The insurance and reinsurance sector is a significant catalyst for many nations’ economies, including Malaysia’s. Get to know more about our insurance and reinsurance industry with these concise facts and statements below — captured in numbers.
- What is the minimum amount of capital legally required for a reinsurance company in Malaysia?
- RM 10 million 😨
Malaysia’s insurance companies and reinsurance institutions make up the reinsurance industry which plays a crucial role in maintaining the financial stability of insurers.
Its importance as a risk management tool to reduce financial volatility and increase effective capital usage fostered the need for clear guidelines and procedures to uphold professional standards.
Reinsurance companies are under the regulation of the Labuan Financial Services Authority (“LFSA”), a statutory body under the Labuan Financial Services and Securities Act 2010 (“LFSSA 2010”).
Fyi, Reinsurers in Malaysia are required to:
- Maintain a minimum capital of RM 10 million (or its equivalent in foreign currency) within Labuan;
- Be a member of the Labuan International Insurance Association;
- Have an operational office in Labuan;
- Appoint LFSA-licensed underwriting managers;
Next...
- How many reinsurance companies are there in Malaysia?
- 200 reinsurers 👀 (wow so many ah?)
The reinsurance industry might seem like a relatively unknown industry in Malaysia, but it is an established industry with 200 reinsurers.
One of the most significant reinsurers in Malaysia is Malaysian Reinsurance Berhad (Malaysian Re), a wholly-owned subsidiary of MNRB Holdings Berhad. Malaysian Re is the largest national reinsurer (by asset) in the Southeast Asia region, underwriting all classes of general reinsurance business as well as general and family retakaful businesses.
- How much reinsurance premium does the local insurance and reinsurance industry cede in a year?
- RM 1,183 million was ceded in the year 2020 😱
From 2015 to 2019, the Malaysian insurance and reinsurance market recorded a gross direct premium of RM 17.41 billion in 2019. With COVID-19 impacting the market in 2020, GDP dropped by 8.3%, and direct insurance and reinsurance premiums contract by 3.6% in the first half of the year.
Contrastingly, the 3rd quarter of 2020 GDP grew at a remarkable rate of 18.2% compared to the previous quarter, while the gross direct premium of the insurance sector narrowed to a negative growth of 1.2% from 3.6% during the period — demonstrating market resilience amidst economic volatility.
Among all local reinsurers, Malaysian Re dominates 65% (RM 775 million) of the reinsurance market share.
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(This article was contributed by MNRB Holdings Berhad)
Malaysian Reinsurance Berhad (Malaysian Re) is Malaysia's largest reinsurer, commanding more than 60% of reinsurance accepted premiums in the country. They are a major driver of economic growth, as seen in a 2022 Fitch Ratings stating that the institution has a strong capital buffer and sustained financial performance.
The institution underwrites all classes of general reinsurance business and general retakaful business, with an extensive business portfolio across Asia and the Middle East. Visit https://www.malaysian-re.com.my/our-solutions/reinsurance for more.
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