Premium income reaches RM15.6bil

The Star, Saturday August 30, 2008: COMBINED premium income of the insurance industry increased 19.5% to RM15.6bil in the first half of 2008 from RM13bil a year earlier.

The life insurance sector recorded a lower volume of new business premiums, declining 12.8% to RM3.4bil following slower sales of new investment-linked and endowment policies.

However, investment-linked policies continued to account for a higher share or 36.4% of new business premiums.

In terms of distribution channels, bancassurance tie-ups captured 39.3% of new premiums, while the market share of agency business improved to 52.5% (Jan-June 2007: 43.6%).

Market penetration of life insurance, as measured in terms of the total number of policies in force to total population, rose to 40.1% as at end-June (end-June 2007: 39.2%), indicating huge potential to increase Malaysian life insurance market penetration.

In the general insurance sector, gross direct premiums grew 8.2% to RM5.6bil from a year earlier.

The motor segment rebounded on renewed demand for motor vehicles following the launch of new models, with gross direct motor premiums increasing 9.9% to RM2.4bil in the first half of 2008.

This was further supported by the non-motor segment, such as marine, aviation and transit, fire, medical expenses and personal accident as well as other insurance, which expanded 7% to RM3.2bil.

The solvency position of the insurance industry remained strong with an increase in unaudited aggregate solvency surplus to RM16.5bil as at end-June.

The life insurance sector registered lower excess of income over outgo totalling RM4.6bil.

The underwriting margin ratio for the general insurance sector was 0.1% (Jan-June 2007: 0.5%) on account of better claims experience, with the claims ratio reduced to 65.4% from 68.3% in Jan-June 2007.

Operating profits, however, declined 42.2%, following higher net provisions for diminution in value of investments totalling RM134.8mil due to greater volatility in the equity market.

In tandem with business growth, the combined assets of the insurance industry expanded 9.6% to RM127.6bil in the first half of the year.

Asset allocation remained concentrated on corporate equities and debt securities as well as Government securities, accounting for 67.0% of total assets.

Life insurance business continued to account for a major portion (83.8%) of the industry's total assets.


Source from: The Star, URL:
http://thestar.com.my/news/story.asp?file=/2008/8/30/ecoreport2009/22186359&sec=ecoreport2009