KUALA LUMPUR - Insurers and takaful operators must step up their efforts to expand capacity and bridge critical protection gaps.
Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour said there was a need for the insurance industry to adapt and innovate, focusing on leveraging technology, enhancing inclusivity and preparing to meet growing demands across the region.
"To reduce protection gaps and strengthen financial safety nets, insurers and takaful operators must innovate, especially by using digital solutions.
"This includes augmenting protection with prevention and creating a more inclusive ecosystem,” he said during his keynote address at the launch of the rebranded Asian Institute of Insurance (AII).
Rasheed highlighted that Malaysia's insurance and takaful sectors are currently at a critical point, where they could contribute significantly to the country’s economic 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.
With the region's population of over 650 million, particularly in Asean, the Governor pointed out the vast opportunities for insurers and takaful operators to diversify and meet a wide range of protection needs.
"The insurance and takaful sectors have unprecedented opportunities to expand their reach and diversify their offerings to meet varying protection needs across the region," he said.
Rasheed also emphasised the importance of tapping into larger pools of expertise and capital to develop innovative products that can meet growing demands.
He said that the industry could leverage broader expertise and larger capital sources, bolstering its capability to develop innovative products and meet larger protection needs
BNM, according to Rasheed, had taken proactive steps to create a more competitive, efficient and inclusive protection landscape.
"We are modernising the regulatory framework, making it more principles-based and opening avenues for innovation.
"This includes initiatives like refreshing the regulatory sandbox and introducing 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.