KUALA LUMPUR – New business premiums in the life and general insurance industry recorded double-digit growth in the first half of 2024 to more than RM20 billion, said Bank Negara Malaysia (BNM) Governor Datuk Seri Shaik Abdul Rasheed Ghaffour.
The family and general takaful industry also showed strong growth to record total contributions of over RM7 billion, Rasheed said in his keynote address at the Asian Institute of Insurance’s (AII) strategic rebranding launch today.
Noting that the Malaysian economy grew by 5.9% in the second quarter of 2024, Rasheed said this expansion was supported by resilient domestic demand and recovery in external demand.
He added that in order for the nation to realise its full economic potential, it is vital for industry players to remain resilient to shocks and disruptions while continuing to put risk management at the top of the agenda.
“This is where insurance and takaful protection can play their part – one that will foster greater stability and resilience in our economy.
“I would like to see the insurance and takaful sector remain relevant, thrive and continue to play a pivotal role in contributing to the nation’s broader economic and social development in the years ahead,” he added.
The AII event held at Menara Affin was held to mark the 56-year-old institute’s journey from a national institution to a regional one, with the centre aiming to broaden its impact across Asia as part of its rebranding from the Malaysian Insurance Institute.
During a press conference after the launch, AII chief executive officer Paul Low Hong Ceong addressed queries regarding BNM’s directive to introduce co-payment options for medical and health insurance and takaful (MHIT) products.
The policy, which came into effect on September 1, previously raised concerns among public and private healthcare professionals, with certain quarters asserting that the move could pose significant risks to healthcare accessibility and affordability, especially for those in lower-income groups.
Commenting on the initiative, Low said that while medical inflation is an ongoing challenge faced by the insurance industry, the co-payment method is expected to lead to the public “carefully evaluating” whether or not it is necessary to bring their ailments to a medical centre.
Pointing out that other healthcare systems in countries such as Singapore and the United States also have similar co-payment options, Low said that AII will continue to hold seminars and other informational sessions on the topic to educate the public.
“By sharing insight on why (the co-payment method has been introduced), the public will know that it’s not a bad thing (as) it is actually (meant to) manage overall medical costs and insurance premiums,” he added.
Expressing similar sentiments, Life Insurance Association of Malaysia (LIAM) chairman Raymond Lew assured that the association prioritises consumers and will do “whatever it can” to ensure every Malaysian is well protected.
“What we want to identify is solutions to address concerns from the general Malaysian public, so that everyone can hopefully afford insurance premiums and continue to enjoy protection coverage.
“It’s not an easy subject (as) many people are involved and it’s a work in progress, but LIAM is definitely putting in its resources to drive this (by) setting up a committee together with other key stakeholders cutting across the entire healthcare ecosystem,” he said.
When asked whether hospitals should be pushed to regulate disbursements by health insurance companies, Lew said that such a move would require a “collective consensus” as LIAM is only able to enact measures from a life insurance perspective relating to its product and processes.
The BNM policy requires insurance and takaful operators to offer medical and takaful insurance products with a minimum co-payment of either 5% of total claimable expenses or an RM500 deduction per policy certificate year.
Consumers who have already purchased MHIT products without a co-payment feature can continue with their existing MHIT products at renewal while insurance and takaful operators can also continue to offer MHIT products without a co-payment feature to new consumers.
BNM’s Policy Document on Medical and Health Insurance/Takaful Business also set out several rules to be observed by such operators, including how co-payments should not apply during emergency treatment, outpatient treatment relating to critical illnesses and treatment at public healthcare facilities.
Insurance and takaful operators are also expected to give due consideration to any financial hardships or extenuating circumstances faced by a policy owner or takaful participant and may apply its discretion to waive co-payments in such circumstances. – September 18, 2024
