Stable Outlook For Malaysian Insurance, Takaful -- RAM Ratings

KUALA LUMPUR, March 31 (Bernama) -- RAM Ratings maintains its stable outlook for the Malaysian insurance and takaful sector in 2017 backed by the industry's strong capital levels and regulatory reforms. "We expect the takaful sector's growth trajectory to remain higher than its conventional counterparts, underpinned by growth in the family takaful (FT) segment," the rating agency said in a statement Friday. RAM said the FT penetration rate was substantially lower, at about 15 per cent of the population, relative to life insurance's 41 per cent. Amid expectations of a delicate economic recovery, it said the general insurance gross premium growth was anticipated to stay below two per cent this year. Meanwhile, subdued consumer sentiment and inflationary pressures would slow the pace of life insurance gross premiums growth to about five per cent this year, it added. RAM said tariff liberalisation initiatives for motor and fire products might result in some initial price undercutting. However, it would spur an improvement in product innovation and risk selection criteria of general insurers and takaful operators, it added. -- BERNAMA