Growth in takaful products
AM Best’s report also noted that the general takaful (cooperative Islamic insurance) industry is expanding strongly, with a five-year CAGR of 10% (2015-2019). This growth is mainly due to the relatively low base and penetration level of growth in the industry, as well as the large Muslim population in the country, and the growing popularity of takaful products due to their surplus-sharing concept. Although the sector is relatively small and highly concentrated, AM Best believes the sector will show stronger growth than traditional non-life insurers.
Insurance product distribution channels
Research and Markets notes that increasing digital distribution channels benefit insurers adopting new technologies and facilitating policy access: Investments in insurtech, messaging platforms, and online sales channels are boosting the country’s insurance sector.
Through different distribution channels, insurance companies in Malaysia offer a wide range of products of varying complexity, designed for different groups of businesses, individuals and other organisations. This will provide the means to meet the emerging needs of each end user and drive net sales.
The old days of ‘blanket policies’ and one-size-fits-all are coming to an end as customers expect highly relevant products and efficient processes directly from their travel providers (especially during the insurance claims process)
Arijit Chakraborty, Managing Director, Asia Pacific, Cover Genius, spoke to ITIJ about how digitalization is changing the way consumers buy products and make claims: “Customers around the world interact online in some way in almost every aspect of their lives, and this is driving the insurance industry Digitization of products and services within the travel industry. The ‘blanket policy’ and one-size-fits-all approach of the past is coming to an end as customers expect highly relevant products and efficient processes directly from their travel providers, especially during the insurance claims process.”
In a recent survey of the Southeast Asian market, travelers singled out their dissatisfaction with traditional and online insurers’ slow claims processes, which can take up to 10 days to process, and the average post-claim NPS (Net Promoter Score ) is -15. “In fact, when comparing recent travel insurance purchases with future travel insurance purchase preferences, nearly half of travelers in Southeast Asia (47%) would prefer to purchase travel directly from a travel provider or agency for their next trip,” said Chakraborty. Insurance.”
“To improve the claims experience and increase customer satisfaction with travel brands, we have seen many regional players adopt application programming interfaces (APIs) that provide instant claims payments and processes. For example, Agoda, a leading digital travel platform, Operating in over 30 countries including Malaysia, it recently integrated XCover, Cover Genius’ global distribution platform, to provide travelers with comprehensive travel protection and instant claims payment,” added Chakraborty.
Kamaludin Ahmad, CEO of Etiqa Insurance & Takaful Group, introduced to ITIJ the Malaysian personal accident insurance market where travel insurance belongs. Market share figures have not yet been released because industry figures include market share under personal accident, but Ahmed said he believed his company was “probably number one” in selling travel insurance online.
The company is focused on multiple distribution channels, and as the Internet becomes more important: “Our key channels,” he told ITIJ, “will be online, agency and bank, in addition to our underwriting support for corporate partners. Insurance. Over the past few years, more and more Malaysians are buying travel insurance online. Before the outbreak, we were selling 25,000 policies online every month.”
The role that evolving technology has played in the popularity of travel insurance is evident in many parts of the world, and it is enhancing the ability of insurers to respond to consumer needs in ways the industry was not able to before. “Technology has improved the service we provide to our customers in many areas. For example, we can access flight data and cross-check flight times so that payments are automatically credited in the event of a delay before a travel policyholder files a claim,” Ahmed noted. their account.”
Recovery in outbound travel bodes well for future travel insurance sales
Before the outbreak of the new crown epidemic, Malaysia’s outbound tourism market had grown significantly, with more than 13 million outbound tourists, and tourists’ spending was also increasing. The average length of vacation was 9.9 nights, and the average cost of travel (to Europe) was $1,500 per person. According to research by ETC Corporate, the European destinations Malaysians are most likely to visit are, in that order, Switzerland, the United Kingdom, France, Italy and Austria – none of which have cheap healthcare and all require visitors to provide a minimum amount of health insurance for Schengen outside the area.
Most important to insurers, though, is information on how these travelers research and book vacations online. Partnering with these outlets can provide insurers with new opportunities to engage with potential customers during the buying process. The five most used sources of online information are:
- 64% social media
- 53% Travel Review Sites
- 39% Search Engines
- 35% Travel booking and comparison sites
- 26% Travel agency/tour operator websites.
Statista researcher Raudhah Hirschmann commented in the report that despite the COVID-19 pandemic, economic challenges are not an obstacle for Malaysians to travel: “Malaysians may complain about rising prices for everyday items; however, they are unwilling to sacrifice their holidays.
North Asian countries such as Taiwan and South Korea are increasingly popular with Malaysian tourists
While the economic situation hasn’t stopped Malaysians from traveling, it has affected the type of travel, with regional destinations favored over long-distance trips. Neighboring Indonesia has long been a popular tourist destination for Malaysians, with Malaysian tourists spending an average of US$720 per trip in 2016, much higher than Singaporean tourists. “
She continued: “In recent years, North Asian countries such as Taiwan and South Korea have become increasingly popular with Malaysian tourists. With the great success of Korean culture, especially K-pop music in Malaysia, more and more Malaysians are using Korea as a The holiday destination of choice. South Korea’s recognition of the booming halal tourism market has also made it easier for Malaysians, the vast majority of whom are Muslim, to travel there.”
As Asia reopens to travel, awareness of travel insurance and its benefits will continue to trend upwards, and there will be opportunities for affinity deals and distribution partnerships in more countries. With Malaysians keen to travel again, industry insiders are confident that there is plenty of room for growth in the future.
Ahmad told ITIJ: “There is no doubt that as more and more Malaysians are keen to travel, the overall addressable market and online market for travel insurance will become stronger both in terms of policy volume and policy value. Humans travel greater distances and for longer periods of time.”
Chakraborty of Cover Genius concluded: “Given the current market uncertainty, global customers, including those in Malaysia, want to feel safe when buying. They want to know they are protected from anything that might happen, and they want Their online experience is seamless. If brands don’t embrace the digitization of insurance processes like claims, they’ll be left behind.”