Will Malaysia meet its 75% life insurance penetration target by 2020?

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Malaysia Unlikely to Meet 2020 Life Insurance Penetration Target

Malaysia is unlikely to achieve its 2020 target of a 75 per cent life insurance penetration rate, with the current rate standing at 55 per cent. The government acknowledges this shortfall and plans to conduct assessments to revise the figures and determine necessary actions. Factors contributing to the stagnation, such as price and affordability, are also being considered.
Government Acknowledges Target Shortfall

The finance minister has expressed doubt regarding Malaysia's ability to reach the 75 per cent life insurance penetration rate by 2020, a goal originally set by the previous administration. The current penetration rate of 55 per cent is significantly below this ambitious target. The federal government intends to undertake a review of these figures within the current year to better understand the situation.
MySalam Initiative Addresses B40 Group Protection

In response to the low penetration rates, particularly among lower-income groups, the government introduced MySalam. This initiative provides a free protection policy for individuals in the B40 category. Eligible recipients receive a one-off payment of RM8,000 upon diagnosis of one of 36 critical illnesses. Additionally, MySalam offers RM50 per day for a period of 14 days for hospital stays at government hospitals, providing a form of income substitution.
Call for More Diverse and Affordable Insurance Products

Insurance providers have been urged to develop a wider array of insurance products that are both diverse and affordable, specifically targeting the under-served B40 segment of the population. This call aims to encourage the creation of more accessible insurance options to help close the existing protection gap. The stagnation of the life insurance penetration rate at 55 per cent for several years highlights the need for such tailored solutions.
Low Individual Policy Holdings Persist

Further underscoring the challenge, data indicates that less than 41 per cent of Malaysians possess at least one individual or group life insurance policy or family takaful. This statistic suggests a broad segment of the population remains without basic life insurance coverage, contributing to the overall low penetration rate and the difficulty in meeting the national target.

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Will Malaysia meet its 75% life insurance penetration target by 2020?

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