INSURERS, TAKAFUL OPERATORS MUST EXPAND CAPACITY, BRIDGE PROTECTION GAPS - BNM GOVERNOR

KUALA LUMPUR, Sept 18 (Bernama) -- Insurers and takaful operators must expand their capacity and readiness to reduce critical protection gaps and strengthen financial safety nets, said Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour.

This includes adapting and innovating in several areas, namely leveraging technology and digital solutions to close coverage gaps, augmenting protection with prevention, creating a more inclusive insurance ecosystem, and being prepared to meet the region’s needs, he said.

The governor noted that Malaysia’s insurance and takaful sectors are at a pivotal juncture where protection mechanisms can enhance economic stability and resilience.

“Compared to last year, new business premiums in the life and general insurance industries recorded double-digit growth in the first half of 2024, exceeding RM20 billion.

“Similarly, the family and general takaful sectors also showed strong growth, with total contributions surpassing RM7 billion," he said during his keynote address at the launch of the Asian Institute of Insurance (Aii) today.

Formerly known as the Malaysian Insurance Institute (MII), the Aii embarked on a strategic rebranding, reflecting its ambition to lead insurance education and professional development across Asia.

Abdul Rasheed highlighted that the insurance and takaful sectors are witnessing an increasingly interconnected insurance market contributed by deeper regional integration.

“With over 650 million people in ASEAN alone, the insurance and takaful sectors have unprecedented opportunities to expand their reach and diversify their offerings to meet the varying protection needs across the region.

“Moreover, the industry can tap into a broader pool of expertise while leveraging on larger capital sources, bolstering its capability to develop innovative products and meet larger protection needs,” he added.

The governor also noted that BNM is actively laying the foundation for a competitive, efficient, and inclusive protection landscape for the sector.

He said that this involves driving initiatives to modernise the existing regulatory framework, making it more principles-based while opening avenues for insurance and takaful operators to innovate and test new solutions.

“Guided by parity, proportionality, and neutrality principles, we have refreshed our regulatory sandbox and introduced the Licensing and Regulatory Framework for Digital Insurers and Takaful Operators.

“These steps are designed to help the industry deliver strong and meaningful value propositions that support the goals of inclusion, competition, and efficiency,” he added.

-- BERNAMA