KUCHING: Only 54 per cent of Malaysians were insured as of last year, prompting Bank Negara Malaysia (BNM) to set a vision of raising the coverage to 75 per cent by 2020.
However, the industry would require more assistance from the government if they wanted to achieve the target, National Association of Malaysian Life Insurance and Family Takaful Advisors (Namlifa) president James Bong said.
In the last 10 years, he said, the number of those insured grew by a little over one per cent each year.
With such a situation, he said industry players would have to go the extra mile in order to achieve the target of having 75 per cent of Malaysians insured.
“A lot of Malaysians are walking around in big risks as only 54 per cent of the country’s population is insured. In Taiwan, the percentage is about 260 per cent, meaning each person has at least two policies,” he said during a news conference at Imperial Hotel here yesterday.
Bong further pointed out that Taiwan with a population of 25 million registered about 300,000 insurance industry players while Malaysia had only 85,000 agents to cater for a population of 30 million. It did not help that only 80 per cent of the 85,000 insurance agents across the country were considered active, he noted.
To help the government achieve the target by 2020, he said Namlifa was appealing to the government to offer incentives while doing more to heighten awareness among the various communities.
As a means to boost the industry, he suggested that the government detach insurance premium contribution from Employees’ Provident Fund (EPF) contribution for tax relief.
At present, he said, taxpayers are entitled to a joint relief worth RM6,000 for premium and EPF contributions.
“We would like to meet with the lawmakers to highlight this issue. Instead of a RM6,000 relief in total, we suggest RM6,000 relief each for life insurance and EPF contribution.”
Furthermore, Bong said, the government should emulate Singapore to exempt medical insurance from the six per cent goods and services tax (GST).
Presently, only life insurance is GST-free in Malaysia whereas in Singapore, both life and medical insurance policies are not subject to GST, he said.
“We want the government to revisit the policy. I don’t have the figure right now, but some of our customers intend to give up their medical plans. Six per cent is quite a figure.
“They will lapse their (medical) policies. If they fall sick, they will seek medical attention at government hospitals and the government will have to foot the bill. Furthermore, hospital beds will be full.”
He asserted that life insurance “is more important to the poor than to the rich”.
Quoting an example, he said if the breadwinner of a poor family happened to pass away, the widow and children might struggle to make ends meet.
He added Namlifa was also hoping to see more poor families getting insurance policies.
According to Bong, 14 insurance companies are presently operating in Malaysia.
Meanwhile, he said Malaysia will host the Asia-Pacific Life Insurance Congress 2017 at the Genting Highlands.
He added that 6,000 foreign participants were expected at the global event, which Malaysia would be hosting for the third time.