Malaysia likely to miss goal of 75% insurance penetration by 2020

Malaysia’s finance minister has expressed doubts that the country will be able to achieve its target of 75% insurance penetration by 2020 that was set by the previous government.

Speaking at the inauguration of Prudential’s new Malaysian headquarters, Finance Minister Lim Guan Eng said that the market’s current insurance penetration is at 55%, which is a long way off from next year’s target of 75%, the Malay Mail reported. He also indicated that the target may be revised.

“We will have to see what happens next year,” he said. “After that, we will conduct assessments in terms of penetration, shortfalls and what needs to be done. [The deficit] is based on price and affordability.”

According to Lim, the government introduced the MySalam critical illness insurance scheme in response to the protection gap. The scheme benefits the bottom 40% of the population in terms of income.

In his speech, Lim also called on insurers to develop more products to supplement the MySalam scheme in serving people who belong to the lower income brackets. This, he said, could be done by creating more diverse and affordable insurance products.

“Insurance providers, including Prudential, should also further develop insurance protection plans for the under-served and under-protected who are largely from the low-income group or the B40. This includes providing Malaysians with more diversified and affordable choices,” said Lim, who also pointed out that Malaysia’s insurance penetration has stagnated at around 55% for several years.

Source: Insurance Business Asia