KUALA LUMPUR (April 18): The life insurance industry recorded a double-digit growth of 11.6% in new business total premiums to RM13.4 billion last year, compared with RM12 billion in 2022.

The Life Insurance Association of Malaysia (LIAM) said the growth was driven by the strong performance of group policies (up 14.5% to RM5.1 billion) and investment-linked policies (growing 13.6% to RM6.2 billion).

The overall new business sum assured saw a 9.4% growth to RM544.4 billion in 2023, from RM497.7 billion in the previous year, LIAM said in a statement on Thursday.

LIAM said the new business sum assured of investment-linked policies registered a double-digit growth of 13.4% to RM155.8 billion, followed by that of group policies by 10.3% to RM368.8 billion.

"Meanwhile, the number of new investment-linked policies rose by 6.8% to 709,378, and new group policies increased by 5.8% to 21,975 last year.

"However, new traditional policies recorded a decline of 56.9%, from 1.2 million in 2022 to 496,115 in 2023, resulting in the overall number of policies falling 33.2% to 1.2 million in 2023, compared with 1.8 million in 2022," it added.

LIAM said the total premium in force grew by 5% to RM46.3 billion in 2023, compared with RM44.1 billion in 2022.

The association also highlighted that the number of policies in force of group policies grew by 4.5% to 28,685, followed by investment-linked policies which expanded 4% to 6.7 million, in 2023.

However, traditional policies declined by 9.7%, which contributed to a drop in the total number of policies in force to 3.1% in 2023, amounting to 13 million against 13.4 million in 2022, due to the expiration of the policies issued under the Perlindungan Tenang Voucher Scheme in 2022.

On claims, LIAM said total payout surged by 14.9% to RM15.4 billion last year, compared with RM13.4 billion in 2022, primarily driven by a 41.4% hike in disability payment and a 26.2% rise in medical claims.

The surge in claims payout was also due to a high medical inflation rate in Malaysia, and the higher medical claims are expected to add pressure on premium increases going forward, it added.

On prospects, LIAM stressed that the industry is poised to maintain its growth momentum and resilience amid evolving market dynamics.

"Various efforts outlined under the Financial Sector Blueprint 2022-2026 are being carried out to strengthen and push the development to a higher level, to deliver better products and services to consumers," it said.