The Life Insurance Association of Malaysia (LIAM) is committed to increasing the life insurance penetration rate in the country and is learning from experience.
Vice-president Rangam Bir said to further boost the penetration rate especially among the B40 group, it had launched several initiatives in partnership with Bank Negara Malaysia and other stakeholders and it was learning from those initiatives.
“We are learning from the experience, such as on what further needs to be done, what are the specific needs of the customer segment, what do they like about the products, how we can make the price more affordable and how the distribution can really reach the customers who will benefit from the products,” he told Bernama in an interview.
Rangam noted that it might need to look at different innovative methods to drive the penetration rate for that segment of the population.
“We might even have to see whether there are potential changes that need to be made to some of the requirements and policies.
“This is an ongoing discussion. We are also using experts who have had success in other markets. We are talking together with them and have taken some initial steps. We want to drive it further. We know we can’t be satisfied,” he added.
On Tuesday, Finance Minister Lim Guan Eng said the government was likely to revise the national target of a 75 per cent life insurance penetration rate in 2020, as the present rate of 55 per cent was far below the target. He also attributed the low penetration rate to the affordability of policies.
However, Rangam said affordability was linked to the benefits that the customers would get, which represented a very critical element.
“Today you can buy premium life insurance policies in the market for as low as RM5 a month. So I think affordable policies are available.
“It is for the customers to be aware of where they can buy such policies and for them to be aware how the products will benefit them. They also need to believe that the products are delivering the right value for them,” he said.