Guan Eng: Malaysia set to miss goal of 75pc life insurance penetration by 2020

Azril Annuar
Minister of Finance Lim Guan Eng gives a speech during the launch of Menara Prudential at Tun Razak Exchange, September 10, 2019. — Picture by Miera Zulyana

KUALA LUMPUR, Sept 10 — The finance minister is not confident that the 2020 target of a 75 per cent life insurance penetration rate set under the Barisan Nasional (BN) administration is achievable.

Speaking to a press conference after launching Menara Prudential today, Lim Guan Eng said the current 55 per cent was far from next year’s target and the federal government will be revising the figures this year.

“That (75 per cent) was the original target set by the previous government. We will have to see what happens next year. After that, we will conduct assessments in terms of penetration, shortfalls and what needs to be done. It (the shortfall) is based on price and affordability.

“Knowing that the penetration rate is far below the target, we introduced MySalam, a free protection policy catering to the B40 group.

“In the event someone (MySalam policy holder) is afflicted with one of the 36 critical illnesses, the person will receive a one-off payment of RM8,000 from the government and income substitution of RM50 per day for 14 days at government hospitals only. The income substitution is renewed annually,” he said.

During the launch, he also called on insurance providers to provide and develop insurance protection plans for the under-served and under-protected who come from the B40 group.

Lim urged insurance companies to provide more diverse and affordable insurance products.

“Thus, the government and Bank Negara Malaysia are taking every effort to realise the national agenda for the national insurance penetration rate to reach 75 per cent in 2020.

“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.

He pointed out that Malaysia’s life insurance penetration rate has stagnated at 55 per cent for years.

Bank Negara’s data also found that less than 41 per cent of Malaysians have at least one individual or group life insurance policy or family takaful.

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