COVID-19 to have minimal impact on Malaysian insurance market

Insiders see some bright spots, such as increased demand for health cover

COVID-19 to have minimal impact on Malaysian insurance market

Insurance News

By Gabriel Olano

The coronavirus outbreak is unlikely to have a negative impact on the Malaysian insurance industry. In fact, industry insiders believe that it might even spur the uptake of health insurance.

With Malaysia having 55 confirmed infections as of March 06, analysts foresee that the insurance sector’s earnings will remain stable and may even encounter opportunities for growth, The Malaysian Reserve reported.

“After the SARS crisis in 2003, the health and insurance market in Malaysia grew by 35%. It was the trigger point that created sensitivity among people thinking they need to invest to protect their health,” Allianz Life Insurance CEO Joseph Gross was quoted as saying in the report.

While Gross believes that over 30% growth is unrealistic this time around, he said that he does not expect the outbreak to have an immediate negative impact on the industry.

Khoo Zhen Ye, analyst at MIDF Amanah Investment Bank, agreed that the coronavirus outbreak is likely to cause increased demand for health and medical insurance, especially since insurers are offering extra benefits for policyholders that are diagnosed with COVID-19.

“While this may encourage some non-policyholders to purchase certain insurance products, we do not view this as a significant catalyst to the insurers’ earnings,” Khoo told The Malaysian Reserve.

While health insurance may see increased demand due to the outbreak, one line of business that may see dampened business is travel insurance, due to various countries’ imposition of travel bans and the public’s general reluctance to engage in non-essential travel.

According to Khoo, the insurance industry as a whole has good prospects ahead of it, as the sustained growth of the life insurance and family takaful segments are expected to carry insurers through the outbreak.

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