Bursting through the RM 300 billion asset mark, Malaysia's life insurance industry is not just growing; it's transforming, with digital sales soaring by 45% and a renewed public focus on protection driving a powerful post-pandemic resurgence.
Key Takeaways
- In 2022, the Malaysian life insurance industry recorded total assets of RM 312.4 billion, reflecting a 6.8% year-on-year growth driven by increased investment income.
- Life insurance penetration rate in Malaysia stood at 2.6% of GDP in 2022, up from 2.4% in 2021 according to Bank Negara Malaysia data.
- The industry's total premiums earned grew by 4.2% to RM 45.7 billion in 2022 from RM 43.8 billion in 2021.
- In 2022, Malaysian life insurance premiums grew 4.5% to RM 46.8 billion amid economic recovery.
- Annualized premium equivalent (APE) for new business reached RM 9.2 billion in 2022, up 13.1%.
- Regular premium new business increased by 8.7% to RM 7.1 billion in 2022.
- In 2022, total in-force policies numbered 16.8 million, up 2.9% from 16.3 million in 2021.
- Life insurance penetration reached 36.4% of adult population in 2022.
- Sum assured in force stood at RM 2.1 trillion, growing 4.7% YoY.
- Total claims paid by life insurers amounted to RM 28.4 billion in 2022, up 7.9% from 2021.
- Death claims payouts reached RM 4.2 billion, average claim RM 85,000.
- Maturity benefits paid RM 12.6 billion to 450,000 claimants.
- Life insurers' investment assets totaled RM 298.7 billion in 2022, yielding 4.8% return.
- Equity investments comprised 22.4% of portfolio at RM 67 billion.
- Fixed income securities RM 180.2 billion, 60.3% of assets.
Malaysia's life insurance industry showed strong growth across all key metrics in 2022.
Claims and Payouts
- Total claims paid by life insurers amounted to RM 28.4 billion in 2022, up 7.9% from 2021.
- Death claims payouts reached RM 4.2 billion, average claim RM 85,000.
- Maturity benefits paid RM 12.6 billion to 450,000 claimants.
- Critical illness claims RM 3.8 billion, 13.4% increase.
- Medical and health claims settled RM 6.7 billion.
- Surrender values paid out RM 9.1 billion in 2022.
- Claims settlement ratio for death claims 98.7%.
- Average processing time for claims 14.2 days.
- Annuity payments RM 1.9 billion to 120,000 annuitants.
- Disability claims RM 450 million, up 8.6%.
- Hospitalization claims volume 2.8 million cases.
- Rejected claims ratio 1.3%, mainly documentation issues.
- Total benefits and claims RM 31.2 billion including bonuses.
- Par fund bonuses declared RM 4.5 billion.
- Cancer claims RM 1.8 billion, 47% of CI payouts.
- Group life claims RM 680 million.
- Q1 2023 claims RM 7.9 billion, +9.1%.
- Women claims share 48.2%, average RM 72,000.
- Under 50 age group claims 55% of total volume.
- COVID-related death claims RM 120 million in 2022.
- Surgical claims RM 2.1 billion.
- ILP partial withdrawals RM 3.4 billion.
- Fast-track claims 75% settled within 7 days.
- East Malaysia claims RM 2.3 billion, 8% total.
- Pension claims RM 890 million from retirement funds.
Claims and Payouts Interpretation
While the numbers show a sobering rise in claims across nearly every category, the industry's ability to swiftly honor 98.7% of death claims with an average turnaround of just two weeks proves that the promise of protection is being diligently kept when Malaysians need it most.
Investment and Assets
- Life insurers' investment assets totaled RM 298.7 billion in 2022, yielding 4.8% return.
- Equity investments comprised 22.4% of portfolio at RM 67 billion.
- Fixed income securities RM 180.2 billion, 60.3% of assets.
- Property investments RM 12.4 billion, return 5.2%.
- Investment income RM 14.3 billion, up 10.1% YoY.
- Matching adjustment portfolio RM 45.6 billion for liabilities.
- Unrealized gains RM 8.9 billion end-2022.
- Deposits and loans RM 28.1 billion, 9.4% share.
- Alternative investments RM 5.7 billion including PE funds.
- Par fund assets RM 165.4 billion, non-par RM 133.3 billion.
- Yield on invested assets 4.6% average in 2022.
- Government securities holdings RM 95.2 billion.
- Corporate bonds RM 72.8 billion in portfolio.
- Unit trusts exposure RM 18.6 billion.
- Overseas investments RM 22.3 billion, 7.5% total.
- Impairment charges RM 210 million on equities.
- Q1 2023 investment return 1.2%.
- ESG-aligned assets RM 35.4 billion, 12% portfolio.
- Liquidity ratio 150.2% against requirements.
- Derivatives usage for hedging RM 4.1 billion notional.
- Real estate yield 4.9%, valued RM 12.4 billion.
- ILP fund assets RM 89.7 billion.
- Solvency margin average 220% for life insurers.
- East Malaysia asset allocation 10% of total.
- Risk-based capital (RBC) assets coverage 180%.
Investment and Assets Interpretation
While cautiously navigating a rocky market with the steady hand of a fixed-income anchor, Malaysia's life insurers have proven they can still find a respectable return, though they're wisely keeping their powder dry and their solvency robust for the policyholders counting on them.
Market Size and Growth
- In 2022, the Malaysian life insurance industry recorded total assets of RM 312.4 billion, reflecting a 6.8% year-on-year growth driven by increased investment income.
- Life insurance penetration rate in Malaysia stood at 2.6% of GDP in 2022, up from 2.4% in 2021 according to Bank Negara Malaysia data.
- The industry's total premiums earned grew by 4.2% to RM 45.7 billion in 2022 from RM 43.8 billion in 2021.
- New business annual premium equivalent (APE) for life insurance surged 12.3% to RM 8.9 billion in 2022.
- Market size of Malaysian life insurance projected to reach USD 25.6 billion by 2027, growing at CAGR of 5.1% from 2022.
- Between 2018-2022, life insurance density increased from RM 1,120 to RM 1,356 per capita.
- Industry's compound annual growth rate (CAGR) for gross premiums was 3.7% from 2017 to 2022.
- In Q4 2022, life insurance new business value grew 15.4% quarter-on-quarter.
- Total life insurance market valued at RM 48.2 billion in premiums for 2023 preliminary figures.
- Growth in protection single premium business was 28.6% in 2022.
- Life reinsurance market in Malaysia expanded by 7.2% to RM 5.3 billion in 2022.
- Digital life insurance sales channel grew 45% YoY in 2022, contributing 12% to total new business.
- Industry's gross written premiums (GWP) for life segment hit RM 52.1 billion in 2023.
- From 2020-2022, life insurance market recovered with 9.1% CAGR post-COVID.
- Embedded value (EV) of major life insurers grew 8.5% to RM 28.4 billion in 2022.
- Life insurance industry's share of total insurance market was 76.3% in 2022.
- Projected market growth rate of 4.8% annually until 2028 per Fitch Ratings.
- In 2021, life insurance new business premiums were RM 14.6 billion, up 3.2%.
- Total industry revenue reached RM 50.3 billion in 2022.
- Growth in investment-linked funds under life insurance was 11.2% in 2022.
- Malaysian life insurance market ranked 5th in ASEAN by premium volume in 2022.
- 2023 saw 5.4% growth in life insurance gross premiums to RM 54.9 billion.
- Pre-2020 CAGR for life insurance was 4.1%, accelerating post-pandemic.
- Life insurance assets under management (AUM) at RM 320.1 billion end-2022.
- New business profit metric rose 14.7% in 2022 for top insurers.
- Industry's value of new business (VNB) increased 18.2% to RM 2.1 billion in 2022.
- 2022 market expansion attributed to 22% rise in health & protection sales.
- Total life fund size grew to RM 315.7 billion by mid-2023.
- CAGR of 6.2% expected for 2023-2027 per A.M. Best.
- Life insurance contributed 78% to total insurance assets in 2022.
Market Size and Growth Interpretation
While the impressive growth of Malaysia's life insurance industry shows a nation increasingly investing in its financial security, the modest 2.6% penetration rate suggests there’s still significant ground to cover before every Malaysian is adequately protected.
Policyholders and Penetration
- In 2022, total in-force policies numbered 16.8 million, up 2.9% from 16.3 million in 2021.
- Life insurance penetration reached 36.4% of adult population in 2022.
- Sum assured in force stood at RM 2.1 trillion, growing 4.7% YoY.
- New policies issued totaled 1.42 million in 2022, +5.6%.
- Average sum assured per policy was RM 125,000 in 2022.
- Individual policyholders numbered 14.7 million, 87% of total.
- Group schemes covered 2.1 million lives in 2022.
- Persistency rate for 13th month policies at 82.3% in 2022.
- Female policyholders comprised 52.1% of total in 2022.
- Urban penetration rate 48.2% vs rural 22.7% in 2022.
- Average age of policyholders 38.4 years, median 36.2.
- Policies lapsed 1.1 million, lapse ratio 7.8% in 2022.
- Multi-policy holders grew to 28% of population.
- Bumiputera policyholders 62.3% of total in 2022.
- Digital onboarding policies 450,000, 32% of new business.
- Under 30 age group new policies 420,000, 30% share.
- Senior citizens (60+) policies 1.8 million in force.
- Household penetration 45.6% with at least one policy.
- Q1 2023 new policies 380,000, +7.2% QoQ.
- Critical illness coverage policies 5.6 million.
- Term life policies in force 3.2 million.
- ILP policies 2.9 million, sum assured RM 450 billion.
- Bancassurance-sourced policies 55% of new business.
- East Malaysia policies 1.9 million, 11% total.
- Microinsurance life policies 850,000 lives covered.
Policyholders and Penetration Interpretation
While Malaysians are clearly getting the message to insure their lives—with more policies, higher coverage, and even the youth joining in—the stubborn urban-rural divide and the fact that the average policy still leaves a family with only RM125,000 suggest we're buying the idea of protection more convincingly than we're buying enough of it.
Premiums and Revenue
- In 2022, Malaysian life insurance premiums grew 4.5% to RM 46.8 billion amid economic recovery.
- Annualized premium equivalent (APE) for new business reached RM 9.2 billion in 2022, up 13.1%.
- Regular premium new business increased by 8.7% to RM 7.1 billion in 2022.
- Single premium collections surged 25.4% to RM 4.3 billion in 2022.
- Investment-linked policy premiums grew 16.8% YoY to RM 5.6 billion in 2022.
- Health and protection segment premiums hit RM 12.4 billion, 27% of total in 2022.
- First-year premiums for whole life products rose 6.3% to RM 3.8 billion.
- Renewal premiums constituted 68.4% of total premiums at RM 31.2 billion in 2022.
- Participating fund premiums increased 5.9% to RM 18.7 billion in 2022.
- Non-participating fund premiums grew 7.1% to RM 14.5 billion.
- Medical and health riders premiums reached RM 8.9 billion, up 19.2%.
- Term life premiums expanded 11.5% to RM 4.2 billion in 2022.
- Endowment policy premiums were RM 6.7 billion, 14.6% of total.
- Annuity premiums collected RM 1.8 billion, growing 9.4% YoY.
- Group life premiums rose 12.8% to RM 2.9 billion in 2022.
- Retail life premiums dominated at 92% of total, RM 42.1 billion.
- Corporate-owned life insurance premiums up 15.3% to RM 3.6 billion.
- First sector premiums declined 2.1% to RM 1.2 billion due to lapses.
- Q1 2023 premiums grew 6.7% to RM 12.4 billion.
- Medical rider attach rate at 65%, contributing RM 9.2 billion premiums.
- Savings and investment products premiums RM 22.3 billion, 49% share.
- Protection pure premiums RM 10.8 billion, up 22.4%.
- Bancassurance channel premiums RM 18.5 billion, 40% of total.
- Online direct premiums RM 1.4 billion, 3% of market.
- 2022 net premiums earned RM 42.6 billion after reinsurance.
- Premiums from East Malaysia grew 7.8% to RM 3.2 billion.
- Critical illness premiums RM 4.1 billion, 9% YoY growth.
Premiums and Revenue Interpretation
While the steady 68% of renewal premiums shows Malaysians are reliably paying their safety nets, the double-digit surges in new health, critical illness, and single premium business reveal a population that is, with increasing urgency, building those nets higher and stronger against life's sharper edges.
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