Evidently, the SOCSO’s Lindung 24 social insurance scheme is expected to significantly broaden accident protection for workers without materially disrupting the private insurance and takaful industry.
In a sector report, CIMB Securities said Lindung 24, which was implemented by the Social Security Organisation (Perkeso) on June 1, extends protection beyond work-related accidents to provide eligible workers with 24-hour coverage for non-employment accidents, alongside income replacement, rehabilitation and dependants’ benefits.
The research house maintained its Neutral stance on Malaysia’s insurance sector, saying the scheme is primarily aimed at underinsured workers and complements rather than replaces private medical, life and disability coverage.
CIMB said the protection gap remains substantial. Citing Perkeso, it noted that only about 48% of Malaysians have insurance protection beyond motor insurance, while coverage among the bottom 40% income group is estimated at just 4%.
About 38,000 claims were rejected between 2015 and 2025 because employees did not meet traditional eligibility requirements for employment-related accidents. With Lindung 24, Perkeso estimates that roughly 250,000 employees a year could benefit from protection for accidents previously outside the conventional workplace definition.
Take-up has also remained high. As at Sept 9, 8.5 million workers, or 87.6% of the estimated workforce, remained enrolled after the opt-out period for local workers ended on Aug 31. Around 1.2 million workers opted out, with 52% of them earning below RM3,500 per month.
Lindung 24 covers non-work accidents occurring at home, during personal travel, recreational activities, religious activities and other off-duty situations, complementing Perkeso’s existing Employment Injury Scheme, which applies to work-related accidents.
Contributions To Rise In Stages
The contribution rate is currently 0.75% of monthly salary until May 2028. It will increase to 1.0% from June 2028 and 1.25% from June 2031, with both contributions and benefits capped at a monthly wage of RM6,000.
Benefits include temporary and permanent disablement payments, medical treatment, rehabilitation, dependants’ benefits, funeral assistance and education support. CIMB noted that fully disabled contributors could receive up to 90% of covered income for life, subject to Perkeso’s assessment and applicable rules.
For insurers, CIMB sees the greatest potential overlap in standalone and employer-sponsored personal accident policies. Employers could eventually rationalise duplicated accident benefits and redirect spending towards medical coverage and other employee benefits.
However, private insurance remains relevant for higher-income workers because Lindung 24 benefits are capped at the RM6,000 salary ceiling, while private products provide broader medical, life, critical illness and income protection.
CIMB said the longer-term effect could be positive by raising awareness of underinsurance and encouraging insurers to focus on higher-value protection and health products. It maintained its Neutral sector view, while remaining more constructive on LPI Capital than Syarikat Takaful Malaysia Keluarga.
