KUALA LUMPUR: More than 40% of Malaysians remain uninsured, and the life insurance penetration rate stands at 58.6% as of 2023.
Life Insurance Association of Malaysia (LIAM) president Raymond Lew, quoting a recent survey, said 48% of local respondents with dependents lack life insurance, 44% have no medical insurance, and 13% rely solely on company-issued medical cards.
“Many Malaysians, especially in underserved areas, face financial risks during crises.
“The collaboration with Financial Education Network and Bank Negara Malaysia (BNM) has allowed LIAM to work closely with partners and affiliates under the network on various outreach programmes and initiatives to promote financial literacy and encourage insurance ownership nationwide,” he said in his speech at the launch of the Starter Pack Insurance Fund or i-Mula 50 today.
He said that in 2022, the insurance and takaful industry, in consultation with BNM, conducted a study to design tailored microinsurance products for the low-income market, including the B40 and M40 segments The study identified key risks, such as accidents, health issues, income loss, and bereavement, guiding insurers to develop affordable products that address these needs and promote inclusive growth.
LIAM launched i-Mula 50, an initiative designed to make life insurance more accessible and affordable for 100,000 eligible Malaysians. The event was officiated by BNM deputy governor Adnan Zaylani Mohamed Zahid.
The RM5 million programme, established by Liam member companies, aims to support first-time buyers to purchase life insurance protection. Under i-Mula 50, 11 life insurance companies will offer 31 affordable protection plans, targeting youths and young families nationwide.
LIAM CEO Mark O’Dell said Malaysia’s current per capita policy ownership rate is about 58%. However, this figure does not consider individuals who hold multiple policies.
“When we account for these factors, the actual penetration rate falls to the low 40s. While this may not be low for a country like Malaysia, there is a significant potential for growth in this area,” he said.
“If you consider who is currently consuming insurance and who isn’t, it’s clear that the middle-lower income group is less engaged in purchasing insurance.
“The iMula 50 plan targets young families, young adults, and those with lower incomes by offering a price point our research shows suits them. Our goal is to reach 100,000 people. If we achieve that, we will significantly increase penetration this year and raise awareness nationwide.:
O’Dell said that in commemorating its 50th anniversary this year, LIAM has initiated a flagship community programme in which member companies have pledged RM5 million to subsidise RM50 per eligible participant or policyholder, ensuring accessibility based on premium size.
“We hope that this will become a bit of a catalyst that will cause an increase in penetration and create an awareness for people to think about their insurance needs and to take action.
“i-Mula 50 is about encouraging the youth to purchase insurance and our way of giving back to the nation. The RM50 is just a one-off, yes. It is a small token, but we hope it stimulates conversations between distributors and buyers,” he said.
