KUALA LUMPUR, Aug 2 (Bernama) -- AM Best has assigned a stable market segment outlook to Malaysia’s non-life insurance industry, based on the sector’s underwriting discipline and robust pricing, as well as increased use of digital solutions to enhance data and pricing capabilities, claims automation, product innovation and distribution.
In its Best’s Market Segment Report, ‘Market Segment Outlook: Malaysia Non-Life Insurance’, the United States-headquartered global credit rating agency, news publisher and data analytics provider specialising in the insurance industry expects the COVID-19 economic fallout to remain a key challenge for the Southeast Asian country’s non-life segment for at least the near term.
A slight contraction in non-life insurance premiums was offset partially by growth in health insurance, as the pandemic boosted demand and raised awareness for health and medical products. Looking ahead, AM Best expects the health line of business to remain an important driver of the non-life industry’s growth.
Economic recovery likely will be affected adversely by the need to impose periods of stricter COVID-19 containment measures, such as those seen in May, June and July this year, with the effectiveness of the country’s COVID-19 vaccination programme being instrumental in allowing the country to open up more freely over the months ahead.
According to the report, Malaysia’s non-life market has made good progress in upgrading its infrastructure to enable minimal disruption in a remote working environment, as well as in expanding digital platforms to manage operations.
AM Best notes that most insurance companies now have an established framework and developed risk management guidelines to govern a digital-based remote working environment during periods of movement control orders with business contingency plans set up.
According to a statement, AM Best notes capital market volatility remains a risk over the near term and likely to be dependent on ongoing global and regional developments, as well as management of the pandemic.
In response to these market conditions, AM Best expects the segment’s non-life insurers to continue closely monitoring their underlying risk exposure to various investment classes and adjust and refine their portfolio allocation as part of their risk management approach.
For more information, visit www.ambest.com.
-- BERNAMA
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