderatelyattractive insurance market for foreign insurers, ranking in the middle of the table, well above closeneighbour Indonesia, but below Singapore. Malaysia scores well on the development of its regulatorysystem reflecting reforms of recent years that has helped to raise its overall IBER, despite the size of thesector. Malaysia’s non-life segment is less developed than life and particularly so relative to marketleaders in the region. Over the forecast period, we anticipate that non-life premiums will grow by 9% annually in local currencyterms and by 11% in US dollar terms. Life premiums are expected to increase by 7% annually in localcurrency terms and by 9% in US dollar terms. The key drivers of growth in the non-life segment in 2007-2012 are the anticipated rise in nominal GDP at around 2% a year from around US$179.6bn toUS$263.4bn and an expected increase in non-life penetration from 1.96% of GDP to 2.11%. The keydriver of growth in the life segment is the envisaged rise in life density from US$211.7 per capita in 2007to US$292.23 per capita in 2012. With few barriers to entry, foreign insurers have flooded into the Malaysian market, making both life andnon-life segments extremely crowded. However, many of the cross-border firms in Malaysia are eitherspecialist insurers or focus on multi-national corporate clients. In the non-life segment there are around 20local groups, typically stand-alone non-life or composite insurers or affiliates of the various (generallylisted) Malaysian financial services companies. They are, in the main, (significantly) larger than theircounterparts in Thailand, the Philippines and Indonesia. Malaysia has an enviable regulatory environment compared with many economies in its region. Thecountry has largely shaken off international economic problems and is expected to deliver stable growthover the coming years. Its local firms have strong brand names, tested over many years, and the country isan unquestioned leader in Islamic banking and insurance - an area with great opportunities for growthfrom a niche sector as the overall market increases. The overall market has great room for growth asMalaysia, despite having developed further than many of its regional peers, still has relatively lowpenetration rates. It is unlikely to attract many new players to its crowded markets and those existing local firms havelimited ability to expand beyond Malaysia’s borders. Get Full Details About This Report >> |
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