Overview of the General Insurance Industry in Malaysia
This study aims to provide an overview for the general insurance industry in Malaysia by providing market size, growth trends and demand drivers of the industry. The study also provide fundamental analysis of top 6 local insurance companies to assess the landscape of the industry. For this purpose, ratio analysis is done to identify trends in financial management. Top performers for each market segment, revenue and profit growth and an outlook for the industry in 2014 also forms a part of this study.
The general insurance industry in Malaysia has sustained a robust growth trend, recording a compound annual growth rate (CAGR) of% for 2009 to 2012. In 2012, the size of the market as measured by the gross direct premium was approximately RM billion, having grown by % from the previous year. The industry is expected to expand at a CAGR of% from 2012 to 2018F.
The strong growth of the medical and personal accident (PA) insurance segment is largely driven by a number of factors such as the rising middle class population, growing medical costs, rapid urbanisation, and GDP growth. The segment is also largely influenced by the increase in outbound travellers in Malaysia as well as the requirement under the Hospitalisation and Surgical Scheme for Foreign Workers (SPIKPA), which mandates all foreign workers to have medical insurance coverage effective from 1 January, 2011.
The motor insurance segment continues to be a key one for the general insurance industry in Malaysia due to the growing number of vehicles in the country and the mandatory regulatory requirement for all vehicles to have insurance coverage. Prospects in the motor segment are expected to improve further with the expected lifting of the motor insurance tariff by 2016.
Under the ETP, the Performance Management & Delivery Unit (PEMANDU) has identified eight strategic reform initiatives that are expected to boost the local economic growth, which, in turn, may spur trading activities and improve business sentiments in the country. Increasing business activities may also provide insurance opportunities for general insurance companies, especially in the Marine, Aviation and Transit (MAT) insurance segment.
The growing number of property units in Malaysia provides an opportunity for general insurance companies to offer fire insurance coverage for property owners.
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