The resumption of economic activity and economic expansion bodes well for the general insurance business as more activity translates into greater demand for underwriting, LPI Capital Bhd’s non-independent non-executive chairman Tan Sri Dato’ Sri Dr Teh Hong Piow said in the 2021 annual report.
However, he said that it is too soon to presume that we are completely out of the woods. “We have seen in Malaysia how quickly and significantly conditions can change simply by comparing the operating conditions in the country in the first half to the second half of 2021,” he said.
“Even as we are on the pathway to recovery, we must remain vigilant as a sudden flare-up of the pandemic or an unexpected renewal of international trade tensions could plunge the economy back into the doldrums. Caution must remain our watchword,” Tan Sri Teh said
As for the developments in the general insurance sector, he said that it expects to see BNM resume its liberalisation plan, a development that it has been anticipating for quite some time now but was temporarily put on hold owing to the pandemic.
Meanwhile, the annual report said in the medium- and long terms, the general insurance industry will need to grapple with the impact of the full liberalisation of the Motor and Fire classes of business.
It said that the phased liberalisation period of the sectors has been extended until 30 June 2022 due to the disruptions introduced by the pandemic.
“The Group has stated in the past that we are fully prepared for liberalisation and are ready for the emergence of a more competitive insurance market. Indeed, liberalisation will also bring about new opportunities, particularly in the area of distribution, where agents and digital solutions can be brought together in collaboration to increase sales and tailor custom solutions for customers,” it said