Industry Players Express Confidence In Malaysia's General Insurance Market

By Niam Seet Wei KUALA LUMPUR, Dec 28 (Bernama) -- Despite an anticipated slower growth for the general insurance industry in 2016, industry players have, however, expressed confidence in the Malaysian market. "You may say that the actual growth of the general insurance industry in Malaysia was below expectations this year. But, it was still positive and strong," said QBE Insurance (Malaysia) Bhd's Chief Executive Officer (CEO), Leo Zanolini. He cited QBE, the Australian-based diversified insurer, as eyeing to close 2015 with a nearly 20 per cent growth in terms of gross written premiums, although the General Insurance Association of Malaysia (PIAM) expects growth as such at around four per cent. PIAM in August revised its targeted growth for gross written premiums to between three to four per cent for 2015 from 5.5 per cent to 6.5 per cent previously. This was due to the weakening of the Malaysian ringgit against the US dollar, a cautious economic outlook, as well as moderation in consumer spending following the Goods and Services Tax (GST) implementation. PIAM's CEO Mark Lim Kian Wei said despite a moderate slowdown, the industry had still maintained continuous growth. His counterpart at the Malaysian Insurance Institute, Syed Moheeb expects the industry to pick up in 2016, especially in the first half. Meanwhile, the general insurance industry reported US$2.10 billion (RM9.07 billion) in gross written premiums for the first six months of 2015, which was a slower increase of 2.3 per cent compared to the 6.4 per cent growth in the same period of 2014. PIAM attributed the lower rate to a challenging business and operating environment. It said the cautious outlook and moderation in consumer spending as a result of the heightened economic uncertainties, coupled with the rising cost of living,had mainly affected the motor class which is the dominant line of the insurance business. Motor insurance registered a much slower growth of 2.1 per cent during the period compared to 8.3 per cent in the corresponding period last year, while that for fire insurance, which is the second largest class, saw a higher growth rate of 5.0 per cent compared to 4.2 per cent in 2014. However, for QBE's Zanolini, Malaysia is a competitive market and in expressing the company's confidence in Malaysia, he said it had established 14 branches to grow its presence in the country. "Malaysia is a very competitive market, and we are confident that QBE will continue to grow at a much higher pace than the market average," he told Bernama. QBE, which entered the Malaysian market in 1905, has spent the past two and a half years establishing five branches in Malaysia, whereas in the earlier 106 years, there were only nine. "We are really serious in investing in the country. We believe in its economy and insurance market," said Zanolini. With a number of renowned international and domestic companies offering general insurance products in Malaysia, he said Malaysia had been able to attract investments over the years. "In many ways, Malaysian customers are spoilt for choice," he added. Meanwhile, on the de-tariffication in the general insurance industry by Bank Negara Malaysia (Malaysia's Central Bank) that is expected to take place in the near future, Zanolini said the company welcomed the move as it would make the market a professional one. "We welcome this professionalism as we believe the more professional the market is, the more companies are able to differentiate themselves as well as have a solid balance sheet. "They can also perform well against the backdrop of more educated customers," he said, adding, QBE was looking forward to expanding business profitably from the additional progress. On the establishment of the ASEAN Economic Community (AEC) and the recently concluded Trans-Pacific Partnership Agreement (TPPA), Zanolini viewed these as positive developments for the industry. "Both Malaysia and Australia are members of the TPPA. We hope that trade flow between these two nations can be increased. The formation of the AEC will present opportunities for Malaysian companies to expand across the region. --BERNAMA