Despite facing major economic headwinds over the last 18 months, both the life and general sectors continue to grow, albeit at a slower pace.
On the life side, the phased implementation of the LIFE Framework will dominate the agenda over the coming years. The Framework aims to promote innovation and a more competitive market supported by higher levels of professionalism and transparency for both the conventional and takaful segments.
Over on the general side, the sector has had to deal with modest growth in 2015 which will prompt a greater focus on prudent underwriting and managing costs. Nonetheless, market players remain well capitalised with the Capital Adequacy Ratio (CAR) well above the minimum supervisory level of 130%.
Amid a tough environment, general insurers will also herald the start of detariffication later this year, which will present both opportunities and challenges for different players.
Not to miss out, there is the takaful sector whose players operate in a similar regulatory environment as their conventional counterparts. The sector is seen as a key avenue to raise insurance penetration, and it has shown evidence that it is making significant inroads, though there is much more to do to spread the virtues of protection and financial planning.
By Ridwan Abbas