The pandemic has impacted the world in many ways – from the irreversible loss of human life to an unprecedented global economic slump, it has inflicted massive changes to our lives. Malaysia registered a 5.6% decline in its GDP for 2020 – the worst ever decline since the 1998 Asian Economic Crisis. Despite that, Malaysia's reinsurance industry demonstrated resilience, with general insurance premiums remaining stable. Below is a general overview of how various aspects of the Malaysian insurance and reinsurance market performed in 2020.
Overview of
the insurance & takaful industry
Premium growth:
● The life industry showed
stable growth in premiums, but new businesses are declining.
● Travel insurance experienced
a sharp decline due to travel restrictions.
● The non-life Industry
recorded a lower growth rate. The main growth contributor is Personal Accident,
Medical & Health classes.
Assets and capital growth:
● The reinsurance industry recorded an asset growth of
7.9% to MYR355.8 billion, mainly led by the Takaful sectors.
● The Industry achieved a
Capital Adequacy Ratio (CAR) of 221% in 2020, well above the regulatory
requirement of 130%, demonstrating strong financial stability.
Overview of
the non-life insurance & takaful industry
Gross Written Premium
● Due to imposed movement
restrictions during the lockdown, motor Insurance has recorded slower growth
than in previous years.
● Besides that, miscellaneous
premiums recorded the highest growth in the past 5 years, mainly from the
Engineering class, due to additional premiums from construction project
extensions.
Net Claims Ratio
● Non-Life Industry
experienced its lowest Net Claims Incurred ("NCI") ratio of 53.3% in
the past 10 years. The number of road accidents in 2020 decreased by 26% due to
the limited mobility of motorists during the lockdown, which contributed to lower
claims.
● Additionally, the fire class
shows better underwriting performance than the industry average. However, its
loss ratio decreased by 4% from last year.
● Despite increasing
competition in the local market, Malaysian Re continues to dominate Malaysia's
reinsurance market share.
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Malaysian Reinsurance Berhad (Malaysian Re) is
Malaysia's largest reinsurer, commanding more than 60% of reinsurance accepted
premiums in the country. The team comprises experienced marketing executives,
technical experts and underwriting specialists to provide businesses with
quality reinsurance services and products. Malaysian Re underwrites all classes
of general reinsurance and retakaful business, with an extensive business
portfolio across Asia and the Middle East. Head over to https://www.malaysian-re.com.my/our-insights for valuable insights about
the reinsurance industry.