Friday, September 22, 2017

Higher profits for Malaysia’s insurance, takaful firms

Insurance and takaful operators in Malaysia are beginning to see a silver lining after a period of dreary results.

They are expecting an improvement in their earnings because of the free-pricing scheme implemented within the motor insurance sector starting last July.

The reason behind the expected recovery in earnings is technological initiatives.

Analysts said several digital measures, such as telematics in the general insurance sphere, are expected to cut operational costs and the claims ratio, as well as improve earnings moving forward.

The free-pricing mechanism under the second phase of the motor insurance detariffication is seen to promote innovation and competition in the sector.

This will encourage more partnerships with telecom companies and other tech players, according to analysts.

As a result, the motor insurance players, which make up the bulk of the general insurance market in Malaysia, will enjoy better margins.

 

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